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
THREATS TO PROP 13
In June of 1978, 65% of California voters passed Proposition 13 and lowered property taxes on all properties by almost 60%. Before Prop 13 passed, the statewide average property tax rate was 2.6%. Prop 13 set the initial tax rate at 1% and capped annual increases at 2%. It also set a higher threshold for passing tax increases at both the state and local levels. All property owners are protected by Proposition 13 whether they purchased their homes or business properties yesterday or in the 1970's. Just imagine tripling your yearly property tax and you will have your property tax bill without Prop 13.
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.
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.