California Proposition 13 Tax Transfer Initiative (2018)

California Proposition 13 Tax Transfer Initiative
Flag of California.png
Election date
November 6, 2018
Topic
Taxes and Property
Status
Qualified for the ballot
Type
Amendment 
& Statute		Origin
Citizens
The California Proposition 13 Tax Transfer Initiative has qualified to appear on the ballot in California as a combined initiated constitutional amendment and state statute on November 6, 2018.[1]
A "yes" vote supports amending Proposition 13 (1978) to allow homebuyers who are age 55 or older or severely disabled to transfer their tax assessments, with a possible adjustment, from their prior home to their new home, no matter (a) the new home's market value; (b) the new home's location in the state; or (c) the buyer's number of moves.
A "no" vote opposes amending Proposition 13 (1978) to change how tax assessments are transferred between properties for homebuyers who are age 55 or older or severely disabled.
On May 17, 2018, the secretary of state announced that enough signatures had been verified for the initiative to be placed on the ballot for the general election on November 6, 2018.

Overview

The measure would amend Proposition 13 (1978) to allow homebuyers who are age 55 or older or severely disabled to transfer the tax-assessed value from their prior home to their new home, no matter (a) the new home's market value; (b) the new home's location in the state; or (c) the number of moves.[1] As of 2018, homebuyers over 55 years of age were eligible to transfer their tax assessments from their prior home to their new home if the new home's market value is equal to or less than the prior home's value and once in their lifetimes. Furthermore, counties, not the state, decide whether tax assessments can be transferred across county lines.[2]
If the new home is a different value than the prior home, the initiative would allow for an adjusted value between the old and new values.[1] If the new home has a higher market value then the prior home, the assessed value would be adjusted upward. If the new home has a lower market value then the prior home, the assessed value would be adjusted downward. The formulas for the adjustments would as follows:[2]
Upward adjustment: (assessed value of their prior home) + [(the new home’s market value) - (the prior home's market value)]
Example: An individual sold her house for $500,000. The house had a tax-assessed value of $75,000. She bought a new house for $800,000. The tax-assessed value of the new house would be ($75,000) + [($800,000)-($500,000)] = $375,000.
Downward adjustment: (assessed value of their prior home) × [(the new home’s market value) ÷ (the prior home's market value)]
Example: An individual sold his house for $500,000. The house had a tax-assessed value of $75,000. He bought a new house for $300,000. The tax-assessed value of the new house would be ($75,000) × [($300,000) ÷ ($500,000)] = $45,000.
California Proposition 13, the Tax Limitations Initiative, was on the ballot for the election on June 6, 1978. Voters approved Proposition 13. Proposition 13 required that properties be taxed at no more than 1 percent of their full cash value shown on the 1975-1976 assessment rolls and limited annual increases of assessed (taxable) value to the inflation rate or 2 percent, whichever was less. When a property is sold or transferred to new owners, however, the property is reassessed at 1 percent of its full cash value and the limit on increases to assessed value resets.[3]
In 1986, voters approved Proposition 60, which amended Proposition 13 to allow homeowners over the age of 55 to transfer the taxable value of their present home to a replacement home, assuming the replacement home was of equal or lesser value, located within the same county, and purchased within two years of selling the original home.[4] Proposition 13 was again amended in 1988 when voters approved Proposition 90, which allowed qualified homeowners age 55 or older to transfer the current taxable value of their original home to a replacement home in another county, but only if the county in which the replacement home is located agrees to participate in the program.[5]
As of May 12, 2018, there was one ballot measure committee registered in support of the measure—Homeownership for Families and Tax Savings for Seniors. The campaign had raised $7.20 million, with 58 percent from the California Association of Realtors Issues Mobilization PAC and 42 percent from the National Associaton of Realtors. As of May 12, 2018, there was no committees registered to oppose the initiative.[6]

Text of measure

Ballot title

The official ballot title is as follows:[7]
“Changes Requirements for Certain Property Owners to Transfer Their Property Tax Base to Replacement Property. Initiative Constitutional Amendment and Statute.[8]”

Petition summary

The summary provided for inclusion on signature petition sheets is as follows:[7]
“Removes the following current requirements for homeowners who are over 55 years old or severely disabled to transfer their property tax base to a replacement residence: that replacement property be of equal or lesser value, replacement residence be in specific county, and the transfer occur only once. Removes similar replacement-value and location requirements on transfers for contaminated or disaster-destroyed property. Requires adjustments to the replacement property’s tax base, based on the new property’s value.[8]”

