ARTICLE
Is it déjà vu again? For Californians who have been in the state for years — and for property owners — the words, Prop. 13 bring back memories of 1978 — when the ‘first Prop. 13’ was approved by voters and signed into law by Governor Jerry Brown during his first of four terms as California’s Governor. Governor Brown did not support this Prop. 13 but held his nose and implemented it as the will of the people. A California History Lesson: Proposition 13 (officially named the People's Initiative to Limit Property Taxation) was an amendment of the California Constitution enacted during 1978, by means of the initiative process. The initiative was approved by California voters on June 6, 1978. It was upheld as constitutional amendment by the United States Supreme Court in the case of Nordlinger v. Hahn, 505 U.S. 1 (1992). Proposition 13 is embodied in Article XIII A of the Constitution of the State of California. The most significant portion of the act is the first paragraph, which limits the tax rate for real estate: Section 1. (a) 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. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties. The proposition decreased property taxes by assessing values at their 1976 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2 percent per year. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction. These rules apply equally to all real estate, residential and commercial—whether owned by individuals or corporations. The other significant portion of the 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. (A "special tax" is a tax devoted specifically to a purpose: e.g. homelessness or road repair; money that does not go into a general fund.) Many in local government have argued that Prop.13 shifted property tax revenue away from local government where this revenue was used to repair, maintain and build schools and other local infrastructure projects. It is clear that this shift changed the taxing behaviors and land use designations for local government to re-coup property tax revenues through sales tax and other financial means: RE: increases fees to developers. Now comes the new 2020 version of Prop. 13. California Proposition 13, the School and College Facilities Bond, that is on the March 3 ballot as a legislative referred question to the voters. Proposition 13 would authorize $15 billion in bonds for school and college facilities in California, including $9 billion for preschool and K-12 schools, $4 billion for universities, and $2 billion for community colleges. According to the California Legislative Analyst, the state would make payments totaling an estimated $26 billion, including $15 billion in principal and $11 billion in interest, over 35 years from the General Fund. Proposition 13 was designed to distribute bond revenue as follows: The new Proposition 13 would also make changes to the formula used to distribute state bond funds to schools, the rules governing local bond measures, and school districts' abilities to assess developer fees. Ballotpedia provides a balanced analysis of the Measure: https://ballotpedia.org/California_Proposition_13,_School_and_College_Facilities_Bond_(March_2020) The proposed bond is the result of Assembly Bill 48, which the Legislature passed last year and Gov. Gavin Newsom signed into law, authorizing the measure to appear on the ballot. It gained strong bipartisan support, passing 69 to 1 in the Assembly and 35 to 4 in the Senate. Legislators amended AB 48 to include just one bond measure, which was re-named the Public Preschool, K-12, and College Health and Safety Bond Act of 2020. The Yes on 13 campaign is led by a coalition of teachers unions and the state’s building industry. The main opposition comes from the Howard Jarvis Taxpayers Association, whose mission includes preserving the historic Proposition 13, approved in 1978, and its property tax protections for homeowners and businesses. Supporters of this ‘new prop. 13,’ as it’s been called, say it’s needed to repair and modernize the state’s K-12 schools, community colleges and public universities. State Superintendent of Public Instruction Tony Thurmond, who supports the bond, said it would help make aging schools earthquake safe and remove mold, asbestos and lead pipes. It would also modernize school vocational centers, he added, noting 10 percent of California’s schools are at least 70 years old. “Most school districts struggle just to keep up with basic, basic maintenance and repairs,” Thurmond said. “They need help from our state to be able to handle some of these larger needs that will be able to keep our kids safe and help schools deal with lead and mold and seismic needs.” Meanwhile, a prominent taxpayer’s group has opposed the measure, saying the state should use its multibillion-dollar budget surplus and hold off on more borrowing. Jon Coupal with Howard Jarvis said, “He believes the goals of the new Prop 13 bond are worthy, but he said the state should use its $5.6 billion budget surplus for school repairs rather than going further into debt.” According to the Western Electrical Contractors Association (WECA), they state it is inappropriate for the Legislature to create, in a funding measure, an incentive for school districts to execute a Project Labor Agreement [PLA]. WECA believes that the PLA language 'increases the odds that labor groups will be receiving State funds and non-union contractors will not be able to meet those standards. This has raised the concerns of local construction companies may be at a competitive disadvantage for a local project. Here is a latest write up on the summary of the Prop. 13 as well as an Editorial from the San Jose Mercury News and East Bay Times. http:///http://www.capradio.org/145594http:/// San Jose Mercury News Opinon on Prop. 13 The Chamber remains neutral the new Prop. 13 because our members are split on the issue. We are concerned that if Prop. 13 passes it will have a doubling effect on local school bonds raising the percentage rate of bond indebtedness. There is no question that many schools in Santa Cruz County are in dire need to obtain local funding for school maintenance and repairs as several school districts and the community college have parcel tax and sales tax measures on the March 3 ballot. We are providing this as an educational piece to help you, the voters of Santa Cruz County to make informed decisions on March 3.
