THREATS LIE AHEAD FOR TAXPAYERS
State lawmakers made a last-minute deal to put a tax-hiking constitutional amendment on the November ballot for voter approval.
The measure is Proposition 19. It takes away two important taxpayer protections that are enshrined in the State Constitution, and it replaces them with a billion-dollar tax increase.
Proposition 19 would eliminate Proposition 58, the 1986 measure that allows parents to transfer a home and limited other property to their children without the property being reassessed to market value. This allows the transfer of property within families while keeping the property tax bill the same under Proposition 13.
If Proposition 19 passes, children taking ownership of the family home would receive a new property tax bill for 1 percent of the property’s current market value. The measure makes an exception only for homes that the children move into within one year and use as their principal residence.
Because it’s not always possible for family members to immediately relocate, Proposition 19 would force many people to sell their family’s property, even if it was a bad time to sell or if they hoped to move in at a later date. To keep the home, they would have to pay 1 percent of the new market value in property taxes every year.
Even though Proposition 58 was approved by 75.7% of voters, Proposition 19 would eliminate it.
Similarly, Proposition 19 takes away another taxpayer protection, Proposition 193, which prevents reassessment of property transferred between grandparents and grandchildren in the event that the children’s parents are deceased.
The nonpartisan Legislative Analyst’s Office has projected that Proposition 19 will eventually cost taxpayers more than a billion dollars in higher property taxes.
That’s too high a price to pay for another provision in Proposition 19, the expansion of opportunities for older homeowners to move to a replacement property and transfer the base-year tax assessment from their former home to their new one. Current law (Propositions 60 and 90) allows homeowners age 55 and older to transfer their “Prop. 13” tax assessment one time, to a home that’s of equal or lesser value, and only within the same county or to a county that accepts the transfers. Proposition 19 removes these restrictions and would allow three transfers instead of one.
A similar measure was on the November 2018 ballot as Proposition 5. Voters rejected Proposition 5 by a margin of 60 percent to 40 percent.
Now it’s back, this time with a huge tax increase on California families.
“Proposition 19 eliminates one of the best tools parents have to help their children,” said Assembly Member Ken Cooley, D-Rancho Cordova, “and it doesn’t cost parents anything, not one cent.” Cooley joined HJTA President Jon Coupal and Senator Patricia Bates, R-Laguna Niguel, in signing an argument against Proposition 19 that will appear in the statewide official Voter Information Guide. It will be mailed to the households of all registered voters in September.