Three measures on the Nov. 8 general election ballot, Propositions 87, 90 and 93, ask voters to amend provisions of 1978’s Proposition 13, the landmark grass-roots initiative that overhauled property tax law and gave Californians their biggest tax break ever.
Proposition 87, which deals with redevelopment agencies, would correct what state tax officials believe is an inequity in the current property tax law.
Under a nearly 40-year-old law that preceded Proposition 13, cities are allowed to create redevelopment agencies for urban renewal. Any increase in property tax revenue within the redevelopment area automatically goes to the redevelopment agencies, rather than to the county or other local government agencies.
Then came Proposition 13, which, among other things, allowed local governments to raise property tax rates above the legal ceiling of 1% of assessed value if voters approve local general obligation bonds.
Creates a Problem
But that creates a problem because redevelopment agencies existing within cities that approve the bond measures would benefit by the increased property taxes. Under current law, the extra money raised by the local bonds goes to the redevelopment agency, not to pay off the bonds.
Proposition 87 corrects that and ensures that any property tax revenues resulting from a bond issue go to pay off the bond measure, and not to a redevelopment agency.
The measure is backed by the California School Boards Assn., the County Supervisors Assn. of California, the Community Redevelopment Agencies Assn. and the California Taxpayers Assn. It has no known opposition.
Proposition 90, backed by a coalition of real estate brokers, retired persons and lawmakers from both parties, would allow persons over 55 to transfer their low Proposition 13 tax rates from one county to another.
Keep Low Tax Rates
As it is now, property owners over 55 are allowed to keep their low tax rates if they move only within the same county. That benefit was approved by voters as Proposition 60 in 1986. If they move from one county to another, they are assessed at the going market value.
Proposition 13 froze assessed values at 1975-76 levels, allowing only for increases of up to 2% a year.
Proposition 90 gives counties the option of rejecting the measure. This provision was added to protect rural counties that may be the destination of many retirees. According to the state Senate Office of Research, some counties could suffer “heavy losses” if a large number of retirees move into their communities, because they could be taxed at a lower rate than the previous occupants of their homes.
Proposition 90 also requires implementing legislation by the Legislature if voters approve it.
There are several restrictions. Homeowners must purchase or build their replacement residences within two years. They must be of equal or lesser value than the original residences. The new benefit would not apply to homes built or purchased before the election.
Supporters of the measure include the American Assn. of Retired Persons and the California Board of Realtors, along with a dozen Democratic and Republican legislators.
Opponents of Proposition 90 include the California Taxpayers’ Assn., and San Francisco Grassroots.
The third property tax measure, Proposition 93, would eliminate the residency requirement for the $1,000 veterans’ property tax exemption.
Proposition 13 allowed veterans to claim a $1,000 exemption if they were an active or honorably discharged member of the armed forces and if they had entered the service from California or had been a resident on or before Nov. 3, 1964.
Supreme Court Decisions
Lawmakers drafted the new measure because of U.S. Supreme Court decisions striking down similar residency requirements in other states.
Taxpayers cannot claim the veterans’ exemption and the homeowners’ exemption on the same property, so most veterans use the military benefit on boats, airplanes and second homes. Statewide, the extra benefit would cost local governments about $50,000, according to an estimate by the legislative analyst.
There are no known opponents.