The new Legislature is dominated by pro-tax politicians who have a two-thirds supermajority in Sacramento. Bills that undermine the taxpayer protections in Proposition 13 have been introduced and are being heard in committees. If approved, these bills could cost every property owner thousands of dollars annually.
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THE FOLLOWING BILLS PUT A BULL’S-EYE ON PROPOSITION 13 AND TAXPAYERS’ WALLETS:
Assembly Constitutional Amendment 4 (ACA 4), Cecilia Aguiar-Curry (D—Yolo County): This amendment lowers the vote threshold for the local imposition, extension or increase of a special tax to fund affordable housing infrastructure from the Proposition 13-mandated two-thirds vote to 55%. Under this bill, the definition of a special tax includes both sales and parcel tax increases, both of which are very regressive. California has the highest sales tax in the nation, and parcel taxes add hundreds of dollars of new taxes, every year for decades, to the one percent tax rate property owners already pay under Proposition 13. ACA 4 also lowers the threshold to approve bonds for affordable housing projects from two-thirds to 55%, much as has already been done for school facility construction projects. While all voters are able to vote on this debt, only property owners pay it. Lowering the threshold for school bonds has added hundreds of millions of dollars of new debt on property tax bills since 2000.
Assembly Constitutional Amendment 4 is currently awaiting a hearing in the Assembly Local Government Committee. While there has been little action on this bill in 2017, that can change at any moment. Just a few years ago, a similar constitutional amendment was moved directly to the Assembly Floor and voted on in 24 hours, without a policy hearing. We will monitor the situation carefully if and when this bill begins to move through the legislative process. ACA 4 would require a two-thirds vote of both houses by June 30, 2018, in order to make the November ballot.
Senate Constitutional Amendment 6 (SCA 6), Scott Wiener (D—San Francisco): SCA 6 allows for special taxes, including sales and parcel taxes, to be approved by local voters with just a 55% vote as opposed to the current two-thirds threshold mandated by Proposition 13. Both sales and parcel taxes are very regressive, as both apply to all taxpayers and property owners equally without regard to income. Especially since voters will have to pay these taxes well after the local government representatives that likely proposed the tax will be out of office, requiring a higher vote threshold in order to establish some sort of accountability should not be an unreasonable expectation.
In addition, in light of the recent approval of Senate Bill 1, a $5.2 billion permanent annual gas and car tax increase, we question if additional funds for transportation are still needed. Even before this new tax, California was near the lead in both gas and car taxes, and an additional $19 cents/gallon tax will likely have us leading the nation, especially after the tax is adjusted for inflation. Making it easier to impose sales taxes on Californians (we also lead the nation in sales taxes) will do nothing to ease the burden on the 20% of the state’s population that lives at or below the poverty line.
SCA 6 is waiting to be heard in the State Senate.
Senate Constitutional Amendment 3 (SCA 3), Bill Dodd (D—Napa County): SCA 3 lowers the two-thirds vote for local voters to approve library bonds from two-thirds to 55 percent. The two-thirds threshold for local General Obligation bond debt has been in place for 140 years. While all voters in a municipality vote on this debt, only property owners, a declining share of the electorate, pay them. This debt has served to push property tax bills as high as 1.2 or 1.3 percent, leaving us 19th in combined state and local property tax burden according to the non-partisan Tax Foundation. However valid funding libraries might be, it shouldn’t come solely at the expense of property owners. Currently, 35 percent of Californians cannot afford a median priced home. By making it easier to increase property taxes, SCA 3 will only make this problem worse. SCA 3 is currently in the Senate Appropriations Committee.
Senate Bill 231 (SB 231), Bob Hertzberg (D—Los Angeles): SB 231 takes away the ability that voters have under Proposition 218 and the California Constitution to vote on stormwater fee increases. Twenty-five years ago, HJTA won a landmark court decision in HJTA v. City of Salinas, where a distinction was made between sewer fee increases (which don’t require voter approval) and stormwater fee increases (which do). SB 231 attempts to change the Constitution in state statute by treating sewer and stormwater the same, which is unfair. Taxpayers can be responsible for the showers they take and the toilets they flush. They have no control over stormwater, which falls as rain on their property. SB 231 will lead not only to guaranteed litigation but also to potentially a billion dollars of new fees against taxpayers just in Los Angeles County alone. Further, it will not lead to a drop of new water as California continues to recover from the drought. A recent article from HJTA summarizes our position on this important bill.
SB 231 is currently in the State Assembly awaiting further hearings.
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