Proposition 5 on the Nov. 6 ballot would sharply expand the tax benefit for homeowners over 55 years old, the severely disabled and natural-disaster victims. According to findings of the state’s nonpartisan Legislative Analyst’s Office, it would also be a big drain on schools and local governments, which depend heavily on property tax revenue.
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- What your vote means:
- A YES vote on this measure means: All homeowners who are over 55 (or who meet other qualifications) would be eligible for property tax savings when they move to a different home.
- A NO vote on this measure means: Certain homeowners who are over 55 (or who meet other qualifications) would continue to be eligible for property tax savings when they move to a different home.
- Fiscal Impact
- Schools and other local governments each probably would lose over $100 million in annual property tax revenue in the first few years, growing over time to about $1 billion per year (in today’s dollars). Similar increase in state costs to backfill school property tax losses.
- Ballot impact data and vote text from the California Legislative Analyst’s Office
Under current law, seniors and near-seniors can transfer tax assessments if their new homes are worth the same or less than the ones they sell, and they can only do it only once. Also, counties can decide whether to accept out-of-county transfers; only 10 of 58 do.
The ballot measure would allow over-55 homeowners to transfer their assessments to any new home — no matter what it costs — anywhere in the state and as many times as they wish. It would also increase the tax break for homeowners who move to less expensive homes, like Campbell.
The Legislative Analyst’s Office concluded that schools and local governments would each probably lose more than $100 million in property tax revenue a year initially and that, over time, those losses would reach about $1 billion a year for each. About 85,000 homeowners over 55 who move every year without the tax break would pay much less.
2018 CALIFORNIA BALLOT PROPOSITIONSREAD MORE: Trap, Tag, Haze: New Efforts To Get Bears To Behave In Tahoe Area
- PROPOSITION 1
Authorizes Bonds to Fund Specified Housing Assistance Programs. Legislative Statute.
- PROPOSITION 2
Authorizes Bonds to Fund Existing Housing Program for Individuals With Mental Illness. Legislative Statute.
- PROPOSITION 3
Authorizes Bonds to Fund Projects for Water Supply and Quality, Watershed, Fish, Wildlife, Water Conveyance, and Groundwater Sustainability and Storage. Initiative Statute.
- PROPOSITION 4
Authorizes Bonds Funding Construction at Hospitals Providing Children’s Health Care. Initiative Statute.
- PROPOSITION 5
Changes Requirements for Certain Property Owners to Transfer Their Property Tax Base to Replacement Property. Initiative Constitutional Amendment and Statute.
- PROPOSITION 6
Eliminates Certain Road Repair and Transportation Funding. Requires Certain Fuel Taxes and Vehicle Fees Be Approved by the Electorate. Initiative Constitutional Amendment.
- PROPOSITION 7
Conforms California Daylight Saving Time to Federal Law. Allows Legislature to Change Daylight Saving Time Period. Legislative Statute.
- PROPOSITION 8
Regulates Amounts Outpatient Kidney Dialysis Clinics Charge for Dialysis Treatment. Initiative Statute.
- PROPOSITION 9
Removed from the ballot
- PROPOSITION 10
Expands Local Governments’ Authority to Enact Rent Control on Residential Property. Initiative Statute.
- PROPOSITION 11
Requires Private-sector Emergency Ambulance Employees to Remain on-call During Work Breaks. Eliminates Certain Employer Liability. Initiative Statute.
- PROPOSITION 12
Establishes New Standards for Confinement of Specified Farm Animals; Bans Sale of Noncomplying Products. Initiative Statute.
Supporters say passage will end a “moving penalty” on older people and encourage more to sell, helping alleviate California’s housing shortage. The Legislative Analyst’s Office estimates home sales would increase by tens of thousands a year.
The California Association of Realtors, the measure’s main proponent, funded a consultant’s report that contends Proposition 5 would have much less impact on state and local governments, resulting in annual losses of $120 million to annual gains of $200 million.
Opponents challenge the assertion that Proposition 5 will spur construction and warn about a hit to public services.
As a result of Proposition 13 passed in 1978, a home is typically taxed at 1.1 percent of the purchase price and increases no more than 2 percent a year. Prices have risen much more, sticking many homeowners with much higher taxes when they move.
Supporters raised $13.2 million as of Sept. 25, mostly from the Realtors, whose members would benefit from more sales commissions. Opponents raised $1.7 million, mostly from the Service Employees International Union and California Teachers Association.
The Realtors recently filed notice with authorities that it will try again on the November 2020 ballot. Chris Carlisle, its legislative advocate, said it was “just to signal to our opponent we are not going away. If we lose this time, we will be back in 2020.”MORE NEWS: While New California Stimulus Could Go Long Way For Some, Economist Says It May Bring No Benefits
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)