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Just when we California property owners thought we'd take a well-deserved breather during the holidays, major efforts are underway to repeal the landmark Proposition 13. As 2026 begins, court-created loopholes continue to allow tax increases that are directly contrary to the plain language of Prop. 13.

A brief history of Prop. 13
In June 1978, Prop. 13 passed with 65% of the vote. It was a necessary response to the skyrocketing property taxes during rampant inflation, fundamentally changing property taxation by capping the rate at 1% of assessed value and limiting annual increases to 2% until a change of ownership or new construction took place. Requiring a supermajority vote of two-thirds to pass any new local taxes or pass municipal bond offerings was a crucial component of the bill.

Prop. 13 workarounds and loopholes
To bypass Prop. 13's strict property tax limits, local politicians often increase non-property taxes and fees by placing "special taxes" on the ballot that require only a simple majority vote, a practice that has been legally contested. Prop. 13 requires local taxes to go on the ballot for voter approval. Special taxes for a dedicated purpose require a two-thirds vote (66.67%) to pass. But in 2017, California's Supreme Court suggested that a tax increase might only need 50.01% to pass if it was put on the ballot by a citizens' initiative.

Sign the petition to save Prop. 13
That's exactly what the Howard Jarvis Taxpayers Association did by sponsoring an initiative for 2026, the "Local Taxpayer Protection Act to Save Proposition 13." And they need our help to get it on the ballot.

A total of 875,000 valid signatures of registered California voters is needed by mid-February to place this measure on the November 2026 ballot. That means collecting a total of a million or more signatures to ensure that we have enough valid ones.

Because it's so important, we've included a copy of the SAVE PROP. 13 petition with this newsletter. For full instructions, go to www.SaveProp13.com. Please sign and mail the petition as soon as possible, and be sure to ask all eligible voters in your household to sign. If you witness a signature being executed, it is critical that you fill out and sign the Declaration of Circulator.

San Francisco parcel tax v. property tax
Speaking of ways to bypass Prop. 13, Mayor Lurie has proposed a parcel tax aimed at raising $187 million annually to help close SFMTA's (Muni) budget deficit and avoid service cuts, and would appear on the November 2026 ballot. But what exactly is a parcel tax? "Because of limitations on property tax revenue, many local governments in California levy a parcel tax. Like the property tax, a parcel tax is imposed on parcels of real property. Unlike the property tax, however, a parcel tax is not based on the value of real property. The simplest parcel tax is a flat tax, one that does not vary with the size, improvements, or use of a parcel," explains Professor Jon Sonstelie of UC Santa Barbara.

However, the Mayor's parcel tax is different, "using a progressive, square-footage–based approach, making it the first parcel tax of its kind in San Francisco. Smaller homes pay a modest flat fee while larger residential, multifamily, and commercial properties contribute proportionally more based on their size," states Julie Kirschbaum, SFMTA's Director of Transportation.

What about passthroughs?
In San Francisco, owners of rental property have had the ability to pass some of the expense associated with parcel tax hikes on to their renters by filing petitions with the Rent Board. These charges do not become part of the tenant's base rent and must be discontinued once the cost is recovered. But policymakers have not yet indicated whether such passthroughs will be allowed with the Muni parcel tax. One option being considered is allowing property owners to pass through the cost of the parcel tax to younger and middle-aged tenants, but not to those 65 years old and older.

In summary, our main goal is to get the "Local Taxpayer Protection Act to Save Proposition 13" on the ballot by signing the petition. Second, contact your district supervisor and demand that property owners be allowed to pass through the cost of this parcel tax to their renters.