In 1978, Proposition 13 cut property taxes to one percent of the taxable value and capped increases to the taxable value to just two percent a year, with reassessment occurring only for new construction or when there is a change of ownership. It was a significant tax cut after years of inflation-driven tax hikes built up a surplus in Sacramento, while Californians were taxed out of their homes.
Howard Jarvis, the author of Prop. 13 and our organization’s namesake, added provisions to Proposition to prevent the tax “spenders” from finding new ways to take the same amount of money from the tax “payers.”
Prop. 13 requires a two-thirds vote in both houses of the state Legislature to pass new state taxes, and it also says a two-thirds vote is needed to pass local special taxes.
But much like Howard Jarvis feared, the tax-and-spend interests have sought to destroy Proposition 13 ever since, most recently by persuading courts to carve loopholes in its constitutional protections and invent new ways for government agencies to raise revenue.
In 2017, the California Supreme Court’s decision in California Cannabis Coalition v. City of Upland created an ambiguity. It suggested that if a tax increase was placed on the ballot by a citizens’ initiative instead of by a government body, the state constitution (including Proposition 13) may not apply.
That’s why we worked with the business community last year to put the Taxpayer Protection Act on the ballot. More than a million signatures were collected. But then the governor and the legislature sued to have it taken off the ballot, and the California Supreme Court declared that the TPA was a “revision” of the constitution and removed the measure before voters could pass it.
We didn’t take that lying down. The Howard Jarvis Taxpayers Association filed a new initiative this year called the Local Taxpayer Protection Act to Save Proposition 13. This constitutional amendment will restore Prop. 13’s requirement that all local special taxes, those that dedicate the revenue to a specific purpose, must be approved by two-thirds of voters to pass. No exceptions. No loopholes.
The Local Taxpayer Protection Act to Save Proposition 13 makes clear that:
- Local taxes for a special purpose require approval by two-thirds of voters to pass, even if proposed by an initiative backed by special interests.
- New real estate transfer taxes (which are like sales taxes on real estate) are prohibited, except the modest 0.11% documentary transfer tax allowed prior to Proposition 13.
- Existing real estate transfer taxes (including Measure ULA in the City of Los Angeles) are repealed effective December 31, 2028, except the 0.11% documentary transfer tax allowed prior to Proposition 13.
But I know what you’re asking. What’s to stop the same people from taking this taxpayer protection measure off the ballot, too? Although we disagreed with the California Supreme Court’s reasoning, we have taken the justices at their word and crafted this initiative to be fully consistent with the new rules, as written in their own decision. Here is what’s different.
First, this measure is limited to a single section of the constitution. Our previous effort, the court argued, tried to do too much and that’s why it was not just an amendment but a “revision” of the constitution.
Second, this measure only closes loopholes in Proposition 13. Our previous initiative closed loopholes in Prop. 13 while also granting new taxpayer protections. The court took issue with some of those new protections, but not closing any loophole.
Third, this measure deals only with taxes levied on real property or on property ownership. It does not deal with other kinds of taxes, or with fees. The court took issue with our previous initiative because it applied to all taxes and fees.
As I said, we disagreed with their decision, but we have written the Local Taxpayer Protection Act to Save Proposition 13 to stay within the boundaries the court has set.
We are in a nearly 50-year war over whether it will be easier to raise your taxes or not. We think it should not be easier to raise your taxes. If you agree with us, please visit SaveProp13.com and sign the petition to help us pass the Local Taxpayer Protection Act to Save Proposition 13. Voters can print the official petition at home on one sheet of ordinary letter-sized paper or fill out a form to have the petition mailed to them.
Either way, Californians will have the power in their own hands to control taxation.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.