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On My Mind These Days

By Glenn Lambdin

Back to Glenn Lambdin main page

30 Years of Proposition 13 

June 6, 2008 marks the 30th anniversary of California’s Proposition 13, sometimes referred to as the “Jarvis's initiative” or the “People's Initiative to Limit Property Taxation.” Prop. 13 amended the state’s constitution so that real property tax rates could not exceed 1 percent of the property's market value and valuations couldn’t grow by more than 2% per annum unless the property was sold. It also established an acquisition-value assessment system that provided that property is to be assessed at its value when acquired through a change of ownership.


Now I know there are many that claim that Prop.13 was the ruin of California and cite it as the cause of everything from failed schools to the OJ Simpson Trial. Regardless of all of those arguments, I am a supporter of an acquisition-value assessment system and a Prop.13 fan. Besides, when it comes to tax revolts, I’m always onboard anyways.


More recently, I have been observing the negative effects of a property taxation system that does not utilize an acquisition-value assessment. Over the last few years, I’ve kept a curious eye on the Hawaiian real estate market. Hawaii does not recognize an acquisition-value assessment system and reassesses property every year. So, as property appreciates in value, the annual property tax will increase proportionately. Hawaiian realty has appreciated much along the same lines as property in Sierra Madre. What sold for $350,000 in 2002 now sells for $750,000. While it’s been a great way to generate tax revenues, I’ve sadly watched it become a financial death blow to many retired Hawaiian families. An all too familiar story is the one of the retired couple who bought their home in the sixties, worked hard all of their lives to support their families, and are now on fixed incomes. The home they bought for $12,000 in the sixties is now appraised at $700,000. Annual property taxes can now account for the majority of their income. Many retired couples are being forced to sell their homes, the very homes where they raised their children and grandchildren. What a tragedy.


I shudder to think what that type of property tax system would do to the senior population in Sierra Madre. About 23% of Sierra Madre’s population are seniors. Many are long time residents who raised their families here. These are the people that made this town what it is. Thank goodness the voters in 1978 passed Prop. 13.  


When it comes to property taxes, 13 is a lucky number.


Happy 30th Anniversary.

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