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Before Proposition 13 was passed overwhelmingly by voters in 1978, property tax bills were fatal.
Howard Jarvis, namesake of the taxpayer association he founded, witnessed a woman drop dead from a heart attack in a county office when told she would have to pay the new, higher property tax bill on her home in order to keep it.
Let me tell you how property taxes were calculated before Prop. 13, but if you have a pacemaker, please stop reading now.
Property taxes were assessed based on the current market value of the property, and the statewide average tax rate was 2.67%. Now imagine, but not if you have a pacemaker, having to pay 2.67% of the current market value of your home, every year, as a condition of keeping it.
It’s okay, breathe. Proposition 13 cut the tax rate to 1% and capped the rise in assessed value at 2% per year for as long as you own your property, regardless of market value.
But now there’s something on the ballot that could cause property taxes to go up after every election, forever. It’s Proposition 5, and if it passes, in just a few years people would again start losing their homes because of unaffordable, heart-stopping property taxes.
Proposition 5 would raise everyone’s cost of housing and the cost of living, because apartment buildings and business properties pay these taxes, too. Rents and prices would go up. And watch this trick: Prop. 5 would take effect immediately, even lowering the vote threshold for local bond measures that are on the same upcoming Nov. 5 ballot.
Proposition 5 would remove the taxpayer protection that has been on the books since the signing of the 1879 California Constitution: the requirement of a two-thirds vote of the electorate to approve local debt. Even in the handwritten 1849 Constitution, the Legislature was directed to restrict the ability of local governments to take on debt, in order “to prevent abuses.”
Proposition 5 would throw that out and slash the vote needed to pass local bonds (the government’s method of borrowing money) from the current two-thirds down to just 55%.
California voters agreed in 2000 that school bonds should pass with 55%, and now every local government entity wants the same deal — from cities and counties to transit districts and regional associations of governments. So the Legislature put Proposition 5 on the ballot, and if it receives a simple majority of the statewide vote, the taxpayer protection that has been in the Constitution since 1879 would be erased.
Local bonds raise property taxes. With hundreds of government entities panting for more money, there would almost certainly be a local bond measure, maybe two, on every ballot in every election for the rest of time. Once the government consultants finish writing the sugar-coated ballot language that hides the true cost, many of these measures would reach the 55% vote threshold and raise property taxes for decades.
Over and over again.
Proposition 5 is a turbo engine to raise property taxes. The lower vote threshold would apply to bonds for “infrastructure,” broadly defined, and for government housing projects, including the kind that have cost around $800,000 per unit for homeless housing.
Voter-approved local debt raises property taxes. It gets around Proposition 13. That’s why it’s so important to keep the two-thirds vote requirement to approve debt that would burden taxpayers for 30 years or more.
The early Californians had the right idea. “To prevent abuses,” local governments should not too easily be able to drown us in debt.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.