California Proposition 13, Tax Limitations Initiative (June 1978)
| California Proposition 13 | |
|---|---|
 | |
| Election date June 6, 1978 | |
| Topic Taxes | |
Status Approved | |
| Type Constitutional amendment | Origin Citizens |
California Proposition 13, the Tax Limitations Initiative, was on the June 6, 1978 ballot in California as an initiated constitutional amendment. The measure was approved.
The ballot initiative was designed to:[1][2]
- require that properties be taxed at no more than 1 percent of their full cash value shown on the 1975-1976 assessment rolls and limit annual increases of assessed (taxable) value to the inflation rate or 2 percent, whichever was less.
- upon the transfer of properties, allow them to be reassessed at one percent of their sale price and reset the limit on annual increases of assessed value.
- prohibit the state legislature from enacting new taxes on the value or sale of properties.
- require a two-thirds vote of the state legislature to increase non-property taxes.
- require local governments to refer special taxes to the ballot and require a two-thirds vote of electors.
- make the state government responsible for distributing property tax revenue among local governments.
Howard Jarvis, who founded the Howard Jarvis Taxpayers Association, developed Proposition 13. He also worked with Paul Gann on the initiative.[3][4]
According to the organization California Tax Data, the property tax rate in the years prior to Proposition 13 averaged a little less than 3 of market value.[2]
Election results
| California Proposition 13 (1978) | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
| Yes | 4,280,689 | 64.79% | ||
| No | 2,326,167 | 35.21% | ||
Election results via: UC-Hastings
Text of measure
Ballot title
The ballot title was as follows:[1]
| “ | Tax Limitation—Initiative Constitutional Amendment.[5] | ” |
Ballot summary
The ballot summary was as follows:[1]
| “ | Limits ad valorem taxes on real property to 1% of value except to pay indebtedness previously approved by voters. Establishes 1975-76 assessed valuation base for property tax purposes. Limits annual increases in value. Provides for reassessment after sale, transfer, or construction. Requires 2/3 vote of Legislature to enact any change in state taxes designed to increase revenues. Prohibits imposition by state of new ad valorem, sales, or transaction taxes on real property. Authorizes imposition of special taxes by local government (except on real property) by 2/3 vote of qualified electors.[5] | ” |
Fiscal note
The fiscal impact statement was as follows:[1]
| “ | Commencing with fiscal year beginning July 1, 1978, would result in annual losses of local government property tax revenues (approximately $7 billion in 1978-79 fiscal year), reduction in annual state costs (approximately $600 million in 1978-79 fiscal year), and restriction on future ability of local governments to finance capital construction by sale of general obligation bonds.[5] | ” |
Constitutional changes
- See also: Article XIII A
The measure added Article XIII A to the California Constitution. The following text was added:[1]
Note: Hover over the text and scroll to see the full text.
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.
(b) The limitation provided for in subdivision (a) shall not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters prior to the time this section becomes effective.
Section 2.
(a) The full cash value means the County Assessors valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. All real property not already assessed up to the 1975-76 tax levels may be reassessed to reflect that valuation.
(b) The fair market value base may reflect from year to year the inflationary rate not to exceed two percent (2%) for any given year or reduction as shown in the consumer price index or comparable data for the area under taxing jurisdiction.
Section 3.
From and after the effective date of this article, any changes in State taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed.
Section 4.
Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district.
Section 5.
This article shall take effect for the tax year beginning on July 1 following the passage of this Amendment, except Section 3 which shall become effective upon the passage of this article.
Section 6.
If any section, part, clause, or phrase hereof is for any reason held to be invalid or unconstitutional, the remaining sections shall not be affected but will remain in full force and effect.[5]
Impact
Proposition 13 was the beginning of a period in state politics often referred to as the tax revolt.[6][7][8] Joel Fox, editor of Fox & Hounds, described Proposition 13 as the "Holy Grail of the tax revolt."[9]
Path to the ballot
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. To get an initiated constitutional amendment on the ballot in 1978, proponents needed to collect 449,846 valid signatures.[10]
Related measures
See also
- California 1978 ballot measures
- 1978 ballot measures
- List of California ballot measures
- Laws governing the initiative process in California
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 UC-Hastings, "Voter Information Guide for 1978, Primary," accessed December 21, 2017
- ↑ 2.0 2.1 California Tax Data, "What is Proposition 13?" accessed December 21, 2017
- ↑ Time, "How California's Fiscal Woes Began: A Crisis 30 Years in the Making," July 1, 2009
- ↑ New York Times, "The California Ballot Measure That Inspired a Tax Revolt," October 16, 2016
- ↑ 5.0 5.1 5.2 5.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid
<ref>tag; name "quotedisclaimer" defined multiple times with different content - ↑ Hoover Institute, "The Tax Revolt Turns 20," July 1, 1998
- ↑ Wall Stree Journal, "The Terms of Surrender in California’s Tax Revolt," October 26, 2016
- ↑ Retuers, "California's anti-tax crusaders talk revolt," April 7, 2009
- ↑ Los Angles Times, "Can Proposition 13 survive California's new appetite for taxes?" November 17, 2016
- ↑ The Rose Institute of State and Local Government, “A Study of California Initiatives: 1976-1986,” Spring 1988
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