Prop 13 – An Analysis by Aaron Zapata, MBA (PLEASE COMMENT AND SHARE)
NOTE: Thank you to those that provided me more data for me to review. I’ve updated my video and posting to reflect this information.There are two votes taking place this year:
In March we are being asked to approve a $15 Billion Bond for our schools. In November we are being asked to create a split tax roll where Commercial and Industrial Properties would be taxed at current market values and on not on historical values with annual caps.
The 2020 Prop 13 ballot initiative in March, however, is not ONLY about raising money for California schools. Tucked inside the Prop is the ability for local districts to increase their borrowing by 40-60% over current limits. This is a significant change.
How does this affect you?
When local school districts and other government entities sell bonds they have to pay them back. They pay them back by tacking additional fees to your property tax bills. All property owners are affected by increased property tax bills when local bond measures like this one are approved.
The only reference to taxes in the Information Guide is on Page 11 where it says, “Bond repayment is guaranteed by the state’s general taxing power.” Apart from that, there is no indication that this vote is going to affect your property taxes.
Unfortunately, when the information guide talks about all the benefits but talks very little about the repayment, it should cause us to be concerned. We are creating an unsustainable burden on our property owners and the future generations who will have to repay this debt. Should this pass, the state will have $3.75 Billion in payments per year for school bonds.
The March vote on Prop 13, in my opinion, is an appetizer preceding the main meal coming in November when they seek to amend the original Prop 13 signed into law in 1978. You see if they increase the amount they can borrow now based on the assessed value of the properties it would be fitting to reassess all the commercial properties at higher values. March’s vote increases the limit for bond sales and the November vote, should it pass, will increase assessed values far beyond where they are now. Payments for those debts are passed on to you, the property owner.
Say NO in March to new debt. Say NO to out of control spending. In November say NO to a split tax roll.
CA State Budget