Legislature Holds Info Hearings on Two CSAC-Opposed Initiatives
June 14, 2018
As the November General Election nears, dozens of initiatives are vying for a spot on the ballot and the Legislature is ramping up its initiative hearings. As background, state law requires that the Legislature hold informational public hearings on any initiative that receives 25 percent of the required signatures, of which currently there are 14. The hearing docket this past week included two tax-related initiatives which CSAC opposes and which fueled very passionate debate.
The first measure is the “People’s Initiative to Protection Proposition 13 Savings”, sponsored by the California Association of Realtors. This measure would greatly expand the “portability” of base property taxes, meaning certain homeowners could apply their existing property tax bill to a new home of greater value, anywhere in the state.
Approximately 20 percent of county discretionary revenues comes from property taxes and the Legislative Analyst’s Office estimates this would reduce local government revenue by $150 million per year initially, growing to several billion dollars over time. CSAC opposes this measure also because of the loss of local control for individual counties to accept property tax bills from homeowners in other counties.
Currently, only 11 counties authorize these transfers and one county recently voted to end their intercounty program because of hundreds of thousands in lost property taxes for the county, cities and special districts. Legislators spoke passionately about the measure, saying it was false advertising to use the housing crisis as a need for the measures. Other legislators questioned the need for the bill beyond helping realtors sell more homes.
The second measure is the “Tax Fairness, Transparency and Accountability Act of 2018” sponsored by the California Business Roundtable. This measure would restrict the ability of local governments to generate new revenues by requiring a two-thirds vote of a local governing body to put a new tax or certain fees on the ballot, and also requires a super-majority of voters to approve such a measure.
It also creates onerous restrictions for fee approval and applies retroactively to any ballot measure before voters in 2018. The estimated local revenue loss from the retroactive provision alone is $280 million, and just for the June primary tax measures. Legislators expressed deep concern about undoing the will of the voters and noted that the “Tax Fairness, Transparency and Accountability Act” only requires a majority to pass and not the super-majority it would impose on future tax and fee measures.
Video recordings of the hearings are available on CalChannel Video on Demand by entering “Initiative Hearing” into the search function.