HISTORIC PROP 13
WHAT IS PROP 13?
In 1978, California voters approved the People’s Initiative to Limit Property Taxation, or Proposition 13. Proposition 13 was the outcome of a revolt of California property owners against the subjective, roller-coaster rides that they had to deal with each year when their property values were assessed.
BENEFITS OF PROP 13
FIXED TAX RATE
Tax Rate Initially Set at 1%
Annual property tax increases capped at 2%.
Local tax increases require a two-thirds vote of the people.
2/3 Vote of the Legistlature
California state taxes increases require two-thirds vote of the Legislature.
According to the California State Constitution, all properties, no matter the zoning, are taxed the same.
HISTORY OF PROP 13
Stability for Property Owners
Tax rates will be initially set at 1% of market value and any annual increase will be capped at 2% to the lessor amount of market value or an inflation factor except when there is a change of ownership or new construction. No more arbitrary subjective evaluations that a County Assessor might come up with each year. This helps seniors, new homeowners and everyone in between.
Stability for Local Government
Prop 13 has acted as what CalTax calls a “circuit breaker” to stop the volatility of market values from affecting the flow of property tax revenues to cities to fund vital local services.
The Perfect Storm
In 1977, volunteers collected 1.5 million signatures going door-to-door and standing in shopping centers with a campaign budget of $28,500 in June 1978.
In February 1978, Governor Jerry Grown released his draft 1978-79 general budget with a $3.4 billion surplus.
This created a perfect storm where the government had billions in reserves but was trying to increase property taxes.
On the same ballot, unions and legislatures run another measure called split roll.
THREATS TO PROP 13
2020 Ballot Initiative:
Proposition 15 "Split Roll"
Proposition 15 "Split Roll" would tax properties differently depending on their use with Prop 13 protections removed from commercial and industries properties. This would cause a $10-12 billion new tax on California business.
A split roll is BAD for California's economy. It would increase the cost to do business in a state already ranked as one of the worst in the nation. Lastly, split roll would make it easy for Sacramento to come after homeowners.