California Ballot Propositions 5 & 6
By Ashlei Maihack
Follow Ashlei on Instagram and Snapchat, @ashleeeii3
PROP 5: CHANGING ELIGILBILITY REQUIREMENTS RE: PROPERTY TAX SAVINGS FOR HOMEOWNERS 55 YEARS AND OLDER (AS WELL AS DISABLED & DISASTER VICTIMS) IF THEY MOVE TO A DIFFERENT HOME
- YES: The property tax savings that are currently available to CERTAIN homeowners age 55 and older, as well as disabled & disaster victims), would be available to ALL who meet the requirements.
- NO: CERTAIN homeowners 55 years or older (or who meet the requirements) would continue to be eligible for property tax breaks.
- HOW DOES THIS IMPACT CALIFORNIA FINANCIALLY?:
- Property taxes are a part of the revenue that California depends on to fund other state programs, whether it is through direct funding or paying off bonds to investors (think Prop 1, Prop 3, & Prop 4). This is money that hits the California General Fund (the state’s checking account).
- Per the summary of the Legislative Analyst’s Estimate of Net State & Local Government Fiscal Impact, it was found that in the first few years, the state (who legally has to fund school’s if taxes don’t cover all costs) would be spending $100 million per year to fund schools. Over time, the tax revenue loss would increase and would result in about $1 billion per year to fund schools by the state. (NOTE: This is less than 1% of the state’s budget).
- Basically, the additional savings in property taxes (this is done by lifting limits & allowing all to be eligible if they meet the baseline requirements) = less money for state funding for schools, fire departments, & other state funded programs.
- CA.GOV FIGURES TO EXPLAIN PROP 5
- PRO: Voting “YES” on this measure would do a few things –
- This would keep people in California. There are approximately 85,000 homeowners 55 years & older in California. If this measure is passed, it would allow these 85,000 homeowners to stay in California as all of them would qualify for a tax savings. This is keeping homeowners in California and not pushing them out to other state’s.
- If it would increase the amount of homebuyers, it would likely also increase the number of taxpayers required to pay income tax on their home sales.
- CON: This would mean the state must initially pick up the slack, loss of property tax revenue that funds schools and other state programs.
PROP 6: REPEALING THE CURRENT CALIFORNIA GAS TAX & CAR REGISTRATION FEE INCREASES & WOULD REQUIRE VOTER APPROVAL FOR FUTURE INCREASES
- YES: This would eliminate the 2017 gas tax & car registration increases (this does not repeal the tax). The legislature would also need voter approval to increase future gas tax & car registration fees.
- NO: The 2017 gas tax & car registration increase would remain. The legislature would not need voter approval for any new or increased gas taxes & car registration fees, in the future.
- WHAT DOES THE GAS TAX & CAR REGISTRATION FEE INCREASE FUND RIGHT NOW?:
- These increases were made to provide funding for highway & road maintenance & repairs throughout the state of California. These increases also help fund transit programs!
- WILL THIS COST CALIFORNIA MORE MONEY?:
- If you vote “NO” you will be voting to allow the increases to continue. Any future changes made to the taxes/fees could be approved without voter approval (would just need 2/3 legislative vote).
- If you vote “YES” the gas tax & car registration fee increases would stop. This does not remove taxes, just stops the increase. Roads & highways would still need repairs as well as maintenance…California would just have to find another source of revenue.
- PRO: Gas taxes & car registration fee increases would be eliminated. The big pro would be the fact that voters are given the power & oversight to approve or deny any future increases.
- CON: This would eliminate money flow in California that supports our roads. The problem of road maintenance & repairs does not go away, it just goes unfunded.