Two New Attacks on Proposition 13
Mark Fernwood
By Mark Fernwood, associate member and a member of the Contra Costa Republican Party.
Prior to Proposition 13, Democratic leaders would reply to home owners complaining about escalating property taxes, “If you can’t afford your house, you might have to sell it to someone that can.”
To envision how your property taxes could explode, take an example of a house bought some years ago, for $200,000, and now worth $1 million, the taxes likely would be about $3,000. If we returned to pre-Prop 13 with a yearly reassessment to current market and charged an average rate then of 2.65%, the tax bill would explode to $26,500. How could anyone anticipate that? How many could afford that? This would create a tsunami of properties desperately placed on the market. Property values would collapse. Most would be unable to sell and lose to foreclosure or tax seizure.
The primary protections of Prop 13 are:
Assessed tax rates of property value is limited to 1% of purchase price, plus 2% valuation increases per year.
Almost tax increases require a 2/3 majority vote.
These resulted in a stable, predictable, affordable property tax.
Assembly Constitutional Amendment 1, ACA 1, the “infrastructure exception to Prop 13” would create dozens of exceptions to Prop 13’s two thirds vote rule for tax increases. These exceptions include pothole repair, roads, bicycle paths, rapid transit, High Speed Rail, parks and trails, beaches and parking lots, electrical grids, wind turbines, solar panels, low-income housing, buildings, schools, power plants, sidewalks, pipes, poles, pipes, conveyances, transmission lines, transportation, communication systems, electricity, heat, power, and a multitude of projects lumped under “infrastructure”, a definition easily expanded. It includes Bond Indebtedness for these projects. These exceptions would be paid for by property owners and homeowners.
With proposed Assembly Constitutional Amendment 3, ACA 3, “current Market Value” would replace assessed value for determining property taxes and would gut Prop 13. ACA 3 would allow the Legislature to raise taxes with a simple majority vote instead of with a 2/3rds vote established by Prop 13. ACA 3 would allow the state legislature to redefine wealth to include unrealized capital gains in real estate. The difference between your purchase price and the current market value, your unrealized capital gains, would be taxed. Initially limited to billionaires, it could trickle down to lower tax brackets by a pro tax Legislature.
I strongly encourage all to copy and send this on to all California friends. This is a fight where different Democratic strategies have been tried. The last several times the “split roll” was used. Removing commercial properties from Prop 13. The greatest tool the left has is the public not understanding. Prop 13 has remained very popular with about 65% of the voters.