Housing affordability problems are nothing new to Californians, and on June 6, 1978, Proposition 13, the product of the so-called tax revolt, was passed.

Prop. 13 came at a time when seniors were losing homes due to increasing property taxes. Today, we look at how the initiative changed the state and what could be in store for the future.

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WHAT’S NEXT?

Two initiatives to change Prop. 13 are gaining momentum.

1. Expanding Prop. 13 (November ballot)The California Proposition 13 Tax Transfer Initiative is supported by the California Association of Realtors and will be on the November ballot. The initiative would amend Prop. 13 to allow homebuyers 55 or older or severely disabled to transfer their property tax base to a replacement residence for any price, in any California county, as many times as they wish.The gist of it …

2. Retracting Prop. 13 (possibly 2020)An initiative called the California School & Local Communities Funding Act seeks to remove Prop. 13 tax limitations for commercial properties. The ACLU, The League of Women Voters of California and the California Federation of Teachers back the initiative and say it could raise $6 billion to $10 billion for schools and programs per year.

Prop. 13 basics

Lasting effect

The official name for the proposition was the People’s Initiative to Limit Property Taxation. One of the most immediate impacts of the legislation was decreasing property taxes to their 1975 level. This also decreased the amount of money going to the state.

Note: When not adjusted for inflation, property taxes rose to $10.3 billion in 1978, then fell to $4.9 billion after the passage of Prop. 13.

What made up the difference?Income, sales and other taxes increased revenues for the state budget. The state’s population increased from about 22 million people in 1978 to nearly 40 million in 2018.

Helping senior homeowners

One of the main goals of the legislation’s authors, Howard Jarvis and Paul Gann, was to decrease and stabilize property taxes for seniors living on fixed incomes.