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California Proposition 19 (2020)

November 3, 2020 (2020-11-03)

Assembly Constitutional Amendment No. 11. Changes tax assessment transfers and inheritance rules
Results
Choice
Votes %
Yes 8,545,393 51.11%
No 8,175,618 48.89%

California Proposition 19 (2020), also referred to as Assembly Constitutional Amendment No. 11, is an amendment of the Constitution of California that was narrowly approved by voters in the general election on November 3, 2020, with just over 51% of the vote. [1] [2] The legislation increases the property tax burden on owners of inherited property to provide expanded property tax benefits to homeowners ages 55 years and older, disabled homeowners, and victims of natural disasters, and fund wildfire response. [3] According to the California Legislative Analyst, Proposition 19 is a large net tax increase "of hundreds of millions of dollars per year." [4]

According to the ballot summary, Proposition 19:

  • Allows homeowners who are over 55 years of age (without regard to wealth), disabled, or victims of natural disasters to transfer their existing property tax assessed value under 1978 California Proposition 13 to a replacement home, including a more expensive home.
  • Significantly limits the existing property tax benefits under Proposition 13 for certain real estate transfers between family members, such as the transfer of property from a parent to a child following the death of the parent.
  • Expands property tax benefits for family farm transfers.
  • Allocates net state (but not local) revenues and savings (if any) to wildfire response and for reimbursing local governments. However, because the COVID-19 pandemic has created significant uncertainty for the state budget, the Legislative Analyst believes that the vast majority of the wildfire funding will not be available until 2025 at the earliest. [5]

The proposition was sponsored and heavily promoted by the California Association of Realtors, and became effective on February 16, 2021. [6] [7]

Background

The California Association of Realtors previously sponsored and financed an initiative measure known as 2018 California Proposition 5 on the November 2018 ballot that would have further expanded Proposition 13 property tax breaks for certain homeowners (primarily homeowners over age 55) by allowing them to transfer their lower property tax base to replacement property. [8] That ballot measure failed statewide with 40% support, and also failed to receive majority support in all 58 California counties. [9] Proposition 5 opponents successfully argued that the initiative measure was a "huge tax break to wealthy Californians" and a "huge windfall to the real estate industry." [10]

In 2019, the California Association of Realtors sponsored and financed another initiative measure that would have expanded Proposition 13 property tax breaks for certain homeowners like the 2018 California Proposition 5 ballot measure. However, to generate a net increase in property tax revenue, the initiative also significantly narrowed Proposition 13 property tax reassessment exclusion rules for inherited properties and expanded the scope of business entity ownership changes that would result in commercial property reassessment under Proposition 13. [11] This initiative measure received sufficient signatures to qualify for the November 2020 ballot. [12]

Assembly Constitutional Amendment No. 11 (ACA 11)

As allowed under California law, [13] the California Association of Realtors negotiated with various special interests to secure legislative approval of an alternative constitutional amendment known as Assembly Constitutional Amendment No. 11 (ACA 11). [14] Proposition 19 was added to the ballot via ACA 11 which was authored by San Mateo Assemblymember Kevin Mullin. [15]

Significant controversy arose because the legislative approval of ACA 11 missed the regular legal deadline for placing measures on the November 2020 ballot, and the Legislature also had to enact a separate statute calling a special election for ACA 11 that was consolidated with the regular November 2020 election. [16] In response to the approval and qualification of ACA 11 for the November 2020 ballot, the California Association of Realtors withdrew its 2019 initiative measure that was previously eligible to appear on the November 2020 ballot. [17] The primary differences between Proposition 19 and the 2019 initiative measure withdrawn by the California Association of Realtors are that Proposition 19 excluded the expanded business entity ownership provisions that would have resulted in commercial property reassessment under Proposition 13 (to appease major business interests who did not like the business tax increase component of the 2019 initiative) and that Proposition 19 added the partial firefighting revenue provisions as a political sweetener (to appease firefighting organizations that previously opposed 2018 California Proposition 5). [18] [19]

