California Democrats have for years controlled every state constitutional office and held supermajorities in the Legislature. They also control the state’s major cities, so there’s been little to stop them from raising taxes early and often. That leaves the ballot as the only check, with California long overdue for another boisterous fight over the state’s counterproductively high tax rates. One is coming soon.
The Howard Jarvis Taxpayers Association, which is the protector of Proposition 13’s property-tax limitation legacy from 1978, is gathering signatures for a November 2026 measure. Dubbed the Local Taxpayer Protection Act, it would restore the statutory limitation of a 0.11% cap on transfer taxes on the sale of properties and require local special tax measures proposed by initiative to receive the same two-thirds vote for passage (rather than a simple majority) that is required if the identical measure is proposed by a city council or other government body.
Both limits are sensible given the way pro-tax forces have exploited loopholes that undermine Prop. 13’s designs. Transfer taxes were meant to be minimal, but HJTA notes that in the 1990s the courts allowed charter cities to obliterate the cap to boost their general fund — and in the city of Los Angeles, transfer taxes are now as high as 5.5%. This measure would sunset existing transfer taxes that top the original 0.11% limit. It would repeal LA’s “mansion tax” — the poster child for out-of-control local taxing since 2023.
The other loophole dates to a 2017 state Supreme Court decision, California Cannabis Coalition v. City of Upland. That ruling contained ambiguous language suggesting that taxes proposed by initiative might not have to meet the same constitutional requirements as taxes placed on the ballot by government bodies. Appellate courts have interpreted the Upland decision to allow initiative special tax increases to pass with a simple majority, and the Supreme Court has declined to hear appeals of those decisions.
It was easy to predict the results: Special-interest groups, especially unions, became the cat’s paw for local governments and placed initiative tax-increase measures on the ballot, evading the supermajority requirement. Per CalMatters: “Since then cities and counties have passed two dozen of these measures by margins of less than two-thirds.” California governments have never been known to let a tax-increasing opportunity go to waste.
Many observers note that LA’s mansion tax will be front and center in the coming campaign. As CalMatters added, advocates claim it has provided necessary homelessness funding, but one major study “found that property tax collections fall steeply as a result of the dramatic slow down in sales, off-setting an estimated 63% of the collected transfer tax revenue, if not significantly more.” So don’t get concerned when opponents predict doom and gloom.
LA’s Measure ULA also applies to commercial and apartment projects. Hence this sobering Los Angeles Times headline from October: “Almost no one is building new apartments in Los Angeles.” Especially following the wildfires, LA desperately needs new apartments. But builders can’t turn a profit and the mansion tax is a key reason.
Because of these loopholes, governments have been punishing property owners and making a mess out of the already troubled housing market. Past efforts to once-again control taxes in the spirit of Prop. 13 have run aground, but this measure raises hope that voters will finally rein in all the tax hiking. It’s time for another tax revolt. California lawmakers won’t restrain their worst instincts, so the state’s voters will have to do it for them.