Fiscal impact

Note: The fiscal impact statement for a California ballot initiative authorized for circulation is prepared by the state's legislative analyst and director of finance.
The fiscal impact statement is as follows:[7]
“Annual property tax losses for cities, counties, and special districts of around $150 million in the near term, growing over time to $1 billion or more per year (in today’s dollars). Annual property tax losses for schools of around $150 million per year in the near term, growing over time to $1 billion or more per year (in today’s dollars). Increase in state costs for schools of an equivalent amount in most years.[8]”

Full text

The full text of the initiative is available here.

Support

The Homeownership for Families and Tax Savings for Seniors, a political action committee, was organized to sponsor the ballot initiative.[6]
The California Association of Realtors (CAR) developed the ballot initiative. Alex Creel, senior VP of governmental affairs for CAR, filed the initiative. CAR, in a statement about the initiative, said, "It's important because seniors, who are often on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this 'moving penalty' almost three-quarters of homeowners 55 and older haven't moved since 2000."[9]

Arguments

Steve White, president of the California Association of Realtors, said:[10]
“Many seniors live in homes that no longer fit their needs because their homes are now too big or too far away from their families. If they want to downsize or move closer to their children, they could face property tax increases of 100 percent, 200 percent or even 300 percent.[8]”
The California Chamber of Commerce endorsed the ballot initiative, stating:[11]
“
California is facing a massive housing shortage and needs at least 100,000 additional new units a year to meet demand. The CalChamber Board voted to support this measure because it could help ease the shortage by freeing up modest-priced and move-up housing for young families.
The change is important because seniors, who often are on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this “moving penalty,” almost three-quarters of homeowners 55 and older haven’t moved since 2000. In addition, a recent estimate from the Legislative Analyst’s Office found that this initiative would increase home sales in the tens of thousands per year.[8]
”

Opposition

Arguments

Rep. David Chiu (D-17) said he opposed the initiative:[12]
“It doesn’t add housing, and it is going to make it harder for cities and counties to pay for schools, infrastructure and public safety to the tune of $2 billion per year. We’re in the midst of the most intense housing crisis our state has ever experienced, and this proposal does nothing to address it.[8]”
Laura Clark, executive director of YIMPY Action, criticized the measure, saying:[12]
“We’re talking about, once again, another tax giveaway to people who are wealthy.[8]”

Campaign finance

See also: Campaign finance requirements for California ballot measures
Total campaign contributions[13]
as of May 12, 2018[14]
Category:Ballot measure endorsements Support:$7,204,875.08
Circle thumbs down.pngOpposition:$0.00
As of May 12, 2018, there was one ballot measure committee registered in support of the measure—Homeownership for Families and Tax Savings for Seniors, Sponsored by the California Association of Realtors. The committee had received $7.20 million, with 58 percent from the California Association of Realtors Issues Mobilization PAC and 42 percent from the National Associaton of Realtors. The committee had spent $6.14 million.[6]
As of May 12, 2018, there were no committees registered in opposition to the measure.[6]

Support

The contribution and expenditure totals for the committee in support of the initiative were current as of May 12, 2018.[6]
Committees in support of the Proposition 13 Tax Transfer Initiative
Updated as of May 12, 2018
Supporting committeesCash contributionsIn-kind servicesCash expenditures
Homeownership for Families and Tax Savings for Seniors, Sponsored by the California Association of Realtors$6,700,050.00$504,825.08$5,638,643.76
Total$6,700,050.00$504,825.08$5,638,643.76
Totals in support
Total raised:$7,204,875.08
Total spent:$6,143,468.84

Donors

The following were the donors who contributed to the support committee as of May 12, 2018:[6]
DonorCashIn-kindTotal
California Association of Realtors Issues Mobilization PAC$3,700,000.00$504,825.08$4,204,825.08
National Associaton of Realtors$3,000,000.00$0.00$3,000,000.00

Background

Proposition 13 (1978)