Thus, compared to the 2019 initiative measure, Proposition 19 retained the expanded Proposition 13 property tax breaks for certain homeowners (primarily homeowners over age 55) like those contained in the defeated 2018 California Proposition 5 ballot measure, retained the property tax increase provisions by significantly narrowing Proposition 13 property tax reassessment exclusion rules for inherited properties, and added the partial firefighting revenue provisions as a political sweetener. [20]

Legislative Votes on ACA 11

In California, constitutional amendments proposed by the Legislature require approval from two-thirds of the membership of each house. [21]

The following are the votes by the Members of the California Legislature on ACA 11, along with how the voters within the corresponding legislative district subsequently voted on Proposition 19:

California Assembly

Assembly votes are from the California Assembly Daily Journal [22] and Proposition 19 outcomes are from the California Secretary of State. [23] The vote designation of "Abstain" is for those Legislators present on the day of the vote, [24] but who did not record a vote for or against ACA 11. The vote designation of "Absent" is for those Legislators who were absent on the day of the vote. Assembly districts are based on the applicable 2011 district.

District Last Name First Name Party ACA 11 Vote Prop 19 Outcome
04 Aguiar-Curry Cecilia Dem Yes Pass
31 Arambula Joaquin Dem Yes Pass
16 Bauer-Kahan Rebecca Dem Yes Pass
24 Berman Marc Dem Yes Pass
05 Bigelow Frank Rep Yes Fail
50 Bloom Richard Dem Abstain Fail
76 Boerner-Horvath Tasha Dem Abstain Pass
18 Bonta Rob Dem Yes Pass
73 Brough Bill Rep No Fail
62 Burke Autumn Dem Yes Pass
57 Calderon Ian Dem Yes Fail
51 Carrillo Wendy Dem Yes Fail
60 Cervantes Sabrina Dem Abstain Fail
49 Chau Ed Dem Yes Fail
55 Chen Phillip Rep Abstain Fail
17 Chiu David Dem Abstain Pass
68 Choi Steven Rep Abstain Fail
25 Chu Kansen Dem Yes Pass
08 Cooley Ken Dem No Fail
09 Cooper Jim Dem Yes Pass
35 Cunningham Jordan Rep Abstain Fail
01 Dahle Megan Rep Yes Fail
69 Daly Tom Dem Yes Pass
72 Diep Tyler Rep Absent Fail
13 Eggman Susan Dem Yes Pass
12 Flora Heath Rep Yes Fail
34 Fong Vince Rep No Fail
11 Frazier Jim Dem Absent Pass
43 Friedman Laura Dem Yes Fail
45 Gabriel Jesse Dem Yes Fail
03 Gallagher James Rep Yes Fail
58 Garcia Cristina Dem Yes Pass
56 Garcia Eduardo Dem Yes Pass
64 Gipson Mike Dem Yes Pass
78 Gloria Todd Dem Yes Pass
80 Gonzalez Lorena Dem Absent Pass
21 Gray Adam Dem Yes Pass
14 Grayson Tim Dem Yes Pass
41 Holden Chris Dem Yes Fail
44 Irwin Jacqui Dem Yes Pass
59 Jones-Sawyer Reggie Dem Yes Pass
27 Kalra Ash Dem Yes Pass
54 Kamlager-Dove Sydney Dem Yes Pass
06 Kiley Kevin Rep No Fail
36 Lackey Tom Rep Yes Fail
10 Levine Marc Dem No Pass
37 Limón Monique Dem Yes Fail
28 Low Evan Dem Yes Pass
77 Maienschein Brian Dem Yes Pass
26 Mathis Devon Rep Yes Fail
42 Mayes Chad Ind Yes Fail
07 McCarty Kevin Dem Yes Pass
61 Medina Jose Dem Yes Pass
22 Mullin Kevin Dem Yes Pass
66 Muratsuchi Al Dem Yes Fail
46 Nazarian Adrin Dem Abstain Pass
70 O'Donnell Patrick Dem Yes Fail
33 Obernolte Jay Rep Yes Fail
23 Patterson Jim Rep Abstain Fail
74 Petrie-Norris Cottie Dem Abstain Fail
20 Quirk Bill Dem Yes Pass
65 Quirk-Silva Sharon Dem Abstain Fail
40 Ramos James Dem Absent Pass
63 Rendon Anthony Dem Yes Pass
47 Reyes Eloise Dem Yes Pass
39 Rivas Luz Dem Yes Pass
30 Rivas Robert Dem Yes Pass
52 Rodriguez Freddie Dem Yes Pass
48 Rubio Blanca Dem Yes Fail
32 Salas Rudy Dem Abstain Fail
53 Santiago Miguel Dem Yes Pass
38 Smith Christy Dem Yes Fail
29 Stone Mark Dem Yes Pass
19 Ting Phil Dem Abstain Pass
67 Vacant Vacant Vac Vacant Fail
71 Voepel Randy Rep Yes Fail
75 Waldron Marie Rep Yes Fail
79 Weber Shirley Dem Yes Pass
15 Wicks Buffy Dem Yes Pass
02 Wood Jim Dem Abstain Pass
California Senate

