For sale/SOLD sign. (Photo: HUD.gov)
SF Chronicle Calls Prop. 13 Property Tax Cuts ‘Subsidies’
Democrats believe that all wealth belongs to government, and not to the individuals who earn it
By Katy Grimes, January 6, 2025 10:59 am
The San Francisco Chronicle has an article today about Proposition 13, the 1978 ballot initiative overwhelmingly passed by California voters, which reduced property tax rates on homes, businesses, and farms by about 57%.
Opponents have long claimed that because of Proposition 13, public schools have been robbed of necessary revenue, and that businesses have not been paying their fair share of property taxes.
In “California property tax map: How much homeowners in every ZIP code are saving due to Prop 13,” the SFC says “Our map shows how Proposition 13 affects property tax subsidies on average in every city, county and ZIP code in California. Prop 13 often keeps the taxable value of a home far below its market value, which results in tax subsidies.”
They claim tax reductions are “subsidies.” Are you kidding me?
Proposition 13 prevented people from being taxed out of their homes and for the first time gave taxpayers and commercial property owners a measure of certainty over their taxes.
According to the Howard Jarvis Taxpayers Association, under Proposition 13, “property tax increases on any given property were limited to no more than 2% a year as long as the property was not sold. Once sold, the property was reassessed at 1% of the new market value with the 2% yearly cap placed on this new assessment.”
You can see why Prop. 13 was frequently referred to as the “Holy Grail of the tax revolt.”
“Prior to Proposition 13, the tax rate throughout California averaged a little less than 3% of market value, and there were no limits on increases either for the tax rate or property value assessments,” HJTA said. “Some properties were reassessed 50% to 100% in just one year and their owners’ tax bills jumped correspondingly.”
“By the late 1970s California’s property tax burden was intolerable. For many seniors on fixed incomes, it meant selling their homes or giving it up to the tax man. Howard Jarvis told the story of watching an elderly lady suffering a heart attack while visiting the Los Angeles assessor’s office when she couldn’t convince the authorities to change her tax bill.”
The icing on the cake is that Proposition 13 also requires that all state tax rate increases be approved by a two-thirds vote of the legislature, and local tax increases have to be approved by a vote of the people.
“The people’s right to vote on taxes is a key taxpayer protection.”
However, in the Chronicle article, not once was the HJTA mentioned, despite being the sole organization fighting to keep Proposition 13 in place under annual onslaughts.
The SFC bellyaches about Prop. 13 “restraining how much property taxes can increase along with a home’s value.”
And the assumption that Prop. 13’s method of tax reduction is somehow a “subsidy” springs from the same mindset that characterizes some specific tax relief measures – like the home mortgage deduction – as ‘tax expenditures.’
Democrats believe that all wealth belongs to government, and not to the individuals who earn it.
This is corrupt and malicious.
Opponents of Prop. 13 have long targeted commercial property owners, playing the “us vs. them” game to justify a “split roll,” which is a targeted tax increase on business.
A “split roll” applies a different tax rate to commercial properties than to residential properties, removing the protections of Proposition 13 from commercial properties, allowing a higher tax rate on these properties.
Cha-ching.
In 2020 voters defeated Proposition 15, referred to as “tax reform” by proponents, but would have removed property tax protections from commercial property owners. The people who own their own commercial properties and structures, are often multi-generational families, who operate low-margin manufacturing, retail and restaurant establishments.
Supporters of Prop. 15 included Gov. Gavin Newsom, the CA Democrat Party, the California Teachers Association PAC, and the SEIU California State Council, both of which contributed millions.
As the HJTA reported, “A study by the University of California at Davis found that under Prop. 13 low and middle income people, on average, pay less in taxes than they would have paid under the former property tax system.”
SFC’s position appears to be the same as legislative Democrats which attempt every year to overturn Prop. 13 or split off commercial properties:
“Governments devised numerous ways of recouping the revenue lost to Prop 13, but overall tax revenue never recovered completely. After adjusting for inflation, the LAO’s 2016 analysis — the most recent comprehensive economic study of Prop 13 — found cities and counties earned about $150 less tax revenue per person in the 2014 fiscal year than they did in 1977.
Total revenue, not just tax revenue, did increase for local governments, thanks to new fees created to fill the Prop 13 gap. Compared with the rest of the country, however, California’s per-person local government revenue had below average growth.”
Because California relies almost entirely on tax revenues and rich taxpayers to fund its annual budget, the concept of cutting taxes is antithetical to Democrats’ spending plans.
Yet they seem to understand high taxes and fees price home builders and those who want to buy homes right out of the market:
“Many local governments implemented development fees to recover tax revenue lost to Prop 13. Unlike taxes, these fees do not require voter approval, making them an easier source of revenue.
California has higher average development fees than most similar states, according to the 2016 LAO report. In 2018, UC Berkeley’s Terner Center for Housing Innovation found that total development fees averaged $62,000 per single-family unit in Oakland. The high fees often make it more difficult to build homes.”
However, they can’t help themselves, even when faced with prosperity.
