California 2020

In less than two months California will be voting on many things. As of this writing there are twelve statewide ballot measures. You’ve heard this before but I will reiterate now:

VOTE!

It is your RIGHT!

It is your RESPONSIBILITY!

You can find more information on the initiatives at the California Secretary of State site.

I haven’t yet had a chance to read them all and form an opinion. What I CAN tell you is on some of these just the title scares me. I will be reading through these and will post what Don Thinks for each of these as soon as possible.

Proposition 14:
AUTHORIZES BONDS TO CONTINUE FUNDING STEM CELL AND OTHER MEDICAL RESEARCH. INITIATIVE STATUTE.

Proposition 15:

INCREASES FUNDING FOR PUBLIC SCHOOLS, COMMUNITY COLLEGES, AND LOCAL GOVERNMENT SERVICES BY CHANGING TAX ASSESSMENT OF COMMERCIAL AND INDUSTRIAL PROPERTY. INITIATIVE CONSTITUTIONAL AMENDMENT.

Increases funding for K-12 public schools, community colleges, and local governments by requiring that commercial and industrial real property be taxed based on current market value. Exempts from this change: residential properties; agricultural properties; and owners of commercial and industrial properties with combined value of $3 million or less. Increased education funding will supplement existing school funding guarantees. Exempts small businesses from personal property tax; for other businesses, exempts $500,000 worth of personal property. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Net increase in annual property tax revenues of $7.5 billion to $12 billion in most years, depending on the strength of real estate markets. After backfilling state income tax losses related to the measure and paying for county administrative costs, the remaining $6.5 billion to $11.5 billion would be allocated to schools (40 percent) and other local governments (60 percent).

Proposition 16:
ACA 5 (Resolution Chapter 23), Weber. Government preferences

Proposition 17:
ACA 6 (Resolution Chapter 24), McCarty. Elections: disqualification of electors.

Proposition 18:
ACA 4 (Resolution Chapter 30), Mullin. Elections: voting age.

Proposition 19:

ACA 11 (Resolution Chapter 31), Mullin. The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act.

In my opinion it has a LOT of GOOD in it.  However, there are some not-so-obvious gotchas.

A lot of what’s in this proposition about helping victims of the fires or other natural disasters transfer the base value of their original residence to a replacement residence is already in place.  Propositions 60 & 90 from 2018 basically do this.  But 60 & 90 fall short in that they only apply to certain counties and are applicable to anyone over 55 years old or is a disabled veteran or a number of other criteria for eligibility.  Prop 19 adds being a victim of a natural disaster to the criteria for eligibility and makes it statewide instead of only if your county allows for it.  Personally, I agree with this part!

Next, it creates two funds that are intended to dedicate revenue for 1) Fire response and related costs and 2) Protect County Revenues, presumably due to wildfires or other natural disasters, although it does not state that explicitly.  I’m good with this part too.  Specific funds dedicated to certain tasks are easier to account for and as such tend to have a better chance of getting used as intended.

Those two new funds are funded directly from the California General Fund.  There’s a lot of text related to how to determine how much to transfer to each fund, eligibility of requirements for counties, when to distribute/reimburse, how often, what to do when there are insufficient funds and what is considered an EXCESS of funds that would then be transferred BACK to the General Fund.

This is where I have a couple of problems with it.

  1. This proposition does not explicitly indicate how this will be paid for.
  2. If you dig into it you will find that what they’re doing is defining that a primary home can be passed down from parents to children, or from grandparents to grandchildren if the parents have died, with limited tax increases.  That sounds pretty good, right?  But right now property as an inheritance can have their base value stepped-up to the current market value as of the date of death AND that doesn’t have to be a primary residence.  It also means if the a person wants to pass their home down to their kids when they die the kids better plan on living there because it needs to continue to be a primary residence for the family.

Yes, there are many wealthy people, including celebrities, investors and others that own multiple properties and do NOT pay higher taxes for a number of reasons. But there are also many smaller families that have worked hard over 60 or 70 years or more to put together some investment property so they could be financially self-sufficient in their old age and also continue to provide for their family after their death.

The wealthy and others will probably be fine. But the others, the seniors, the kids of those seniors, could be hit so hard by property tax increases that it could make it impossible for them to continue on.

If you’re in your 60’s or 70’s and bought your home 30, 40, or 50 years ago for, let’s say $50K and you intend to pass it down to your kids consider this; with SoCal prices the way they are your home could be worth over $1 Million. If your child is not planning to live in it they’re going to get a tax bill on that $950,000. Can the kids afford that? What would they do? Will they be able to keep the family home in the family?

We’re trying to help people who are displaced. But will how many people will be dispossessed of their family property in order to make this happen?

There has to be another way!

For Prop 19, my vote is a reluctant NO.

Proposition 20:

Restricts parole for Non-Violent Offenders. Authorizes felony sentences for certain offenses currently treated only as misdemeanors.

Proposition 21:
Expands Local Governments’ Authority To Enact Rent Control On Residential Property.

Proposition 22:
Changes Employment Classification Rules for App-Based Transportation and Delivery Drivers.

Proposition 23: Authorizes State Regulation of Kidney Dialysis Clinics. Establishes Minimum Staffing and Other Requirements.

Proposition 24:
Amends Consumer Privacy Laws.

Proposition 25:
Referendum to Overturn a 2018 law that replaced money bail system with a system based on public safety risk.