Senate votes are from the California Senate Daily Journal [25] and Proposition 19 outcomes are from the California Secretary of State. [26] The vote designation of "Abstain" is for those Legislators present on the day of the vote, [27] but who did not record a vote for or against ACA 11. Senate districts are based on the applicable 2011 district.

District Last Name First Name Party ACA 11 Vote Prop 19 Outcome
26 Allen Ben Dem Abstain Fail
32 Archuleta Bob Dem Yes Fail
39 Atkins Toni Dem Yes Pass
36 Bates Patricia Rep No Fail
15 Beall Jim Dem Yes Pass
08 Borgeas Andreas Rep Abstain Fail
35 Bradford Steven Dem Yes Pass
12 Caballero Anna Dem Yes Pass
29 Chang Ling Ling Rep Abstain Fail
01 Dahl Brian Rep Yes Fail
03 Dodd Bill Dem Yes Pass
24 Durazo Maria Elena Dem Yes Pass
05 Galgiani Cathleen Dem Yes Pass
07 Glazer Steve Dem Yes Pass
33 Gonzalez Lena Dem Yes Pass
16 Grove Shannon Rep Abstain Fail
18 Hertzberg Robert Dem Yes Pass
13 Hill Jerry Dem Yes Pass
40 Hueso Ben Dem Yes Pass
14 Hurtado Melissa Dem Abstain Pass
19 Jackson Hannah-Beth Dem Yes Fail
38 Jones Brian Rep No Fail
20 Leyva Connie Dem Yes Pass
02 McGuire Mike Dem Yes Pass
28 Melendez Melissa Rep No Fail
30 Mitchell Holly Dem Yes Pass
17 Monning Bill Dem Yes Pass
37 Moorlach John Rep Abstain Fail
23 Morrell Mike Rep No Fail
04 Nielsen Jim Rep No Fail
06 Pan Richard Dem Yes Pass
25 Portantino Anthony Dem Yes Fail
31 Roth Richard Dem Yes Pass
22 Rubio Susan Dem Yes Fail
09 Skinner Nancy Dem Yes Pass
27 Stern Henry Dem Yes Fail
34 Umberg Tom Dem Yes Fail
10 Wieckowski Bob Dem Yes Pass
11 Wiener Scott Dem Yes Pass
21 Wilk Scott Rep Yes Fail

Real estate industry sponsor and prior history

The California Association of Realtors sponsored the Proposition 19 constitutional amendment, [28] with the expectation of deriving significant profits from many more home sales under the ballot measure, including from both the expanded tax benefit portability provisions and from the significant narrowing of the inheritance exclusion provisions which will force more home sales. [29] The president of the California Association of Realtors has denied that Proposition 19 is about making money for the Realtors. [30]

Racial equity issues

In analyzing the Proposition 19 ballot measure, a September 2020 report by the California Budget & Policy Center stated that: "Housing policy and tax policy have historically benefited white households most, including through policies with explicitly racist design and implementation that have blocked Black and brown Californians from homeownership opportunities. By directing additional tax benefits largely to white homeowners, Prop. 19 reinforces racial inequity within California's tax system." [31]

