Why Prop 13 is Fair
To understand why Proposition 13 is fair, one must understand how it works. Proposition 13 curbs property taxes by restricting the maximum rate (1%) and, more important, by limiting increases in assessed valuation (2% annually). With the latter provision, it is easy to see how a home’s current value can greatly exceed it’s taxable value over a span of just a few years. The substantial difference between a property’s actual value and its taxable value disappears when the property changes hands. When this occurs, county assessors reassess the property at full market value. Thus, recent purchasers derive no immediate benefit from the limitation on annual increases in taxable value. Shortly after Proposition 13’s adoption by the voters in 1978, the California Supreme Court recognized its inherent fairness. Justice Frank K. Richardson, speaking for a nearly unanimous court, concluded that “an acquisition value system…may operate on a fairer basis than a current value approa