Is Propostiion 13 in Trouble

O.K. our great State of California is broke and it seems next to impossible to get the politicians in Sacramento to balance our budget and bring our deficits down. You can ignore the problem if you choose to, but ignoring the fact that our State is out of money is not going to solve anything. It's like turning away before getting stuck with a needle... the needle's still coming.

Couple this with the fact that our State's bond rating the the worst in Union, and we are actually subsidizing our farmers to not grow food for export in order to protect a fresh water sardine, and I think it's pretty clear that our State is in peril and something needs to be done.

There is talk in all directions on how to solve this problem, but the golden goose that is on the mind of Sacramento's public officials is without a doubt Proposition 13.

Proposition 13, amended into the California Constitution in 1978 (by initiative) essentially limits the taxation of real property. Proposition 13 limits the amount of taxes levied against property to 1% and prohibits the state from raising the taxes more than 3% (based on and designed to match inflation) in any given year, and cannot reassess taxes unless the property is sold to a new owner or new construction is completed.

This law was designed to ensure older residents are not taxed out of their homes. Regardless, CA lawmakers are ogling over the possible revenue they could take in if this law was repealed. The question becomes - can they do it?

Considering the fact that it is a Constitutional amendment one would think it would be difficult to alter. This is not the case. It only takes a majority vote to amend the consitution by initiave... a scary thought considering lawmakers in Sacramento are scrambling to solve the budget issues.

What would a repeal of Proposition 13 do to our real estate market? It would send a shockwave through our State's economy. And although Sacramento might recieve more tax revenue from the change, the effect it would have on individuals would be devastating, especially to our older residents on fixed income that have owned their homes for long periods of time.

Regardless if they can ever get away with it now would be the time. With home values low due to recent depreciation and a suffering economy, a reassessment now would result in overall increases in property taxes across the State, but these changes would not be as large as they would be during the peak of real estate some 3 years ago. I am not arguing that Sacramento could sneak this buy taxpayers, and I think it would result in a large turnover in politicians; what I am saying is desperate times call for desperate measures and right now CA lawmakers are desperate.

Let me be clear I do not and would never support this, but it is something we all should be aware of, and fight against.