PROPOSITION 13

Proposition 13 is a far-reaching referendum passed by the California voters in 1978. Called a tax revolt, the proposition put a limit on how quickly property taxes in California could grow. Taxpayers were having trouble paying taxes as their land values rose rapidly during the 1970s and cities, counties and other agencies each took a big bite. So Californians voted to limit their tax burden by placing a 1% per year maximum property tax.

Further, for tax purposes, the value of a piece of property could grow only 2% per year as long as the same owner owned it. As soon as the property was transferred, the property was re-valued to its current market value

Local governments found the limits gave them little room for growth in services, especially when cost of living inflation made the same service cost more to provide. Local governments, instead found they had to reduce services or find new sources of income. Many governments started adopting user fees so that those who made use of the services paid for them instead of taxpayers picking up the bill.