Different Value for Property of Equal Worth--Proposition 13’s ‘Irrational Tax World’


No one mindful of this nation’s colonial history can seriously question the right of the people to act to redress tax grievances. However, our citizens also have a right to be treated equally before the law. The right to equality of taxation is as basic to our democracy asis the right to representation in matters of taxation. Under Article XIIIA (Proposition 13) property taxpayers are not treated equally, and those sections which promote this disparity must fall.

Consider these facts. John and Mary Smith live next door to Tom and Sue Jones. Their houses and lots are identical with current market values of $80,000. The Smiths bought their home in January of 1975 when the market value was $40,000. The Joneses bought their home in 1977 when the market value was $60,000. In 1977, both homes were assessed at $60,000, and both couples paid the same amount of property tax. However, under Article XIIIA in 1978, the Joneses will pay 150% of the taxes that the Smiths will pay. Should a third couple buy the Smiths’ home in 1978, that couple would pay twice the taxes that the Smiths would have paid for the same home had they not sold it. Today, this court holds that such disparity is not only equitable, but that it does not violate the equal-protection clause of the Constitution.

The basic problem with this position is that it upholds the adoption of an assessment scheme that systematically assigns different values to property of equal worth. By pegging some assessments to the value of property at its date of purchase and other assessments to the value of property as of March 1, 1975, Article XIIIA creates an irrational tax world where people living in homes of identical value pay different property taxes. Thus, instead of establishing an assessment scheme with one basis by which all property owners are taxed, Article XIIIA utilizes two bases, acquisition date and 1975 market value, to impose artificial distinctions upon equally situated property owners.

Inequalities in state taxation have been held to be constitutional as long as they “rest upon some ground of difference having a fair and substantial relation to the object of legislation . . . .” However, even minimal scrutiny requires that the statutes of the Legislature and the initiatives of the people be defensible in terms of a shared public good, not merely in terms of the purposes of a special group or class of persons. The law should be something more than just the handmaiden of a special class; it must ultimately be the servant of justice.


Respondents fail to establish the general public benefit to be found in giving some, but not all, individuals a “rollback” to 1975 assessments. To be eligible forthe full “rollback,” Article XIIIA requires that an individual have owned continuously his or her property since a date prior to March of 1975. This requirement makes it literally impossible for persons purchasing property in 1978 or thereafter to qualify for benefits granted fully to pre-1975 owners (and less fully to pre-1975-78 owners). In so doing, Article XIIIA transgresses the constitutional guarantee of equal protection under the law.

The practical effect of Section 2(a) is to undervalue property purchased at an earlier date in comparison to the assessments assigned to subsequently purchased property. The extent of undervaluation will fluctuate with the degree of property value appreciation in aparticular locality. Given the “rollback” feature, the process inevitably starts by substantially undervaluing prior purchased property.

Once it is understood that Article XIIIA systematically imposes different assessments on property of similar worth, a long line of Supreme Court cases becomes relevant. Those cases support the proposition that a person is denied equal protection of the law when his property is assessed at a higher value than property of equal worth in the same locale.

Respondents would seek to deny that those who pay more for property are in reality “similarly situated” with those who paid less for property of the same value in earlier years. The premise of this argument is that the later purchaser is better able to afford a high tax since (1) he paid more for his property to begin with and (2) he knew from the beginning he was buying a highly assessed piece of property.

The fact that a purchaser presently pays $80,000 for a home which someone else bought for $40,000 in 1975 may tell us nothing more than that inflation has been rampant and property values on the rise. In fact, the higher mortgage payments that new homeowners pay as compared to earlier purchasers forewarns us against any cavalier assumption that later purchasers are able to bear heavier taxes.