The Executive Summary:
Before Proposition 13, there were two major flaws in California's property
tax system:
1. Property taxes could be assessed by cities, counties and school boards.2.
Real property was assessed arbitrarily depending on skill, whims
and other factors.
The results weren't too surprising:
A. Cities, counties and school boards would determine how much they wanted
to spend, then would set property taxes to bring in that amount.B.
Assessors had wide discretion and some used it so indiscreetly they ended
up in prison.C. Gross disparities
in property tax resulted (e.g., one property assessed at 4.6%
another at 114% of its market value).D. Property taxes skyrocketed and assessors had
a field day when home prices shot up in the early 1970s. That
was only a paper increase in theoretical "net worth" -
home owners' incomes
did not double or triple to match. As a result, many homeowners -
especially those on fixed incomes and at the lower end of the economic
scale - had to sell their homes since they couldn't pay the taxes.
So on June 6, 1978, Proposition 13 was passed with a 65% to 35% vote. The
major
features are:
i) The property tax basis was changed from "assessed value" to "acquisition
value" and is readjusted when the property is sold.Continued on the next page Page 1 — Page 2
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