Californians Could Vote to Expand Prop 13 Property Tax Breaks in November

A biting opinion piece asks why Californians would want to worsen the effects of Proposition 13 by voting yes on Proposition 5.

October 19, 2018, 12:00 PM PDT

By James Brasuell @CasualBrasuell


David Dayen writes on the impending ballot measure facing Californians that could extend the property tax breaks made famous by Proposition 13.

Proposition 5, as the new measure is called on the November ballot, was designed by the real estate industry as an incentive to convince aging residents to move to new homes—and take the property tax rates limited by decades of Proposition 13 with them when they go, thus waking up previously dormant parts of the market.

Dayen's question, however, is whether the state's residents have learned anything from Proposition 13, and proposition 5 seems to indicate that they haven't.

California began an experiment 40 years ago called Proposition 13. The 1978 voter-passed initiative rolled back property tax rates and then capped annual increases at 2% a year. The question then became: Can a modern state provide infrastructure, education, healthcare and fight poverty while simultaneously starving the state coffers?

The answer was no. Property tax revenue dropped nearly 60%. K-12 education spending fell to some of the lowest levels in the nation. The state master plan for first-class higher education and infrastructure was left in tatters. The state has become so dependent on income taxes that it suffers from a volatile boom-and-bust budget cycle.

According to Dayen, Proposition 5 will make all of Proposition 13's negative effects worse. Not only will it continue to reduce revenues to state and local finds, but Dayen argues Proposition will actually raise housing prices as well.

Tuesday, October 16, 2018 in Los Angeles Times

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