The Greenlining Institute has also criticized Proposition 19 for not helping "first-time homeowners who are disproportionately Black, Indigenous and people of color." [32]

Campaign controversy

It was reported [33] that the California Association of Realtors, the sponsor of Proposition 19, hired a former employee of a statewide taxpayer association for the sole purpose of using the former employer's job title to confuse voters to support Proposition 19. A radio ad was cited in the article as being deceptive because the former employee led listeners to believe he was advocating for the Proposition 19 tax increase in his capacity as the former legislative director of the statewide taxpayers association. The statewide taxpayers association received many calls from voters who said they were disgusted by the misleading radio ads and large direct mail pieces by the Yes on 19 campaign. The reporting article also cited a California Globe analysis that Proposition 19 is a billion dollar tax increase on California families and that Proposition 19 was in fact opposed by the statewide taxpayers association. [34]

Newspaper editorials

According to the California Initiative Editorial Scorecard, Proposition 19 was opposed by 16 major California newspapers and supported by 5 major California newspapers. [35]

The following major California newspapers opposed Proposition 19: [36]

Newspaper Position
Los Angeles Times Oppose
San Jose Mercury News Oppose
Orange County Register Oppose
East Bay Times Oppose
San Francisco Chronicle Oppose
The Press-Enterprise Oppose
San Gabriel Valley Tribune Oppose
The Daily Breeze Oppose
Los Angeles Daily News Oppose
The Santa Rosa Press Democrat Oppose
Long Beach Press-Telegram Oppose
Inland Valley Daily Bulletin Oppose
San Bernardino Sun Oppose
The Desert Sun Oppose
Chico Enterprise-Record Oppose
Bakersfield Californian Oppose

The following major California newspaper supported Proposition 19: [37]

Newspaper Position
San Diego Union-Tribune Support
Sacramento Bee Support
San Luis Obispo Tribune Support
Fresno Bee Support
Modesto Bee Support

Campaign contributions

According to campaign contribution data from the California Secretary of State, as of November 1, 2020, supporters of Proposition 19 raised $47.0 million, with $40.4 million from the California Association of Realtors and $4.9 million from the National Association of Realtors, for a combined total of $45.3 million (96.4% of all campaign contributions) coming from real estate interests. Opponents of Proposition 19 raised approximately $45,000. [38]

Polling

In order to pass, Proposition 19 needed simple majority (>50%) approval by the voters which it narrowly received.

Poll source Date(s)
administered
Sample
size [a]
Margin
of error
For Proposition 19 Against Proposition 19 Undecided
SurveyUSA September 26–28, 2020 588 (LV) ± 5.4% 56% 10% 34%

Notes

  1. ^ Key:
    A – all adults
    RV – registered voters
    LV – likely voters
    V – unclear

