Three Proposed Changes to the State Constitution Would Have Major Impacts on California Taxpayers

Jeff Prang

By Los Angeles County Assessor Jeff Prang

As you might imagine, the public is often unaware of what exactly county assessors do and do not do. Besides assessing the value of all taxable property in their jurisdiction, among many other responsibilities, assessors commit research, time, and effort into making sure legislation, the very laws that affect taxpayers, are complete, accurate and ready to be implemented if approved.

Three pending measures that will have a significant impact on the public, and deserve to be carefully considered by voters, are: SCA 6, a modification to veteran exemption benefits; SCA 4, the restoration of the inheritance benefits that were slashed by Proposition 19; and ACA 11, the proposed elimination of the State Board of Equalization.

SCA 6 would allow a homeowner who receives the veterans’ exemption or the disabled veterans’ exemption to also receive the homeowners’ exemption simultaneously. Current law is very restrictive and allows a $4,000 reduction of the assessed value for a veteran discharged under honorable conditions if restrictive conditions are met. The better-known homeowners’ exemption reduces the assessed value of an individual’s primary residence by $7,000.

The homeowners’ and veterans’ exemptions were established in the 1970s when they represented real savings to homeowners, but they have not been adjusted since then and should be increased and brought into line with current economic values. If adopted, SCA 6 will allow qualified veterans to receive a $11,000 reduction in assessed value, regardless of the assessed value of their property. It is not much, but it is a start to acknowledge the service of our veterans.

SCA 4 would restore the protections for families to keep their family homes when their parents or grandparents die – bringing back provisions of Proposition 58 and Proposition 193 that were eliminated under Proposition 19, which became law in 2021.

Proposition 19 was approved by a narrow margin after a campaign that emphasized its benefits for seniors, wildfire victims, and disabled homeowners while completely avoiding the important family inheritance issue – a campaign that I believe was disingenuous.

Proposition 19 limited the transfer of family homes to the capped value of $1 million if a family member moves in and holds the house as primary residence for the remainder of their life. This cap effectively limited a vast majority of transfers of low assessed values on property and land in California and ensured that almost every home passed to a child from a deceased parent would be unaffordable due to its reevaluation of assessed value.

SCA 4 would give the public the opportunity to weigh in on this provision and the opportunity to restore Proposition 58 and Proposition 193 and the benefits these measures offered families. Otherwise, a significant number of family businesses and homes will continue to be lost due to unaffordable tax bills.

As an elected official with the primary responsibility for implementing Proposition 19, and having personally heard from thousands of property owners, I fully supported SCA 4 to undo the negative impacts caused by Proposition 19 on family inheritance. While the measure failed in committee, the Howard Jarvis Taxpayers Association has launched a ballot initiative for 2024.

ACA 11 is another constitutional amendment moving through the Legislature. If placed on the ballot by the Legislature and approved by voters, it will abolish the State Board of Equalization, the elected body that oversees county assessors, among many other responsibilities.

The BOE consists of five elected board members who oversee audits of county assessors on a regular basis and are responsible for ensuring the standardization of assessment practices throughout the state as well as coordinating policy, legislation, and administrative matters among the 58 assessment jurisdictions.

Property tax administration is extremely complex, with multiple state and local agencies having distinct responsibilities. The public is confused by the system and often frustrated when attempting to interface with any part of the system. The duly elected BOE members play a critical role in eliminating that public frustration by providing access to assistance via each board member’s office, and the BOE’s Taxpayers’ Rights Advocate Office.

In fact, I contend that if the BOE is eliminated and its duties turned over to another government department, such as the California Department of Tax and Fee Administration, the public may be subject to similar service frustrations that they encounter with other state agencies including the Department of Motor Vehicles (DMV) and the Employment Development Department (EDD). Property tax issues are much more complex than DMV or EDD issues and taxpayers need more hands-on assistance to resolve issues – assistance they currently receive from the BOE but likely will be reduced if the BOE is abolished.

Assessors also rely on the BOE to promulgate rules and regulations, interpretation of statues, legal opinions and annotations, and the standardization of policy and practices statewide. In addition, the BOE conducts surveys (audits) that are an important tool for ensuring statewide best practices. The relationship between the BOE and assessors is of vital importance to assessor operations. The ability to interface directly with the elected BOE members is vital to resolving taxpayer issues, as well as operational and policy concerns, in a timely manner. An unelected state agency is less likely to be as responsive to local officials and their priorities.

The BOE has been an effective agency for more than 100 years and continues to be. While there have been issues raised in recent years concerning some individual BOE members, it hardly seems reasonable to abolish a longstanding agency due to the impacts of a few temporary occupants of BOE seats.