See also: California Proposition 13, Tax Limitations Initiative (1978)
California Proposition 13, the Tax Limitations Initiative, was on the ballot for the election on June 6, 1978. Voters approved Proposition 13, with 64.79 percent voting for passage.[3][15] Howard Jarvis, who founded the Howard Jarvis Taxpayers Association, developed Proposition 13. He also worked with Paul Gann on writing the initiative.[16][17]
Proposition 13 required that properties be taxed at no more than 1 percent of their full cash value shown on the 1975-1976 assessment rolls and limited annual increases of assessed (taxable) value to the inflation rate or 2 percent, whichever was less. When a property is sold or transferred to new owners, however, the property is reassessed at 1 percent of its full cash value and the limit on increases to assessed value resets.[3]

Amendments to Proposition 13

The following ballot measures amended Proposition 13 to change who can transfer their home's taxable value and how the transfers work:
  • Proposition 58 (1986): Voters approved Proposition 58, which allowed the transfer of a principal residence between spouses or between parents and children without a reset on the home's taxable value. In other words, the recipient of a house, whether a spouse or a child, would continue to pay the taxable value based on the limit set following the 1975-1976 tax assessment.[4]
  • Proposition 60 (1986): Voters approved Proposition 60, which permitted homeowners over the age of 55 to transfer the taxable value of their present home to a replacement home, assuming the replacement home was of equal or lesser value, located within the same county, and purchased within two years of selling the original home.[4]
  • Proposition 90 (1988): The voter-approved Proposition 60 allowed qualified homeowners age 55 or older to transfer the current taxable value of their original home to a replacement home in another county, but only if the county in which the replacement home is located agrees to participate in the program.[5]

Proposition 90 tax transfers between counties

In 1988, voters approved Proposition 90, which allowed qualified homeowners age 55 or older to transfer the current taxable value of their original home to a replacement home in another county, but only if the county in which the replacement home is located agrees to participate in the program.[5]
As of 2018, 11 counties in California had adopted ordinances to accept the tax transfers of qualified homeowners age 55 or older from the other counties allowing tax transfers between counties. For example, a person age 55 or older who sold a house in Los Angeles County would be allowed to transfer their original home's taxable value to their new home in San Diego County, assuming the new home was of equal or lesser value than the original home.
The California Proposition 13 Tax Transfer Initiative (2018) would allow homebuyers who are age 55 or older or severely disabled to transfer their tax assessments between any counties, not just the counties adopting ordinances for the transfers.[1]
The following map illustrates which counties allow for tax transfers between each other, as of 2018:[18]

Media editorials

Other opinions

  • San Diego Union-Tribune (November 28, 2017) called for more thorough study on the initiative: "The Legislative Analyst’s Office warns that the measure could eventually lead to $2 billion or more in lost annual tax revenue. Realtors challenge this assertion and point to the new revenue that would come in as older homes worth $500,000 and more are finally taxed at their current value. This question needs more thorough study because the basic concept of the Realtors’ proposal makes considerable sense — at least if it can’t be readily gamed by wealthy people to limit their property taxes. Retirement security is a huge issue for millions of aging Californians on fixed incomes. Protecting this growing group is a good idea."[19]

Path to the ballot

See also: California signature requirements and Laws governing the initiative process in California

Process in California

In California, the number of signatures required for an initiated constitutional amendment is equal to 8 percent of the votes cast in the preceding gubernatorial election. Petitions are allowed to circulate for 180 days from the date the attorney general prepares the petition language. Signatures need to be certified at least 131 days before the general election. As the verification process can take multiple months, the secretary of state provides suggested deadlines for ballot initiatives.
The requirements to get indirect initiated state statutes certified for the 2018 ballot:
  • Signatures: 585,407 valid signatures are required.
  • Deadline: The deadline for signature verification is June 28, 2018. However, the suggested deadlines for turning in signatures was March 7, 2018, for initiatives needing a full check of signatures and April 24, 2018, for initiatives needing a random sample of signatures verified.
Signatures are first filed with local election officials, who determine the total number of signatures submitted. If the total number is equal to at least 100 percent of the required signatures, then local election officials perform a random check of signatures submitted in their counties. If the random sample estimates that more than 110 percent of the required number of signatures are valid, the initiative is eligible for the ballot. If the random sample estimates that between 95 and 110 percent of the required number of signatures are valid, a full check of signatures is done to determine the total number of valid signatures. If less than 95 percent are estimated to be valid, the initiative does not make the ballot.

