From what I understand, Prop 13 limits the assessment to the full cash value of the property when purchased. After purchase, the assessment can go up no more than 2% each and every year (compounded, if I understand correctly).
In addition to the basic property tax, the voters can vote for additional bonds, etc. to be used for local services. Theoretically, this puts revenues for expenditures in the taxpayers’ hands — which I think is 100% correct. If the public can be convinced that there is a REAL need for additional money for schools, infrastructure, etc., they can always vote that in.
FWIW, the confusion about Prop 13 might explain why so many people complain about it. In reality, Prop 13 is one of the best things that could have happened in CA. The history behind it is informative. For those who are new to California, price volatility is the norm here, and Prop 13 was overwhelmingly voted into law to protect people from being “taxed out of their homes” by speculators and housing bubbles.
I’ve always said that buyers should consider total PITI payments when buying. If enough buyers were smart enough to refrain from buying when prices were too high, they could stop complaining about the disparity between what old-timers pay and what new buyers pay. The buyers have no one to blame but themselves — for over-paying in the first place, IMHO.
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CALIFORNIA CONSTITUTION
ARTICLE 13A [TAX LIMITATION]
SEC. 2. (a) The “full cash value” means the county assessor’s
valuation of real property as shown on the 1975-76 tax bill under
“full cash value” or, thereafter, the appraised value of real
property when purchased, newly constructed, or a change in ownership
has occurred after the 1975 assessment.
