Nearly forty years ago, on June 6, 1978, roughly two-thirds of California ‘s voters passed Proposition 13, to reduce property taxes by almost 57%. Based on this newly amended state constitution, property tax rates could not exceed 1% of the property’s market value, and re-evaluations of properties could not exceed 2% per annum unless the property was sold (HJTA, 2018).
Before Proposition 13, the tax rate throughout California was approximately 3% of the market value, and there were no limits placed on the increases to tax rates or property value assessments (HTJA, 2018). Due to Proposition 13, new home buyers could now be aware of what their property taxes would be and know the maximum amount they may increase, per year if he or she owns the property. Also, Proposition 13 enforced all state tax rate increases be approved by two-thirds vote of the legislature and that local tax rates be approved by a vote of the people (HJTA,2018). Solidifying the idea that, taxpayer protection is predicated on the people’s right to vote.
Paul Gann and Howard Jarvis hold up their hands in victory after Prop 13 passed in California in 1978.
Impact on Financing California Education
After the passage of Proposition 13, educational finance was re-vamped, with school districts receiving a portion of the property tax (through the AB 8 allocation formula) and direct payments from the state (Chapman, 1998, pg. 16). This had an impact on public education in California because school districts no longer depend on property tax to fund schools and instead rely heavily on state revenue. Nearly 100% of funding is covered through state aid (Concordia, 2018). Since 1978, school funding in California has gone from being one of the highest in the nation to one of the lowest. (HJTA, 2018). What that looks like in real time is our class sizes are amongst the largest anywhere, many extra-curriculum programs like music or electives have been cut or removed from schools entirely, and school funding per-pupil is relatively low compared to other states.
Chapman, J. I. (1998). Proposition 13: Some unintended consequences. Public Policy Institute of California.
Concordia University Irvine Online (2018). California’s Fiscal History in Education: Adequacy v.s. Equality: Video Module. Retrieved from http://resources.cui.edu/courses/edua558/modules/2/player.html
HJTA (2018). Proposition 13: A look back. Retrieved from https://www.hjta.org/propositions/proposition-13/proposition-13-look-back/