The California Ballot Measure That Inspired a Tax Revolt

City property taxes took a hike over the last few years and blindsided me with over a 100%+ increase. I fully understand the need for funding, but increased taxation coupled with property reassessment has made life for anyone who owns or thinks of buying a home a bit more difficult.

I know cultural organizations receive support, but most of them are educational and make an allowance for the elderly and/or poor with lower or even free admission. Not so professional sport's teams, which get abatements and financial assistance from all of us whether or not we care one wit about grown men playing kid's games.

Religious properties, often located in prime areas and always kept in pristine condition, remain tax free leaving the taxpayer, regardless faith of not, to take up the slack.

Police? Fire? Dog catcher? Public schools? Fine by me, but subsidizing any private enterprise for any reason beyond a return on the money is not what I want or should be expected to support.....and I don't think I'm alone.

California is the new Tax-achusetts, with 10% sales taxes, taxes on sugar in Coke, taxes on taxes and, soon, taxes on legal dope. Plenty of money has been taken by the state and local units in taxes, more than enough to pay for all the fluff programs and government pension funds. Property in CA turns over every 5 years on average, and each time there is a new owner the property tax is readjusted to the current valuation-via-sale-price. Cities like SF are awash in money as home sales routinely run $1-10 million and that equals approx. $16,000 per million per year. It is of zero consequence to state and local finances if a few folks have actually lived in their homes for 30-40 years and can avoid having to pay $75,000/year in property taxes based on the sales and pricing frenzy going on in the area.

Prop. 13 was presented as a safety net to ordinary people who had bought a modest home but then had to service a tax debt based on skyrocketing property values. My neighbor in Monterey at the time bought her tiny house for $30k and wound up paying taxes based on a valuation of close to 10 times that. She had to sell to pay the taxes.

The only ones who made out are corporations and trusts that hold land purchased long before Prop 13. The state has lost billions in tax revenue because of this. Meanwhile residential property changes hands much more often and is re-assessed every time. Just like our water use issues the common folk are doing the heavy lifting while our corporate 'citizens' reap the benefits.

Prop 13 is a case in point of a market inefficiency. What consumers are paying does not match its real value, either for those who benefit and those, such as young families with kids who need to have schools and parks and who pay enormously. That actual little increase does not match the real value and it is astonishing how little older householders pay now. My relatives in Palo Alto held on to a lovely house they bought cheap back in the 50s even when they could only use the top floor. They wanted to move but could not afford to because of the tax differential and the enormous cost of senior housing, which they eventually did (sold the house in less than a day). Meanwhile the young famiy who bought their place will be paying exorbitant property taxes along with the high mortgage.

I find it fascinating that we keep hearing that Prop. 13 helps seniors. It does only if they bought their houses before 1978. My husband and I were in our late forties when we were able to buy a house in 1993, we are seniors. So we pay considerably more property taxes than others on our block in the Bay Area. Plus Chevron and other corporations, who've owned land before 1978, never have to pay their fair share of taxes to help fund services and the educational system. I wish we could repeal Prop 13 and have a more equitable tax system so everyone might benefit.

It was Milton Friedman who pointed out that the tax on land value is the "least bad" tax. Others who have given it thought go much further: it is far superior to other revenue sources as a way to fund public goods. California has an awesome amount of land value, as anyone who needs a home realizes.

The conventional property tax falls on both land values (which are created by the presence and activity of the community, the beneficence of nature, and by public investment in goods and services) and on buildings (which are created by individual effort). Those two are fundamentally different.

California would have been wise to cap, even drop, the tax on buildings. But collecting the lion's share of the annual value of the land is the best first way to finance public spending, whose effect, after all, is to support and increase land value.

The elderly can be protected -- search on "poor widow solution." But why should corporations and trusts and other huge entities be protected from paying in proportion to the value of their land holdings? THAT is how wealth concentrates.

I don't recall Prop 13 as being anti-tax. I remember it as being a remedy for a seriously flawed system of property taxation. It took one-third of my parents' income to pay their property tax.

I was in my 20s and not a real estate property owner. However, I was aware from my parents and newspaper articles of what was going on with property assessments and property taxes throughout California in the pre-Prop 13 days.. Older people were losing their lifetime homes, tiny homes, because of assessments that increased astronomically based on the current value of the land under the house if the house were sold in the current market. The government, through these assessments, was evicting people from their homes. It may have been a drastic proposition but it was necessary.

The following anti-all-taxes campaigns in other states has not been followed in most of California. We actually have fairly high taxes compared to most states. Many new "fees", which are taxes, have been approved by Californians by 2/3rds votes on ballots. These new taxes are less unfair than the old one eliminated by Prop 13. Prop 13 put a limit on an unfairly administered tax. It did not lead to a host of other tax cuts in California. Most Californians in blue areas of the state know what we want to pay taxes to support and vote for those taxes.

I must admit that there are red areas of the state that do not want to pay any taxes at all and vote to eliminate local taxes as much as possible. It shows. They have problems. Some red towns go bankrupt or have poor governance. They lack many public good things because they resist paying for them. It is their loss. There are no free lunches.

Unsurprisingly, the NY Times says nothing about the real beneficiaries of Prop 13: corporate "citizens." When one corporation buys another, their property is not reassessed. By transferring land without reassessment, the corporate share of property taxes in California has plummeted. Most Californians are completely unaware of this inequitable situation and the NY Times is quite happy to keep us in the dark about it. Unlike a corporate "citizen," when I bought a house in 2000, I didn't get to keep the 1978 property value. I pay on its purchase value. Someone buying a house today pays even more, which means I'm now coasting on their pain. There is no limit to how much property one can hold at reduced assessement. My mother owns four houses, all bought prior to 1978. On all that, her tax bill is slightly less than one half my tax bill on the one house I live in. This is insane. Meanwhile, our schools have sunk from the best in the country prior to 1978 to something like second from the bottom today. Let California government get back to providing the services that we all expect and deserve.

This Californian would like to bring sanity back to our property tax system by slowly bringing all property assessments back up to market value, while allowing each family to receive relief from excess reassessment only on their primary residence. This would prevent granny or grandad from being forced to sell to pay taxes. Provide renters with a renter's credit on income tax.

California property values were beginning to skyrocket in 1978. The rules should be amended for sure, but ordinary people could not have stayed in their homes, at the time.