Initiative #17-0013

Proponents filed three versions of the initiative: Initiative #17-0011, Initiative #17-0012, and Initiative #17-0013.[20]Initiatives #17-0011 and #17-0012 would have allowed homebuyers of all ages to blend the tax amount due on their old property and the tax amount due on their new property.[21][22]
Alex Creel, senior VP of governmental affairs for the California Association of Realtors, said the group would begin polling the three proposals and select one to collect signatures for at the group's meeting in San Diego in mid-October 2017.[23]The association selected Initiative #17-0013, rather than #17-0011A1 or #17-0012A1, to collect signatures for. Creel said the group would aim to collect around 1 million signatures and was willing to spend $20 million to $50 million on a campaign.[24]
Alexander Creel submitted a letter requesting a title and summary on July 20, 2017. A title and summary were issued by the California attorney general's office on September 25, 2017, allowing petitions to begin collecting signatures. By January 5, 2018, supporters of the initiative had collected 25 percent of the required signatures. On March 26, 2018, the support committee reported filing 960,361 signatures for the ballot initiative.[25] Counties had until May 17, 2018, to conduct a random sample of signatures.[26]
On May 17, 2018, the secretary of state's office announced that the random sample of signatures indicated that 731,019 signatures were valid—145,612 more than was required. As 960,361 signatures were filed, the validation rate was 78.92 percent.[27]

How to vote

See also: Voting in California

Poll times

All polls in California are open from 7:00 a.m. to 8:00 p.m. Pacific Time. An individual who is in line at the time polls close must be allowed to vote.ack[28]

Registration requirements

To vote in California, an individual must be U.S. citizen and California resident. A voter must be at least 18 years of age on Election Day. Conditional voter registration is available beginning 14 days before an election through Election Day.[29]
On October 10, 2015, California Governor Jerry Brown (D) signed into law Assembly Bill No. 1461, also known as the New Motor Voter Act. The legislation authorized automatic voter registration in California for any individuals who visit the Department of Motor Vehicles to acquire or renew a driver's license. The law was scheduled to take effect in 2016.[30][31]

Online registration

See also: Online voter registration
California has implemented an online voter registration system. Residents can register to vote by visiting this website.

Voter ID requirements

According to the Office of the California Secretary of State, "in most cases, California voters are not required to show identification at their polling place." A voter may be asked to provide identification at the polls if it is his or her first time voting (this requirement applies if the individual registered by mail without providing a driver's license number, state identification number, or the last four digits of a Social Security number). Acceptable forms of identification include driver's licenses, utility bills, or any document sent by a government agency. For a complete list of acceptable forms of identification, see this list.[32]

State profile

USA California location map.svg
This excerpt is reprinted here with the permission of the 2016 edition of the Almanac of American Politics and is up to date as of the publication date of that edition. All text is reproduced verbatim, though links have been added by Ballotpedia staff. To read the full chapter on California, click here.
Both sides of America's political divide have taken the opportunity to emphasize how different California is from the rest of the country. After the 2016 presidential election, supporters of Donald Trump complained that were it not for Hillary Clinton's margin of victory in California, Trump would have won the popular vote. For their part, California's Democratic politicians have taken a leading role in opposing Trump's vision for America; some Californians are even flirting with seceding from the union, though "Calexit" faces constitutional obstacles that make it highly improbable. Despite such antagonism, California and the United States need each other, even if it no longer seems like it.
Americans have long thought of California as the Golden State -- a distant and dreamy land initially, then as a shaper of culture and as a promised land for millions of Americans and immigrants for many decades. America's most populous state remains in many ways a great success story. But in ...(read more)
Demographic data for California
CaliforniaU.S.
Total population:38,993,940316,515,021
Land area (sq mi):155,7793,531,905
Gender
Female:50.3%50.8%
Race and ethnicity**
White:61.8%73.6%
Black/African American:5.9%12.6%
Asian:13.7%5.1%
Native American:0.7%0.8%
Pacific Islander:0.4%0.2%
Two or more:4.5%3%
Hispanic/Latino:38.4%17.1%
Education
High school graduation rate:81.8%86.7%
College graduation rate:31.4%29.8%
Income
Median household income:$61,818$53,889
Persons below poverty level:18.2%11.3%
Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015)
**Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here.

Presidential voting pattern

See also: Presidential voting trends in California
California voted for the Democratic candidate in all five presidential elections between 2000 and 2016.