References

  1. ^ Alpert, Adrienne (September 29, 2020). "What is Prop.19? Measure would change several facets of property tax rules in California". ABC 7. Retrieved September 29, 2020.
  2. ^ "California voters approve Prop. 19, giving new property tax breaks to older homeowners". Los Angeles Times. 11 November 2020. Retrieved 24 November 2020.
  3. ^ "California Proposition 19, Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020)". Ballotpedia. Retrieved September 24, 2020.
  4. ^ Grimes, Katy (October 26, 2020). "Former CAGOP Chairman, Taxpayers Assoc. Employee Mislead Voters on Prop. 19". California Globe.
  5. ^ Dillon, Liam (October 19, 2020). "Who wins and who loses with California property tax measure Proposition 19". Los Angeles Times.
  6. ^ "Proposition 19 – Board of Equalization".
  7. ^ "A look at California's Real Estate Ballot Measures". 19 October 2020.
  8. ^ Changes Requirements for Certain Property Owners to Transfer Their Property Tax Base to Replacement Property. Initiative Constitutional Amendment and Statute. California Initiative AG No. 17-0013 Am. 1 (2017).
  9. ^ California Secretary of State, Statement of Vote November 6, 2018 General Election, pp. 95–97.
  10. ^ Ballot Pamphlet, California General Election (November 6, 2018), argument against Proposition 5, p. 39.
  11. ^ Changes Requirements For Transferring Property Tax Base To Replacement Property. Expands Business Property Reassessment. Initiative Constitutional Amendment. California Initiative AG No. 19-0003 (2019).
  12. ^ California Secretary of State AP 20:040, New Measure Eligible for California's November 2020 Ballot, April 23, 2020.
  13. ^ Cal. Elec. Code, § 9604.
  14. ^ Assem. Const. Amend. No. 11, Stats. 2020, res. ch. 31.
  15. ^ Campbell, Kelsey (August 5, 2020). "November 2020 Ballot Initiatives in California Aim to Change Policy on Commercial and Residential Properties". Briscoe Ivester & Bazel LLP.
  16. ^ Cal. Stats. 2020, Ch. 26, effective June 30, 2020.
  17. ^ California Secretary of State, Chief Counsel Letter Re Conditional Acceptance of Conditional Withdrawal of Initiative AG No. 19-0003, June 25, 2020.
  18. ^ Ballot Pamphlet, California General Election (November 6, 2018), argument against Proposition 5, p. 39.
  19. ^ Walters, Dan (September 30, 2020). "Proposition 19's tortuous journey to the ballot". Orange County Register.
  20. ^ Assem. Const. Amend. No. 11, Stats. 2020, res. ch. 31.
  21. ^ Cal. Const., art. XVIII, § 1.
  22. ^ California Legislature (2019-20 Regular Session), Assembly Daily Journal, June 26, 2020, p. 4978.
  23. ^ California Secretary of State, Supplement to the Statement of Vote November 3, 2020, pp. 185-192.
  24. ^ California Legislature (2019-20 Regular Session), Assembly Daily Journal, June 26, 2020, p. 4950.
  25. ^ California Legislature (2019-20 Regular Session), Senate Daily Journal, June 25, 2020, p. 3847.
  26. ^ California Secretary of State, Supplement to the Statement of Vote November 3, 2020, pp. 167-171.
  27. ^ California Legislature (2019-20 Regular Session), Senate Daily Journal, June 25, 2020, p. 3833.
  28. ^ Assem. Floor Analysis of Assem. Const. Amend. No. 11, Concurrence in Sen. Amendments, June 25, 2020, p. 4.
  29. ^ "Editorial: Prop. 19 perpetuates California property tax inequity". The Mercury News. August 1, 2020.
  30. ^ Dillon, Liam (October 19, 2020). "Who wins and who loses with California property tax measure Proposition 19". Los Angeles Times.
  31. ^ Kimberlin, Sara; Kitson, Kayla (September 2020). "Proposition 19: Creates a Complicated Property Tax Scheme and Reinforces Racial Inequities in California". California Budget & Policy Center. Retrieved 7 October 2020.
  32. ^ The Greenlining Institute, 2020 California Ballot Propositions Guide (Proposition 19) (September 16, 2020).
  33. ^ Grimes, Katy (October 26, 2020). "Former CAGOP Chairman, Taxpayers Assoc. Employee Mislead Voters on Prop. 19". California Globe.
  34. ^ Grimes, Katy (October 26, 2020). "Former CAGOP Chairman, Taxpayers Assoc. Employee Mislead Voters on Prop. 19". California Globe.
  35. ^ Rodota, Joe; Klink, Matt (October 14, 2020). "California Initiative Editorial Scorecard #3". Fox&Hounds. Retrieved 14 October 2020.
  36. ^ Rodota, Joe; Klink, Matt (October 14, 2020). "California Initiative Editorial Scorecard #3". Fox&Hounds. Retrieved 14 October 2020.
  37. ^ Rodota, Joe; Klink, Matt (October 14, 2020). "California Initiative Editorial Scorecard #3". Fox&Hounds. Retrieved 14 October 2020.
  38. ^ "Campaign Finance Power Search, Ballot Measures Advanced Search (November 3, 2020 Ballot Measures, Proposition 19)". California Secretary of State. November 1, 2020.