When it comes to gathering sufficient property taxes, Prop 13 is no problem at all – except for profligate spenders.  Look at the history of my San Diego County – a history that pretty much reflects the history of property taxes in the urban/suburban counties that hold over 85% of California’s population.

According to the SD County Tax Assessor, in 1977 – the year BEFORE Prop 13 took effect (when everything was working great, according to Prop 13 critics) – our countywide property tax revenue was about $639 million.  In the 2012-2013 fiscal year, our county treasurer reported real estate property tax revenues of $4.630 BILLION.  For every property tax dollar collected in 1977, the county in 2012-13 collected $7.25.

During that time frame, our county population has grown about 86%, and inflation has gone up about 258%. Hence property tax revenues today are substantially higher than the bloated PRE-Prop 13 year, even after adjusting for inflation and population growth.

In 2009, California ranked 15th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states.  But CA property taxes per owner-occupied home were the 10th highest in the nation in 2009.

http://www.taxfoundation.org/taxdata/show/251.html and http://www.taxfoundation.org/taxdata/show/1913.html (2009 latest year available)

It turns out that, under Prop 13, property tax revenue is FAR more stable than our other forms of tax revenue.  During the recession, income tax revenue plunged, and sales tax revenue significantly declined.

But property tax revenue seldom goes down AT ALL.  Since the year Prop 13 passed in 1978, San Diego County real estate property tax revenue has ALWAYS gone up – every year – until the 2009-10 fiscal year, when it dropped (drum roll) 1.5%.  The next year property tax revenue slipped another 0.9%, but in 2011-12 year it was up 1.1%, and in 2012-13 it was up another 0.9%.

Not one person in a thousand knows about this revenue stability.  The press has not covered these amazing facts.

Revenue is up because Prop 13 has the little-known added benefit of smoothing out real estate property tax revenue from year to year.  Most properties this past year (generally those purchased prior to 2003) had their property tax go up 2%.  Add to that the property resales, property improvements, “catch up” reassessments and new structures (all of which establish new tax assessment levels), and the revenue stayed rather constant in the teeth of our economic downturn.

Consider what happens without Prop 13 protection:  In the real estate boom years from 1998 through 2005, property taxes would have SOARED.  Even WITH the Prop 13 limitations, San Diego County property tax revenue collection during this period STILL rose 111%.   But then in the next four years, dropping property values would have caused a dramatic plummet in property tax revenues – revenues that governments would now be hooked on – just like we see with our volatile sales taxes, and especially with our hugely erratic income tax revenues.  Property tax revenues are CA governments’ one steady, reliable source of income – thanks to Prop 13.