More California coverage on Ballotpedia

See also

External links

Footnotes

  1. ↑ Jump up to:1.0 1.1 1.2 1.3 California Attorney General, "Initiative #17-0013," accessed July 24, 2017
  2. ↑ Jump up to:2.0 2.1 California Legislative Analyst, "Initiative #17-0013," accessed September 8, 2017
  3. ↑ Jump up to:3.0 3.1 3.2 UC-Hastings, "Voter Information Guide for 1978, Primary," accessed December 21, 2017
  4. ↑ Jump up to:4.0 4.1 4.2 UC-Hastings, "Voter Information Guide for 1986, General," accessed March 26, 2018
  5. ↑ Jump up to:5.0 5.1 5.2 UC-Hastings, "Voter Information Guide for 1988, General," accessed March 26, 2018
  6. ↑ Jump up to:6.0 6.1 6.2 6.3 6.4 6.5 Cal-Access, "Campaign Finance," accessed March 7, 2018
  7. ↑ Jump up to:7.0 7.1 7.2 California Secretary of State, "Initiatives and Referenda Cleared for Circulation," accessed March 6, 2017
  8. ↑ Jump up to:8.0 8.1 8.2 8.3 8.4 8.5 8.6 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  9. Jump up↑ The Union, "Realtors join forces with statewide tax basis portability effort," November 29, 2017
  10. Jump up↑ CNBC, "California measure could spur more seniors to sell homes, easing the state's housing crunch," March 26, 2018
  11. Jump up↑ California Chamber of Commerce, "CalChamber Announces Positions on Pending Initiative Proposals," March 14, 2018
  12. ↑ Jump up to:12.0 12.1 The Mercury News, "Giving Grandma a tax break to get more homes on the market: realtors’ Prop. 13 ballot proposal," December 11, 2017
  13. Jump up↑ Note: These totals include all contributions and may include in-kind donations as well as cash donations.
  14. Jump up↑ Note: This date is the most recent date on which Ballotpedia staff researched campaign finance data. The actual date through which this information is accurate depends on the campaign finance reporting requirements in this state.
  15. Jump up↑ California Tax Data, "What is Proposition 13?" accessed December 21, 2017
  16. Jump up↑ Time, "How California's Fiscal Woes Began: A Crisis 30 Years in the Making," July 1, 2009
  17. Jump up↑ New York Times, "The California Ballot Measure That Inspired a Tax Revolt," October 16, 2018
  18. Jump up↑ California State Board of Equalizers, "Exclusions from Reappraisal – Frequently Asked Questions," accessed March 26, 2018
  19. Jump up↑ San Diego Union-Tribune, "Should California make it easier for seniors to buy and sell homes?," November 28, 2017
  20. Jump up↑ Los Angeles Times, "For young California homeowners, a proposed 2018 initiative could make buying a new house a lot less expensive," July 20, 2017
  21. Jump up↑ California Attorney General, "Initiative #17-0011," accessed July 24, 2017
  22. Jump up↑ California Attorney General, "Initiative #17-0012," accessed July 24, 2017
  23. Jump up↑ The Sacramento Bee, "Own a home and looking to move? California Realtors want to get you a major tax break," September 28, 2017
  24. Jump up↑ The Orange County Register, "California Realtors launch ballot drive to expand Prop. 13 for senior homeowners," November 27, 2017
  25. Jump up↑ PR Newswire, "Signatures Submitted to Qualify November Ballot Measure That Provides Property Tax Fairness for California Seniors, Disabled, and Victims of Natural Disasters," March 26, 2018
  26. Jump up↑ California Secretary of State, "Ballot Measures," accessed May 22, 2017
  27. Jump up↑ California Secretary of State, "Final Random Sample," accessed May 17, 2018
  28. Jump up↑ California Secretary of State, "Section 2: Polling Place Hours," accessed January 21, 2015
  29. Jump up↑ California Secretary of State, "Voter Registration," accessed June 9, 2014
  30. Jump up↑ The Los Angeles Times, "Gov. Brown approves automatic voter registration for Californians," October 10, 2015
  31. Jump up↑ The Sacramento Bee, "California voter law could register millions–for a start," October 20, 2015
  32. Jump up↑ California Secretary of State, "Where and How to Vote," accessed August 30, 2016
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