California Issues - California's State Budget

Proposition 13 Protects Homeowners

   In light of California’s fiscal crisis, some are suggesting that California consider repealing Proposition 13, arguing that the state can no longer afford this important taxpayer protection in light of our massive $14.5 billion state budget deficit. Nothing could be further from the truth.

   Repealing Proposition 13 would be the worst nightmare of every homeowner come true, exposing families to thousands of dollars in higher property taxes annually, while leaving many vulnerable to losing their homes altogether.

   If you think the current problems with the subprime lending meltdown has hurt too many Californians, that would be a drop in the bucket compared to the number who could be forced out of their homes if Proposition 13 were repealed, or even amended.

   Proposition 13 is not a tax break for millionaires. It helps all Californians, especially hardworking Californians, afford the American dream of home ownership by limiting how much state government can increase property tax bills every year.

   Before Proposition 13, thousands of Californians, especially the elderly, faced the prospect of losing their family homes because they could not afford their rising property tax bills.   As home prices rose rapidly during the 1960s and 1970s, so did property tax bills as they were assessed much higher each year to correspond with the new value of the house.

   Many saw their property taxes increase by double digits or more each year, with no relief in sight.  It was not uncommon to see seniors and working families face property tax bills almost as much as their monthly income.  Proposition 13 put an end to this, limiting how much your home is assessed to one percent of the purchase price, and restricting property tax increases to no more than 2 percent each year.

   The savings have been remarkable.  The Howard Jarvis Taxpayers Association found that Californians who bought a median priced home in 2006 saved $9,043 on their tax bills that year, while those who purchased a home 30 years ago have saved an astonishing $143,000 over the years thanks to Proposition 13.  This money has all been put back into the economy.   

   Repealing Proposition 13 would take us back to the days of unchecked property taxes, hurting first-time homeowners already struggling to pay their mortgage bills especially hard.   If property taxes were allowed to increase unrestrained, first time homeowners could see skyrocketing tax increases that force them out of their homes.  Does anyone think they are not taxed enough?   

   Despite the claims of liberal critics, Proposition 13 has not hurt revenue for cities and counties.  Nor has it hurt our schools.  In fact, according to the Howard Jarvis Taxpayers Association, after adjusting for inflation, California spends 30 percent more per pupil than we did prior to the passage of Proposition 13. 

   Furthermore, Teresa Casazza, the acting president of the California Taxpayers Association recently wrote that, “since (the passage of) Proposition 13, local governments have collected higher tax revenues every year.  Even during slow times in the real estate market.  Through economic ups and down, property tax revenue has increased an average of 7.5 percent a year since voters approved the initiative.” 

   Even with our current housing woes, the total assessed value of California homes increased 9.6 percent last year, meaning higher tax revenue.  According to Richard Rider, chairman of San Diego Tax Fighters, San Diego County’s property taxes today are nearly 6.5 times more than residents paid the year before Proposition 13.

    The real problem is not Proposition 13, but rather liberal spending in Sacramento.  Tax revenue grew by 40 percent over the past four years, but liberal Democrats spent every dime of that tax revenue and billions more we don't have – increasing state spending by a whopping 44 percent!

    I don't believe hard-working Californians should be punished with higher property taxes or face losing their homes to pay for more out of control liberal spending.  It's time Sacramento got serious about cutting wasteful spending and live within our means.  Lawmakers must stand firm in defending taxpayers by protecting Proposition 13.