“In the aftermath of Prop 13 passing, California outperformed the rest of the nation in nearly every conceivable measure including personal income growth, employment growth, and real estate appreciation values,” HJTA says.
But… But… But… government wasn’t getting a big enough cut!
Jon Coupal, President of the Howard Jarvis Taxpayers Association told the Globe, “Ronald Reagan was 100% right when he said, ‘Are you entitled to the fruits of your own labor or does government have some presumptive right to spend and spend and spend?’”
Enshrined in the California Constitution Under Proposition 13, the ballot initiative also:
- prohibits the state legislature from enacting new taxes on the value or sale of properties.
- requires a two-thirds vote of the state legislature to increase non-property taxes.
- requires local governments to refer special taxes to the ballot and require a two-thirds vote of electors.
- makes the state government responsible for distributing property tax revenue among local governments.
You can see why maintaining Proposition 13 “makes property taxes predictable and stable so homeowners can budget for taxes and remain in their homes.”
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Good luck with that, scavengers. At the same time, heads up, everybody. Also at the same time, I’m confident the Howard Jarvis Taxpayers Assoc. is on this and will be on this and will nip in the bud whatever pops up when the vultures think no one is paying attention.
Possibly the Howard Jarvis taxpayer show with Jon Coupal and Susan Shelley, which plays on KABC Tuesdays at 6 p.m. and I believe is now simulcast in the Bay Area also, may be making the SF’ers and the Chronicle nervous, in that it is extremely informative and compelling to listen to. Knowledge is power, after all, especially for taxpayers.
Here is the link to the KABC 790 Howard Jarvis Show Podcast
https://www.kabc.com/howardjarvisshow/
I may be wrong in this but wasn’t the California Lottery proposed as a way to fund “schools” and then when the Legislature saw schools were getting money from the lottery they decided to cut school funding from the General Fund and use that money elsewhere?
Who’s robbing who?
“…Opponents have long claimed that because of Proposition 13, public schools have been robbed of necessary revenue…”
The subtitle is exactly right. Leftists believe they own EVERYTHING including your house. You just rent it from them via taxation.
Prop 98 took care of all complaints about Prop 13 robbing schools. Can’t believe they even raised that issue for greater scrutiny.
Because Prop 98 guarantees public education (K-14) automatically gets 50% of all general fund revenues, off the top which drops right into the teachers unions laps. They don’t have to do anything to get this money, no results, no promises to spend it on buildings as well as people.
Just all unearned cream, which in turn made the teachers unions into a mega-devouring always unhappy political powerhouse in this state. While dumping a #45 ranked school system on our laps, demanding even more money than the Prop 98 50% off the top ..or else we can expect no improvements.
SEIU (CSEA – the SEIU branch for school employees) share in the Prop 98 largesse. Can you believe the gall of both SEIU and the teachers unions to still keep demanding more. These are con artists we are now forced to support. They have held political power for decades now creating the one-party super majority tyranny that turned this once golden state into national joke.
And now they demand even more money???? NO TO ANY MORE MONEY GOING TO TEACHERS UNIONS AND SEIU – STOP THE “More money for education shakedown” CON GAME.
https://www.zerohedge.com/economics/why-property-tax-illegal
People unironically think that if they bought their house decade earlier than their neighbor, it somehow justifies them paying lower property taxes. Why? Are you going to use less infrastructure if you bought in 1970s? Less schools, roads? This is exactly why younger generations despise baby boomers with their “I got mine, f..k everyone else” mentality. Call me a scavenger, a leftist (which I am not), but there is no wonder why California ages faster and drains population every year.
Baby boomers would rather have Young Americans leave for Texas and replaced by illegal immigrants and Chinese investors, as long as their property values don’t drop.
Did you even read the article? The entire purpose of Prop 13 was solely to prevent people from being taxed out of their homes by a ruthless government. Government is not being starved because of Prop 13 – there is plenty of tax revenue to pay for schools, infrastructure, etc… if the government prioritized it.
Actually Katy, it looks like that person DID read the article — and doesn’t buy your sad excuse for shilling for the Cal Chamber. Young Californian is exactly right. What justifies someone paying a different tax rate because of when they bought their home? I don’t pay a different sales tax rate based on when I moved to California. The subsidies created by Prop. 13 favor older, whiter, richer Californians. It is a fact. You apparently don’t want to deal with facts, however. If that isn’t the case, show me the numbers that say otherwise.
Prop 13 does not favor the ethnicity of certain homeowners. And those who choose to keep their homes for decades will not be taxed out of their homes when they retire under Prop 13.
Proposition 13 stabilizes neighborhoods because residents are no longer driven out by unaffordable tax increases.
All taxpayers benefit because Proposition 13 guarantees their right to vote on new local taxes, and it requires a two-thirds vote of the Legislature to increase state taxes.
Despite what many politicians say, total property tax revenues to local governments in California have increased at a rate exceeding inflation and virtually all other economic indicators
small business owners, benefit because Proposition 13 makes property taxes predictable for businesses, and it helps owners budget and invest in growing their business. These are the facts about Prop 13 which you could have confirmed on your own.