2020 Proposition 19: Shuffling Property Tax Breaks & Making Realtors Happy
This week and next I’m hoping to give readers a glimpse of what to expect with the dozen proposals on the November statewide ballot.
Later on in the season I’ll post more materials on the higher profile measures under consideration.
As has been true with elections since 2012, I’ll endeavor to research and post about as many propositions and local elections as I can. I have no schedule, other than to say it will be done when it’s done.
One thing we can know for sure, tons of money will be spent to support or oppose the various propositions. Where that money comes from is, to me, more important than what the messages being pushed are. I’ll get around to more specifics on funding as the election approaches.
Here’s where we are:
Monday, July 13: Proposition 14, which asks Californians to continue to support stem cell research funding via bond sales.
Tuesday, July 14: Proposition 15, which seeks to amend the property tax structure so commercial land isn’t taking advantage of a law passed with protecting elders from excessive increases.
Wednesday, July 15: Proposition 16, which seeks to undo the state’s ban on affirmative action.
Thursday, July 16: Proposition 17, expanding voting rights to include parolees.
Friday, July 17: Proposition 18, allowing 17 year olds to vote.
***
California Proposition 19: Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Constitutional Amendment
This measure was placed on the ballot by the legislature. There are no formal organizations for or against at present. That doesn't mean people don’t have opinions.
Why: People who sell real estate for a living wanted a mechanism whereby older residents could transfer their current property tax rate when downsizing. (Some counties already have a system like this in place; this will make the break effective statewide.)
If approved by voters, California homeowners who are 55 or older will be able to buy a new home and keep their property tax payment at the same level or a reduced rate — depending on the value of the new house.
Older Californians who might otherwise be reluctant to change homes and pay higher property taxes would receive a break, more homes would be sold, and more commissions would be charged.
Proposition 19 also expands the property tax break for older homeowners to those who lose their home to a wildfire, a program now limited to other kinds of natural disasters.
It will create the California Fire Response Fund (CFRF) and County Revenue Protection Fund (CRPF) and require the California Director of Finance to calculate additional revenues and net savings resulting from the ballot measure.
75% of the calculated revenue would go to the Fire Response Fund & 15%to the County Revenue Protection Fund. The County Revenue Protection Fund would be used to reimburse counties for revenue losses related to the measure's property tax changes. The Fire Response Fund would be used to fund fire suppression staffing and full-time station-based personnel.
How: A 2018 measure supported by the California Association of Realtors allowed older or disabled homeowners to keep a portion of their Prop. 13 tax break when moving.
Since the net effect of this proposal ended up costing schools, the state, and counties monies, it was opposed by organized labor and local government groups. It failed spectacularly, losing by 20 points.
A Los Angeles Times investigation showing that big Hollywood stars were paying 1970-era property tax levels on their rental properties, came to be known as the “Lebowski Loophole” (after Jeff Bridges participation in this lucrative deal), effectively poisoning the political well for the 2018 measure.
The Realtors 2020 version includes an added fiscal sweetener. Under this proposal, anyone who inherits a home from their parents or grandparents would only be allowed to keep the low property taxes only if they use the home as their primary residence and only on the first $1 million between the home’s original purchase price and its market value.
Although they were successful in gathering enough signatures to put the 2020 version on the November ballot, it must not have been polling well.
So version 2020 (Plan B) was born with an added proviso that most of the funding generated by the measure would go to fighting wildfires. That won the support of the influential California Professional Firefighters union. It won’t hurt their cause that wildfires will be high on people’s lists of concerns during voting season.
Assembly member Kevin Mullin was there to save the day, and 2020 Plan B got the two-thirds votes needed in both legislative houses. The original proposal was pulled just before the deadline.
The Rest of the Story: The Howard Jarvis Taxpayers Association thinks this proposition stinks.
Here’s Jon Coupal, with an op-ed from the Daily Breeze:
The assaults on California property owners and taxpayers never stop. And once again the California Legislature has advanced a massive tax increase at the last possible moment when they thought no one was paying attention.
Assembly Constitutional Amendment No. 11 (ACA11), approved by the California Legislature, takes away Proposition 13 protections that California families have under current law and replaces them with a billion-dollar tax increase. Voters will have an opportunity to reject this scheme come November, as ACA11 will appear on the ballot as Proposition 19.
I suspect this version of the Realtors plan to sell more houses will pass, since they’ve decided not to go it alone politically this year. And the “taxpayer advocate” crowd will have its hands full opposing the proposal for a split roll property tax, meaning businesses over a certain size would not get the same tax advantage as grandma.
Voter Guide – You’ve Voted for President, what’s next?
I’ll be writing about many ballot measures and candidates between now and the end of September. That work will be condensed into an handy-dandy voter guide just in time for your mail-in ballots to arrive. I’m the guy who coordinated San Diego Free Press’s Voter Guides over the past decade, so this won’t be my first effort. Stay tuned.
Hey folks! Be sure to like/follow Words & Deeds on Facebook. If you’d like to have each post mailed to you check out the simple subscription form and the right side of the front page.
Email me at WritetoDougPorter@Gmail.com