In November 2020, voters narrowly approved Proposition 19, a measure that expanded the ability of eligible homeowners to move to a new home and transfer their property tax bill from the old home to the new one, avoiding a large tax increase. Prop. 19 also raised taxes, eliminating the longstanding constitutional provisions that enabled parents to transfer their home and a limited amount of other property to their children without triggering reassessment to current market value.
According to the fiscal impact statement put before voters, Prop. 19 could increase revenue by “tens of millions of dollars per year for both state and local governments,” and “most of this new state revenue would be spent on fire protection.”
California’s Department of Finance was directed by the measure to calculate annually, by September 1, the amount of money that the state controller would be required to transfer to the newly created California Fire Response Fund.
The first year’s calculation has now been completed. The amount of money that will be transferred to the California Fire Response Fund is: Zero.
Zero dollars have been generated by Proposition 19 for state firefighting efforts. Zero dollars also will be transferred to a second fund set up by Prop. 19, the County Revenue Protection Fund. That fund was intended to reimburse counties that had lower property tax revenues because of homeowners moving to a new county and bringing their lower tax bill with them.
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The Department of Finance informed legislative leaders that property tax collections were indeed higher. However, higher property taxes reduce the state’s revenue from income taxes because property tax payments are deductible. So on balance, “there were no additional revenues and no increased savings to the state from the implementation” of Proposition 19.
“Therefore,” the Department of Finance concluded in its certified calculation, “the Controller will not transfer any funds to the California Fire Response Fund or the County Revenue Protection Fund.”
Prop. 19 was sold to the voters with a costly campaign of ads that showcased firefighters and emphasized tax benefits for wildfire victims who lost their homes to disaster.
The California Association of Realtors, backers of Prop. 19, may have fooled some of the people some of the time, but they didn’t fool the accountants. The firefighters get nothing.