Prop. 13 richly funds local governments while protecting taxpayers

Two-thirds of California voters consistently tell pollsters that they think Proposition 13 is a good thing, but even with more than 48 years of constant support, Proposition 13 remains unpopular among politicians and bureaucrats who want higher property taxes.

But the limits that Prop. 13 imposes on property taxes can hardly be considered draconian. California ranks 18th out of 50 states in per capita property tax collections, belying the notion that it has “starved” local governments. True, even though California is not a low property tax state when compared to its number-one ranking in income tax rate, state sales tax rate, and gas tax, it’s no wonder that our property tax appears moderate.

The secret about Prop. 13 hiding in plain sight is that it has been a boon to local governments. While providing security to homeowners, it simultaneously guarantees stable – and almost always increasing – revenue to local governments. Statewide, assessed value of property generally increases in the 4 to 5 percent range. And even in years when market values decrease, Proposition 13 acts as a shock absorber, stabilizing revenue because of the difference between taxable value and market value.

The 2% limit on annual increases in taxable value means that, for counties with historically big increases in market value, no overall reduction in tax assessments is required even when market values are dropping. Proposition 13 has been characterized as “recession insurance” for local governments.

Recent figures for California’s County Assessors bear this out. California county assessment rolls released for the 2026–27 fiscal year show an average growth of 4.08% in assessed real estate and property values statewide. While individual property increases remain heavily insulated by Proposition 13’s 2% annual inflation cap, overall county roll increases have been propelled by property transfers (reassessments upon sale), new construction, and recovering business equipment values.

The way Prop. 13 stabilizes local government revenue, even in the midst of disasters, is striking. Los Angeles County Assessor Jeffrey Prang recently announced that, despite wildfires and economic uncertainty, the county’s assessment roll just posted its 16th consecutive year of growth: The 2026 Assessment Roll increased by $96 billion, or 4.42 percent, over the previous year to reach a record $2.272 trillion in total net taxable value. According to a press release issued by Prang’s office, “The increase will generate more than $27 billion in property tax revenue to support vital public services, including public education, public safety, healthcare, libraries, parks, and other local government services throughout Los Angeles County.”