With actions at the end of last week, the prospective battles to alter Proposition 13’s future came into focus. A measure backed by the California Association of Realtors to enhance the benefits of Proposition 13 for seniors and thus offer a solution for the housing crisis submitted more than enough signatures to qualify for the November ballot. Meanwhile, liberal groups backing a property tax increase on commercial property announced they would take time in qualifying their measure, if successful, pushing its ballot appearance to 2020.
Passed overwhelmingly by voters in 1978, Proposition 13 put restrictions on property taxes setting the assessed rate at 1% of the property’s value at time of purchase, allowing a capped yearly inflation increase and set new standards to pass tax increases on the state and local levels.
The two proposed initiatives expressed quite different ideas to change the nearly 40-year old tax reform.
Noting that seniors stay in their homes to enjoy their Prop 13 tax protection, the Realtors proposed a plan to allow seniors to move anywhere in the state and either keep their current taxes depending if they buy a home of equal or lesser value to the one they are selling or benefit from a formula that would lessen the property taxes on a more expensive home.
The idea is to encourage seniors to move from homes that are larger and built for families. The Realtors would increase the stock of homes for sale. They argue that California’s intractable housing crisis would benefit by freeing up more homes, and with more product, reducing prices that are shooting skyward. In addition, the measure’s backers benefit from increased home selling and buying.
The groups behind the split roll proposal to separate business property from residential property argue that business is not paying its fair share of property taxes. They want to gain billions of dollars for local governments and schools. In this case, the measure’s backers also gain a pool of money to meet pension and salary demands.
In essence, if both measures made it to the same ballot voters would be making decision on property tax reforms that the Legislative Analyst predicts, in the case of the Realtors measure, eventually would cost local governments about $1 billion, while estimating that the split roll could add up to $11 billion to those governments.
How the voters would do the math on those mixed reform messages and their effects on the broader economy is unclear. But for the 2018 election they now don’t have to pick and choose.
Late last week, according to Rob Pyers of the California Target Book, the Realtors submitted 934, 897 signatures to qualify their measure. They need only 585, 407 so it appears they will have no problem hitting the needed number.
On Friday, the split roll campaign announced they intended to head for the 2020 ballot with the now misnamed “California Schools and Local Communities Funding Act of 2018.” The $3 a signature they were paying to complete the petition drive was dropped to $2. While they would miss the deadline to qualify for 2018, they still can meet a reasonably low signature requirement (the aforementioned 585,407), which is calculated on voter turnout in the last gubernatorial election.
The coming race for governor is certain to bring out more voters and the signature requirement to qualify an initiative would increase, as would the per signature cost. By qualifying early, the proponents will have time to make their case and raise money for the coming campaign. 2020 may also be a better year for them since a presidential election brings with it a higher voter turnout of voters not often engaged in public affairs.
But the delay will also assist members of the business community who have already declared opposition to the split roll. Business members notoriously do not pony up financial aide for political efforts until they see the wolf is at the door.
If the split roll qualifies two years before the election, the business community will know the wolf is coming and will act accordingly.