Proposition 5, a state ballot measure is pitting powerful groups against each other in the Golden State. The argument advanced by the the California Association of Realtors is that empty-nesters feel trapped in oversize homes because their property taxes — relatively low if they’ve owned the home for decades — could rise substantially if they move. The new legislation is aimed at allowing older homeowners, the severely disabled, and disaster victims to sell their primary residence and transfer its property tax assessment to a replacement home, to avoid a tax hit. Opponents of the proposed law including unions representing teachers, firefighters, and government workers believe the law will rob schools of $100 million.
The Realtors association, which gathered enough signatures to place it on the ballot, and its national counterpart together have raised $13.2 million to support Prop. 5, according to an analysis by the secretary of state. It will lead to “more efficient use of our existing housing stock,” said Christopher Carlisle, a lobbyist for the association.
That far exceeds the $2.7 million raised by opponents, which include the California Association of Counties and unions representing teachers, firefighters, service and government workers. The Service Employees International Union called it “a boon to the real estate industry that comes at the cost of massive cuts to schools and local services communities value.”
The Legislative Analyst’s Office estimated that public schools and local governments each could lose more than $100 million annually in property taxes in the early years, growing over time to about $1 billion each per year. The state’s general fund would replace whatever revenue most school districts would lose under the proposition.
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