When former Saratoga Councilmember Rishi Kumar ran for Santa Clara County assessor final yr, he campaigned on the promise of exempting owners ages 60 and older from paying property taxes.
After he misplaced by a landslide to Neysa Fligor within the Dec. 30 runoff election, Kumar turned that pledge right into a statewide poll initiative marketing campaign. However a brand new state evaluation sheds a sobering actuality on his concept, noting it may trigger “main fiscal results” for native governments — with income losses within the billions.
The proposed measure, which was cleared for signature-gathering earlier this month, would exempt owners 60 years of age and older from paying property taxes if they’ve occupied their residence as their principal residence for a minimum of 5 years or lived in California for 10 years. Kumar will want 874,641 signatures by Aug. 4 to qualify the measure for the November poll.
Property taxes at the moment elevate about $100 billion yearly statewide and are cut up amongst colleges and native governments that use the cash for providers like police, parks, libraries and roads. A brand new estimate from the nonpartisan Legislative Analyst’s Workplace discovered that Kumar’s exemption would set off the lack of $12 billion to $20 billion yearly in these key revenues throughout the state.
“Over time, these income losses would develop by 5 to 10% per yr,” the workplace’s memo stated. “About half of the income losses would go to cities, counties and particular districts. The opposite half would go to varsities. In some years, the state may face further price pressures to offer cash to varsities to offset their income losses.”
Kumar, who has referred to as himself a “confirmed tax fighter” previously, didn’t reply to a number of requests for remark.
He acknowledged to ABC-10 in Sacramento that there’ll should be a “little little bit of adjustment” and “belt tightening” on the onset to account for misplaced revenues. Nevertheless, he stated the loss will finally be justified.
“While you have a look at cash going again into the pockets of seniors, they’re going to spend it on the native financial system,” he stated.
California’s property tax panorama was massively reshaped in 1978 when voters handed Proposition 13 — a landmark initiative that capped the property tax price at 1% of assessed worth on the time of buy. The measure has largely been thought of the “third rail” of California politics.
Michael Coleman, a fiscal coverage advisor and creator of the California Native Authorities Finance Almanac, stated Prop. 13 was a “substantial hit” to each native governments and the state’s coffers. After the initiative handed, he stated the state “needed to shoulder extra of the burden” in funding colleges and assist offset the impression that landed on cities and counties.
An identical state of affairs may play out if Kumar’s proposal is profitable. If the state can’t backfill misplaced income, Coleman stated there will likely be “larger strain on different types of taxes.”
“In California, any sort of a tax enhance must be permitted by the individuals,” he stated. “So would individuals need to enhance another sort of tax as a result of they need to give a break to seniors? Exhausting to know.”
The California State Affiliation of Counties, which represents the pursuits of the state’s 58 counties, stated they solely take positions on measures which have certified for the poll. However in an announcement, CEO Graham Knaus expressed concern whereas additionally calling it “not a severe proposal.”
“You’ll be able to’t lower billions and anticipate no penalties,” he stated. “This poll measure would obliterate county funding for emergency response, public security, homelessness and elections.”
Kumar, nevertheless, has discovered some preliminary assist for the measure, incomes endorsements from former state Assemblymember Kansen Chu, former Milpitas Mayor Jose Esteves, former Monte Sereno mayors Liz Lawler and Rowena Turner and Milpitas Councilmember William Lam.
However getting the initiative on the poll may nonetheless be an uphill battle if Kumar doesn’t have entry to deep pockets.
Between 2016 and 2024, California noticed probably the most spending on signature drives within the nation, in response to Ballotpedia. Throughout the 2024 election, the least costly signature drive within the state that efficiently certified a measure on the poll price $7.4 million. The costliest was almost $10 million.
Kumar has but to report any fundraising to his Property Tax Exemption committee.
