To understand why Proposition 13 is fair, one must understand how it
works. Proposition 13 curbs property taxes by restricting the maximum
rate (1%) and, more important, by limiting increases in assessed
valuation (2% annually). With the latter provision, it is easy to see
how a home’s current value can greatly exceed it’s taxable value over a
span of just a few years.
The substantial difference between a property’s actual value and its taxable value disappears when the property changes hands. When this occurs, county assessors reassess the property at full market value. Thus, recent purchasers derive no immediate benefit from the limitation on annual increases in taxable value.
Shortly after Proposition 13’s adoption by the voters in 1978, the California Supreme Court recognized its inherent fairness. Justice Frank K. Richardson, speaking for a nearly unanimous court, concluded that “an acquisition value system…may operate on a fairer basis than a current value approach.”
Yet Proposition 13 has been mostly fair to homeowners, though inequities have crept up in the commercial property market and the resulting tax structure has become increasingly vulnerable to ups and downs in the economy, resulting in the yearly deep budget deficits we have seen over the last several years.
But looking strictly at homeowners, Proposition 13 has worked pretty well for two main reasons: one, the short-term inequities of neighbors paying different property tax bills even out over time as taxpayers move around and, two, it gives taxpayers certainty, the key to fair taxation.
I was in middle school in VUSD when Prop. 13 passed and remember the quality of the schools I attended somehow eroding after that (obviously due to a lot more than just Prop. 13). At the same time, I appreciate that many members of my family have been able to retire in the homes they purchased before Prop. 13 due to affordable property taxes. I also appreciate that Prop. 13 has helped commercial property owners stay in business. For me, however, Prop. 13 means that my generation is paying far more in property taxes for homes smaller than older property owners living in larger houses.
As voters, we have passed a lot of propositions that sound good when we vote for them, but when you put them all together later they appear to have tied the hands of legislators to do their primary job—draw up a reasonable spending plan every year for the state.
The substantial difference between a property’s actual value and its taxable value disappears when the property changes hands. When this occurs, county assessors reassess the property at full market value. Thus, recent purchasers derive no immediate benefit from the limitation on annual increases in taxable value.
Shortly after Proposition 13’s adoption by the voters in 1978, the California Supreme Court recognized its inherent fairness. Justice Frank K. Richardson, speaking for a nearly unanimous court, concluded that “an acquisition value system…may operate on a fairer basis than a current value approach.”
Yet Proposition 13 has been mostly fair to homeowners, though inequities have crept up in the commercial property market and the resulting tax structure has become increasingly vulnerable to ups and downs in the economy, resulting in the yearly deep budget deficits we have seen over the last several years.
But looking strictly at homeowners, Proposition 13 has worked pretty well for two main reasons: one, the short-term inequities of neighbors paying different property tax bills even out over time as taxpayers move around and, two, it gives taxpayers certainty, the key to fair taxation.
I was in middle school in VUSD when Prop. 13 passed and remember the quality of the schools I attended somehow eroding after that (obviously due to a lot more than just Prop. 13). At the same time, I appreciate that many members of my family have been able to retire in the homes they purchased before Prop. 13 due to affordable property taxes. I also appreciate that Prop. 13 has helped commercial property owners stay in business. For me, however, Prop. 13 means that my generation is paying far more in property taxes for homes smaller than older property owners living in larger houses.
As voters, we have passed a lot of propositions that sound good when we vote for them, but when you put them all together later they appear to have tied the hands of legislators to do their primary job—draw up a reasonable spending plan every year for the state.
