For months the assumption in Sacramento was that at least one and possibly more tax increase measures would find their way on the 2016 General Election ballot by initiative. The litany of possible tax increases just might have to move over to make room for a tax cut on the same ballot. The Howard Jarvis Taxpayers Association has filed an initiative to increase the homeowner’s property tax exemption along with a comparable increase in the renter’s credit.
Preliminary estimate on the tax change could result in $2 billion back in the pockets of taxpayers. Perhaps not coincidentally, the state surplus appears to be running $2 billion or more.
The homeowner exemption has not increased from $7,000 since 1974 when the median house price was around $34,000. Property owned and occupied as the owner’s principal place of residence can receive the exemption, which reduces the annual property tax bill for a qualified homeowner by up to $70. The HJTA proposal would jump the exemption up to $32,000 and allow for inflation increases meaning, initially, a homeowner’s saving is $320. The renter’s credit will also enjoy a boost and be tied to inflation.
At the time the cost of housing has been identified as one of the issues that is burdening the middle class and poor, a reduction in cost of housing through the tax break would be a plus for residents and a powerful inducement for voters to look favorably upon this measure of relief.
With the end of the “temporary” Proposition 30 taxes on the horizon, plans are being put together to extend those taxes or make them permanent. As the television pitchman says, “But, wait, there’s more!” Possible property tax increases for commercial property, an oil severance tax and a cigarette tax also have been discussed in earnest.
Because of the low voter turnout for the last gubernatorial election, the numbers needed to qualify a measure for the ballot are relatively small. That is one of the reasons there has been so much talk of tax increase measures on the 2016 ballot. But the low signature requirement works for the taxpayers’ association, as well.
Having both a tax increase or a number of tax increases plus a tax cut on the same ballot (assuming all qualify) will set an interesting political landscape for the General Election.
What positions will the candidates take on the tax increases versus the tax cuts propositions? Will there be campaigns put in place that both boost the tax increase and oppose the tax cut at the same time or campaigns that do the opposite? Might voters see an opportunity to both support the extension of Prop 30 while saving some money for themselves through the homeowner’s exemption and renter’s credit increase?
The HJTA initiative has just scrambled the initiative calculations for 2016.