California’s attractiveness and Proposition 13

As we’ve seen recently in Park City, real estate taxes that pay for school, police, fire protection, road maintenance, other public things can be an irritant to a lot of people. Some folks feel the system should be scrapped and changed altogether. 

California dealt with that back in 1978 by enacting Proposition 13, an amendment of its State Constitution, by popular vote of California residents. Its aim was to limit the tax rate for real estate by guaranteeing that “The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property.” 

A significant aspect of that initiative is that it requires a two-thirds majority in both legislative houses for future increases of any state tax rates or amounts of revenue collected, including income tax rates. It also requires a two-thirds vote majority in local elections for local governments wishing to increase special taxes (to pay for specific issues like homelessness or road repair; that don’t belong into a general fund.) 

Today, some say that the system is unfair as new homeowners are taxed much more than established ones, which technically is true, and also that the system benefits the older and richer citizens, which also makes sense. 

The fact that California has now lost much of its luster and that its population is declining should also serve as an indicator that not is perfect in the Golden State. Placing the blame on Prop 13 might be going to fast and too far, but when it come to placing blame nothing is ever easy...