Propositions 5 and 6 — Bad Ideas for California and Counties
Every year there are a couple of major issues that pose a distinct threat to the critical services counties provide to our citizens. Sometimes it’s legislation or new regulations. Other times, it’s state budget issues. This year there are two initiatives on the November ballot, Propositions 5 and 6, which threaten our ability to serve our residents and could pose significant problems for local governments.
Proposition 5 would greatly expand the portability of the property tax base under Proposition 13. You probably don’t need a history lesson on Prop. 13, but it allows people to pay property taxes based on what they paid for their home, as opposed to what it’s worth in today’s market. That old number is called the property tax “base,” or sometimes “basis.”
Prop. 13 has been amended several times since it was passed in 1978. One change allows you to sell your house and transfer the old (lower) property tax basis to a new house if you’re older than 55 or have a disability. All counties have to allow this portability if the sale and new purchase are both in the same county. Some counties also allow tax bills to cross county lines through a vote by their Board of Supervisors (known as the “Prop 90” allowance). Less than a dozen counties have a Prop 90 allowance and each County’s circumstances are different. In fact, El Dorado County is ending their Property Tax Portability program for tax bills from other counties because it cost over half a million dollars in reduced property tax revenue annually.
And that’s the real problem with Proposition 5. It would make property tax portability across county lines mandatory for all counties. It allows this to happen as many times as the eligible homeowners want and the home value is irrelevant. There is no cap on the person’s income or the price of the home. It is sponsored by the California Realtors Association which is simply trying to create more “churn” in the housing market.
Don’t believe their affordable housing hype – Prop 5 doesn’t create more housing and it doesn’t make housing more affordable. In fact, it could price families wanting to buy a home out of the market. It means more commissions for real estate agents and less revenue for schools and local government.
The non-partisan Legislative Analyst’s Office estimates it will initially cost schools and local governments about $200 million per year. This loss will grow to more than $2 billion over time. There is no plan to replace those funds, so cities, counties and special districts would simply have to reduce services. That means fewer sheriff’s deputies, nurses, and firefighters. It means cutting the services that help people dealing with homelessness and mental illness. Simply, put it’s a bad idea!
And then we have Proposition 6, the measure that would repeal a significant portion of existing transportation funding – approximately $1.5 billion of which counties and cities receive annually and are actively putting to use to improve local streets, roads and bridges. Everybody agrees that fixing our roads and bridges before they deteriorate is a good idea. But if this measure passes thousands of state and local projects underway and in the pipeline will be delayed or have to shut down completely.
The proponents of Prop 6 are also trying to sell the public a bill of goods, saying these funds aren’t being used — and won’t be used in the future — for transportation. But the revenue is 100 percent protected by the state Constitution. It can only be used for transportation purposes. Counties, cities and the state are already using those funds to repair roads and bridges, make our highways safer, and make it easier to move and deliver the goods and services that keep our economy growing. You can see for yourself all the work being done and the more than 6,500 projects in the pipeline by visiting www.rebuildingca.ca.gov.
If Proposition 6 passes we will continue to have deteriorating roads and unsafe bridges. California can do better than that. We can maintain our infrastructure so it is safe, efficient, and keeps us moving forward. We can provide the services and programs that make our communities safer and more vibrant places to live. We can do these things, but we have to defeat propositions 5 and 6. I hope you’ll join me in that battle.