NEW THREATS TO PROPOSITION 13

If there’s one thing California taxpayers have learned since 1978, when voters overwhelmingly passed Proposition 13, it’s that government officials and special interests do not like limitations on the power to raise taxes.

And if there’s one thing government officials and special interests have learned since 1978, it’s that the Howard Jarvis Taxpayers Association and its hundreds of thousands of Members are proud to defend Proposition 13, which wrote into the state constitution some of the most important and powerful taxpayer protections ever adopted anywhere.

But even after more than 40 years of success, the battle continues between taxpayers and their relentless opponents.

Advocates of ever-higher taxes tried to pass Proposition 15, the “split roll” amendment, in November 2020, but voters saw through this attempt to raise property taxes “only” on businesses, recognizing that attacks on Proposition 13’s protections for commercial property will inevitably lead to similar attacks on Prop. 13’s protections for homeowners. Proposition 15 was defeated.

While some advocates of “split roll” have told journalists that they hope to try again, there are two new proposals already introduced in the Legislature that directly attack Proposition 13 and would try to soak property owners with higher taxes.

A proposal for a “wealth tax” that proponents claim would affect only the super-rich turns out to be, on closer examination, a mechanism for the state government to tax the current market value of real estate every year. Assembly Constitutional Amendment 3 would allow the Legislature to define and tax “wealth,” which could include the appreciated value of real estate, investments or retirement accounts.

ACA 3 would give state lawmakers the power, by a simple majority vote in the Legislature instead of the currently required two-thirds, to create a new tax on the value of your home — not a property tax, but a new tax on “wealth” as defined, administered by the state Franchise Tax Board.

ACA 3 would need a two-thirds vote in each house of the Legislature to advance to the ballot, but once on the ballot, it would need only a simple majority vote to pass.

Another new attack on Proposition 13, still in its early stages, is Assembly Bill 362. This bill would require the California Department of Tax and Fee Administration to study the idea of throwing out the entire property tax system of California, including Proposition 13, and replacing it with a “land value tax.”

The purpose, proponents say, is to “incentivize” property development. By placing a high tax on the value of land, regardless of what kind of buildings or improvements are on it, the new system would create an “incentive” for property owners to build high-density housing projects that produce enough revenue to pay the tax.

Of course, if you own a single-family home and just want to keep it, you’d face a very high property tax bill that could force you to sell because your home doesn’t generate as much “value” as the new tax rules have ordered you to pay for owning that land.

Even though AB 362 would require only a “study” at this time, the Howard Jarvis Taxpayers Association is vigilant against all attempts to use higher taxes as a means to force people out of their own property.

If you would like to contact your state representatives to ask them to oppose ACA 3 and AB 362, you can look up their names and contact information at findyourrep.legislature.ca.gov, or in the government pages of your local phone directory. You can also sign up for e-mail alerts at our website, https://www.hjta.org/take-action/updates-by-e-mail.