Taxes on Rebuilding: Yes on 50

Proposition 50 on the June 3 ballot is a minor and benign amendment to Proposition 13, the property-tax-limitation initiative approved by California voters in 1978. If approved, it would allow a property owner whose home is destroyed or seriously damaged in a natural disaster to rebuild on another site without having to pay dramatically higher taxes. We recommend a Yes vote on Proposition 50.

Under Proposition 13, property taxes were rolled back to the 1975-76 level, and any future increases are strictly limited except in cases where a change in ownership has occurred, or when property is newly constructed on or otherwise substantially improved. Within months after Proposition 13 was passed, California voters approved a second initiative that exempted property owners hit by a natural disaster from having their property reassessed under the improvement clause--if they rebuilt on the same site. Proposition 50 would broaden this exemption so that such property owners could rebuild elsewhere in the same county.

County tax assessors, who first proposed Proposition 50 to the California Legislature, say that the number of property owners affected would be small, as would the proposition’s effect on the state’s revenues, because most homeowners choose to build on the same site after a disaster. But there are instances where rebuilding on the same site would be unwise, because the site itself may be prone to future disasters. In such cases, they argue, it is only fair to allow a property owner to move elsewhere in the same general area without penalty. We agree, and urge a Yes vote on Proposition 50.