I was out on the road yesterday, and I saw a campaign sign for someone who wants to run for the State Assembly. The sign bore the following motto: “SAVE PROP. 13.”
I’m almost embarrassed to confess that I had no idea Prop. 13 was in peril (although I’d likely cheer on anybody who proposed putting this poster child for unintended adverse consequences in some).
Is there a proposal afoot to weaken it?
In less than two weeks California will celebrate the 38th anniversary of Proposition 13’s passage. Since then Californians have voted on a few hundred Propositions, some of them also numbered 13.
Has any Proposition achieved such long-lasting fame as #13? No one in Major League Baseball wears Jackie Robinson’s #42 anymore; should #13 be similarly “retired” as a Proposition number?
(For those of us NOT residing in California, explaining what Prop 13 is would be most helpful !)
https://en.m.wikipedia.org/wiki/California_Proposition_13_(1978)
I won’t pretend to be an expert and I don’t even live in California but it was a CA Constitutional Amendment limiting property taxes and it has caused a lot of unintended consequences and is blamed in part for large budget deficits.
Proposition 13 was a measure put in place by conservatives to prohibit the government of California from paying for anything, so they could run the state into the ground and in the process prove that liberals never pay for anything.
Well, there’s an understatement. Prop 13 did more damage to the California economy and quality of life than any three or four droughts combined with an earthquake or two.
The single worst effect was to destroy the property tax <-> local service quality connection and force the state tax structure into a giant general slush fund with almost no visible or real accountability. That is, instead of paying “high” property taxes (actually pretty moderate, overall - around 3.8%, IIRC) and seeing the benefit in area schools, libraries, fire and police service, etc., the money had to come from general state revenues, so over 20 years the tax model became “all money into one pot, all funding from that pot” - which completely breaks the sense of what taxes pay for and reinforces the idea that all taxes are onerous gummint burdens, while being almost wholly subject to political and pressure manipulation.
The “tax crusaders” got what they asked for… and the stork spent 30+ years happily gobbling them up.
It also helps you not lose your house because of outrageous property tax increases. The proposition will be safe until enough people do not own houses, and they want the few remaining house owners to pay for everything.
Like traffic on the freeways, It’s a state pastime to bitch and moan about Prop 13.
A perfectly fine rationale, except Prop 13 also included commercial property. No business were in danger of being forced out into the snow by the cruel tax man; they just reaped the windfall.
Prop 13 broke the connection between a high local tax base and high quality schools, which is theoretically a good thing. So all schools get funded by the general fund…which drops alarmingly when the state is short of funds. So rich school districts just pass local parcel taxes, which go to local schools, and we’re back where we started.
It helps people who already own a house to not pay their fair share of property taxes while requiring people who are now buying a house, who did not have the good fortune of being born earlier, to subsidize them; it taxes two different groups at a vastly different rate for no apparent reason. If the property tax is “outrageous” for the people who have been there, why is it less “outrageous” to require new folks to pay?
Because new folks know exactly what their taxes will be and can factor that into the buying decision.
Prop 13 is terribly written. But that’s what you get when the legislature doesn’t act about legitimate concerns the people have. I lived in CA in 1978 when prop13 passed, and the reason it passed 63-34 was that people were mad as hell and weren’t going to take it anymore. The legislature could have done something, but it didn’t.
Prop 13 also (perhaps coincidentally) led to an era of completely dysfunctional state government, leading to legislation-by-referendum. Most of which (I exaggerate, of course) gets thrown out in court.
Sorry, but I’d rather have ever so slightly more uncertainty, and in return, not have to pay my neighbor’s share.
You asked why it was “less outrageous”. That’s why.
It’s “less outrageous” to let people know whether they can afford to pay taxes or not before they buy a house. Previously, you never knew what the taxes would be from year to year, and when you might have to literally sell your house to pay the taxes.
You may not think so, but 63% of CA voters disagreed with you.
The obvious alternative would be sales and income taxes (perhaps set at a local level) but:
If their taxes are going up so enormously that they couldn’t factor it into their plans, it’s because their house has become so much more valuable in the interim. Having a hard time feeling bad for them. They got theirs, so screw everyone else?
The fact that 63% of CA voters, nearly 40 years ago, voted that their future neighbors would subsidize them isn’t particularly compelling or surprising.
OK, here’s what is actually did: Froze property taxes until you sold your property.
*The most significant portion of the act is the first paragraph, which limited the tax rate for real estate:
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.*…In addition to decreasing property taxes, the initiative also contained language requiring a two-thirds (2/3) majority in both legislative houses for future increases of any state tax rates or amounts of revenue collected, including income tax rates and sales tax rates. It also requires a two-thirds (2/3) vote majority in local elections for most local governments proposing to increase special taxes. Proposition 13 received an enormous amount of publicity, not only in California, but throughout the United States.[2]
This did have some unintended consequences, but you have many people being taxed out of their homes as the property values were exploding but they were on a fixed income.
So, let us say you have a house. You got in before prices went crazy, and paid $200,000. Now, 10 years later, that same home is worth 1,000,000. So, should you be taxed on the $200K or the $1MM? Should you be forced to sell your home just because property values went up?
So, you have a small business, and you own your property. It does OK, but then a bunch of development spring up around you and your property is not worth 5 time what is was when you bought it. Should your taxes go up five times? Should you have to sell and move because of this?
“Worth more” is meaningless unless you mean “sell for more”. Say a retired couple, living on Soc Sec , and their home is now worth 10 times what they bought it for. Thus, they’d have to sell it under your plan. :dubious:
Like I said, prop 13 was the worst option-- except for what legislature offered, which was NOTHING.
Eh. Maybe they learned something form Social Security. But remember, they only had 2 choices. Prop13 or nothing. Prop 13 was “less outrageous”.