Assignment #8

Assignment #8

Officially titled the “People’s Initiative to Limit Property Taxation”, Proposition 13 was a ballot initiative to amend the California State Constitution. It was one of the most important political/economic events in American History. Howard Jarvis and Paul Gann, leaders of two California taxpayer organizations, joined forces in 1978 to put an amendment to the state constitution on the ballot that would limit property taxes. Proposition 13 was approved by the voters of the state of California on June 6, 1978. Its approval resulted in a cap on property taxes in California, reducing them by an average of 57%. Prop 13 limits property tax rates to no more that 1% of full cash value. Increases in assessed value per capita are capped at 2%. It passed with 65% of voters in favor and 35% against, with 70% of registered voters participating. Proposition 13 was added as Article XIII A to the California Constitution.
No matter if you bought your home last week or have owned your home for twenty years, if you’re a California resident Proposition 13 is protecting you. One of the benefits is that homebuyers are only paying about 1/3 of the property taxes that they would without Prop 13. Proposition 13 also gives homeowners long-term security by providing predictability in taxes. It limits the maximum tax rate to 1%.
Let’s say the value of your home is $350,000, the owner will see a tax bill of $3,500. But what happens if the value of your home doubles? In other states, if the value doubles then your property tax would therefore also double. But because of Proposition 13, in California the taxable value of your home can only go up to 2% per year.
However, not everyone is benefiting from Proposition 13, such as California public schools, libraries and other city services (i.e. police and firefighters.) With property taxes being capped, the state must find ways of new revenue sources to replace the lost funds. These alternatives are usually taxes on income or and sales. But California educators have criticized Prop 13 because they say that state funding never reached the levels that property taxes had provided.
The quality of the state’s education system has decreased. Traditionally, the property tax has been the foundation for education aid in communities across the country. With the property tax caps, schools are receiving less money then they would have otherwise. In the 1960s, California was ranked #1 nationally in student achievement. Now, our schools have fallen to 49th. The State Superintendent of School, Wilson Riles said in response to Prop 13, “It will destroy education in California as we know it. Many schools will close, thousands of teachers will be laid off and the average class size will be between 45 and 60.”

3 Information Sources
Moore, Stephen. "Proposition 13 Then, Now and Forever." CATO Institute. 30 July 1998. 7 May 2007 .
"Proposition 13: Love It or Hate It, Its Roots Go Deep." Cal-Tax Research. Nov. 1993. California Taxpayers Association. 7 May 2007 .
"Proposition 13: a Look Back." Howard Jarvis Taxpayers Association. 7 May 2007 .