What are Property taxes? Why do they matter?
Property taxes are taxes that all property owners pay yearly based on the value of their homes, businesses or land. The taxes are collected by local governments – counties, cities, school districts, and other special districts – to pay for the things we use every day. Our roads, parks, libraries, county health departments and schools are all partly funded through property taxes.
In the 1970s, property values begun rising quickly and property taxes climbed uncontrollably. Many homeowners feared that they would lose their homes because they couldn’t afford to pay the taxes. Voters passed Prop 13 in 1978 to protect those homeowners. The proposition capped property taxes and made new rules about when property values could be reassessed.
But there were three unintended consequences to Prop 13:
- It also applied to profitable corporations, creating a loophole that allows them to avoid paying their fair share of property taxes. In 1978 ½ of the revenue for local services came from homeowners, today homeowners pay for 70% of these services.
- Local cities and counties lost billions in revenue, which over the years has led to rising college fees and the closure of local clinics, libraries, and parks.
- It required a 2/3 vote by state and local governments to raise new revenue, forcing them to find other ways to raise the funds we need. To fill in the gaps in their budgets, they’ve relied on getting more money from you by increasing fees like parking tickets and moving in large chain stores to capture more of your hard earned money through sales taxes.
Closing one of the major loopholes created by Prop 13 – the loophole that applies the same cap on corporate property as homeowners – would raise an estimated $9 billion dollars a year for local government by 2020. This translates into millions of dollars for local cities and counties:
- Alameda – $369 million
- Fresno – $101 million
- Kern – $68 million
- Los Angeles – $2.9 billion
- Riverside – $227 million
- San Bernardino – $288 million
- San Diego – $803 million
- San Francisco – $691 million
- Santa Barbara – $109 million
- Santa Clara – $526 million
- Tulare – $34 million
- Ventura – $140 million
It’s time to make our property tax system fair. Are you ready to close corporate loopholes, protect homeowners and small businesses, and raise $9 billion a year for our communities? Click here.