Is it déjà vu again? For Californians who have been in the state for years — and for property owners — the words, Prop. 13 bring back memories of 1978 — when the ‘first Prop. 13’ was approved by voters and signed into law by Governor Jerry Brown during his first of four terms as California’s Governor. Governor Brown did not support this Prop. 13 but held his nose and implemented it as the will of the people.
A California History Lesson: Proposition 13 (officially named the People's Initiative to Limit Property Taxation) was an amendment of the California Constitution enacted during 1978, by means of the initiative process. The initiative was approved by California voters on June 6, 1978. It was upheld as constitutional amendment by the United States Supreme Court in the case of Nordlinger v. Hahn, 505 U.S. 1 (1992). Proposition 13 is embodied in Article XIII A of the Constitution of the State of California.
The most significant portion of the act is the first paragraph, which limits the tax rate for real estate:
Section 1. (a) 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. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
The proposition decreased property taxes by assessing values at their 1976 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2 percent per year. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction. These rules apply equally to all real estate, residential and commercial—whether owned by individuals or corporations.
The other significant portion of the 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. (A "special tax" is a tax devoted specifically to a purpose: e.g. homelessness or road repair; money that does not go into a general fund.)
Many in local government have argued that Prop.13 shifted property tax revenue away from local government where this revenue was used to repair, maintain and build schools and other local infrastructure projects. It is clear that this shift changed the taxing behaviors and land use designations for local government to re-coup property tax revenues through sales tax and other financial means: RE: increases fees to developers.
Now comes the new 2020 version of Prop. 13. California Proposition 13, the School and College Facilities Bond, that is on the March 3 ballot as a legislative referred question to the voters.
Proposition 13 would authorize $15 billion in bonds for school and college facilities in California, including $9 billion for preschool and K-12 schools, $4 billion for universities, and $2 billion for community colleges. According to the California Legislative Analyst, the state would make payments totaling an estimated $26 billion, including $15 billion in principal and $11 billion in interest, over 35 years from the General Fund.
Proposition 13 was designed to distribute bond revenue as follows:
The new Proposition 13 would also make changes to the formula used to distribute state bond funds to schools, the rules governing local bond measures, and school districts' abilities to assess developer fees.
Ballotpedia provides a balanced analysis of the Measure: https://ballotpedia.org/California_Proposition_13,_School_and_College_Facilities_Bond_(March_2020)
The proposed bond is the result of Assembly Bill 48, which the Legislature passed last year and Gov. Gavin Newsom signed into law, authorizing the measure to appear on the ballot. It gained strong bipartisan support, passing 69 to 1 in the Assembly and 35 to 4 in the Senate. Legislators amended AB 48 to include just one bond measure, which was re-named the Public Preschool, K-12, and College Health and Safety Bond Act of 2020.
The Yes on 13 campaign is led by a coalition of teachers unions and the state’s building industry. The main opposition comes from the Howard Jarvis Taxpayers Association, whose mission includes preserving the historic Proposition 13, approved in 1978, and its property tax protections for homeowners and businesses.
Supporters of this ‘new prop. 13,’ as it’s been called, say it’s needed to repair and modernize the state’s K-12 schools, community colleges and public universities. State Superintendent of Public Instruction Tony Thurmond, who supports the bond, said it would help make aging schools earthquake safe and remove mold, asbestos and lead pipes. It would also modernize school vocational centers, he added, noting 10 percent of California’s schools are at least 70 years old.
“Most school districts struggle just to keep up with basic, basic maintenance and repairs,” Thurmond said. “They need help from our state to be able to handle some of these larger needs that will be able to keep our kids safe and help schools deal with lead and mold and seismic needs.”
Meanwhile, a prominent taxpayer’s group has opposed the measure, saying the state should use its multibillion-dollar budget surplus and hold off on more borrowing. Jon Coupal with Howard Jarvis said, “He believes the goals of the new Prop 13 bond are worthy, but he said the state should use its $5.6 billion budget surplus for school repairs rather than going further into debt.”
According to the Western Electrical Contractors Association (WECA), they state it is inappropriate for the Legislature to create, in a funding measure, an incentive for school districts to execute a Project Labor Agreement [PLA]. WECA believes that the PLA language 'increases the odds that labor groups will be receiving State funds and non-union contractors will not be able to meet those standards. This has raised the concerns of local construction companies may be at a competitive disadvantage for a local project.
Here is a latest write up on the summary of the Prop. 13 as well as an Editorial from the San Jose Mercury News and East Bay Times. http:///http://www.capradio.org/145594http:///
San Jose Mercury News Opinon on Prop. 13
The Chamber remains neutral the new Prop. 13 because our members are split on the issue. We are concerned that if Prop. 13 passes it will have a doubling effect on local school bonds raising the percentage rate of bond indebtedness.
There is no question that many schools in Santa Cruz County are in dire need to obtain local funding for school maintenance and repairs as several school districts and the community college have parcel tax and sales tax measures on the March 3 ballot. We are providing this as an educational piece to help you, the voters of Santa Cruz County to make informed decisions on March 3.