Whether you know it or not, if you are a California voter, you have come into contact with Proposition 13.
As the postwar boom of housing in California began to slow in the 1970s, property values skyrocketed, more than doubling from 1975 to 1980. Under normal circumstances, this would be a goldmine for homeowners. However, with rising property values came rising property taxes.
To save the humble homeowner from an ever-increasing tax burden, Howard Jarvis championed the People’s Initiative to Limit Property Taxation, or Proposition 13. After an immensely popular campaign, the initiative was added to the constitution in 1978. Since then, California voters have been asked to amend Prop 13 dozens of times.
The initiative had three integral components: cap property taxes at 1 percent of the assessed value, limit inflation adjustments to only 2 percent increases, and require that properties only be reassessed after the sale or upgrade of the property. In theory, this policy is exactly in line with the “American Dream,” in which you own your property on the terms you bought it. In practice, Prop 13 shackled local governments.
The beauty of the property tax is its simplicity. If someone owns property in an area, they directly benefit from the local government. Therefore, a tax can be levied on that property to collect contributions from users of their programs and infrastructure. Across the United States, property taxes compose the vast majority of local collections, allowing cities, counties, and other local bodies to pay for schools, road maintenance, and emergency services. By freezing property taxes at the originally assessed value, local and state governments in California were forced to investigate other, sometimes more regressive, revenue streams.
In the two decades following Prop 13’s passage, distinct trends for cities and counties emerged. In the case of cities, the lost property tax revenue was replaced by a number of other sources, most importantly increased charges for city services and license fees. These fees, however, are often more regressive than the alternative. One might expect that a “good city” ought to have low-cost utilities, garbage collection, and other services. However, these services are not free. Prior to Prop 13, municipalities had two choices for covering costs: spread the burden across the entire population with property taxes, lowering average costs, or charge individual users, leading to more expensive city services. With their hands tied, cities were forced to choose the latter.
Because of the unique powers provided to cities in the California Constitution, they were able to maintain control over most of their revenue and decide how those dollars were spent. The opposite was true for counties.
Where cities raised niche taxes to cover losses, counties were left with little authority to do the same. In the two decades after 1978, county revenues from local taxes were cut by over half. In response, county services increased their rates, and reliance on the intergovernmental transfers spiked.
For school districts, this effect was magnified. Collapsing property tax revenue presented a crisis to public schools, requiring a state bailout in the form of Proposition 98. From these changes, school districts’ local control of funds fell from nearly half to less than one-third, with intergovernmental transfers, primarily state funds, making up the difference.
I am inclined to support this change. Local governments can be an incredibly strong force against progress, but Prop 13 was a sledgehammer when we needed a scalpel. Not only did Prop 13 relinquish local control to the state, but it raised the bar for entry to increase taxes.
Beside the specific changes to property taxation, Prop 13 required that any state or local tax pass with two-thirds of the legislature’s vote, and any local tax – the same that cities have come to rely on – pass with the same proportion of voters. This is an incredibly difficult bar to reach, even when ignoring that Californians typically oppose the idea of taxes. To get around this, citizens have exploited technicalities in the proposition.
One such loophole was cemented by California Cannabis Coalition v. City of Upland. In 2017, the California Cannabis Coalition sued the City of Upland regarding the treatment of a local initiative that would permit dispensaries in the city. The complication lay in the requirement that the dispensary pay a $75,000 fee, something the city defined as a “tax”, and therefore required the vote to be held during the next general election instead of a special election as requested by locals.
Through the appeals process, the California Supreme Court held that Prop 13’s provisions did not apply to local citizen initiatives, siding with the California Cannabis Coalition. In doing so, the Court provided a different avenue to raise taxes through one of California’s most democratic inventions, the citizen initiative. This ruling has since been used across the state, a high-profile example being the Connect Bay Area Transit Initiative, a Bay Area sales tax measure to fund local transit agencies. Because of the Upland loophole, this tax increase will only require a simple majority to pass instead of the normal two-thirds supermajority, which is especially relevant considering polling at time of introduction. Proponents of Prop 13, such as the Howard Jarvis Taxpayers Association (HJTA), are opposed to these uses of the democratic process.
The HJTA is putting forth an initiative to voters this November, the Save Proposition 13 Act of 2026, specifically to close the Upland loophole. In an effort to “protect [voters’] homes and businesses from excessive taxation,” this act aims to place the same restrictions that government-proposed taxes face onto citizen initiatives, thereby raising the threshold to pass from a majority to a two-thirds supermajority.
If the Save Proposition 13 Act of 2026 passes, the same loophole that has allowed cities to stay solvent through special taxes would be stripped from them, placing them at the mercy of Sacramento to afford basic services just as counties and school districts already are. It cannot be emphasized enough: Proposition 13 is unhealthy for the government’s financial condition, local home rule, and democracy. Californians ought to have the right to decide whether they want to pay for services instead of catering to business and landowning interests.
Featured Image Source: UCLA Digital Library