Proposition 90
On Tuesday September 25th, the Santa Clara County Board of Supervisors voted 5-0 (Alvarado, Gage, Kniss, McHugh, Yeager voting yes) to approve the recommendation from the Finance and Government Operations Committees directing that no more staff time be used towards the repeal of Proposition 90. Representatives from Santa Clara County Association of REALTORS® and the Silicon Valley AOR spoke at the Supervisors’ meeting and were successful in delivering the REALTOR® message.
In June, as part of the 2007-2008 budget process, the Santa Clara County Executive recommended that the Board of Supervisors rescind the County's acceptance of Proposition 90 transfers from across the state. SILVAR and SCCAOR REALTORS® took action and were successful in removing the recommendation from the budget. However, the recommendation was forwarded to two committees that reported back to the Board Supervisors on the 25th. The Board unanimously defeated the County Executive’s recommendation.
REALTORS® in Santa Clara County are thankful to Supervisors Liz Kniss, Pete McHugh and Ken Yeager for their leadership and support on this issue, since the recommendation was originally removed from the budget in June. In the end, a majority of the Supervisors understood the importance of preserving Prop 90 for Santa Clara County and believe it is an incentive worth keeping for seniors and severely disabled individuals who would like to move to Santa Clara County.
During the entire process, REALTORS® were the only organization advocating for the County to keep Prop 90. Research and arguments provided by REALTORS® exposed flaws in the figures used by the County to substantiate claims to repeal Prop 90. For example, the County did not take into account any of the positive economic multipliers that occur during a real estate transaction and assumed that Prop 90 buyers will live in their homes until the end of time. Without REALTOR action, Prop 90 would have most definitely been repealed.
In 1988, voters approved Prop 90, which is modeled after Proposition 60 to induce greater turnover of homes owned by senior citizens. The measure provides anyone over the age of 55 with relief from Proposition 13 (under Proposition 13, the value of a home for property tax purposes is re-assessed to market level whenever a change in ownership occurs) by allowing them to move from one county to another without undergoing a change in their basic property taxes. This exemption can only be used once and must only be used on a home purchase that is of equal or lesser value of the home the seniors are leaving.
Unlike Proposition 60, Prop 90 is a "local-option" law, which means each county has the option of participating. Proposition 60 was never on the table for removal, nor could it be, because it is protected and mandated by state law. If a county (like Santa Clara) adopts a Prop 90 ordinance, it can accept transfers of property tax base assessments from every California county. Whether or not that county the homeowner is moving from has a Prop 90 ordinance does not affect the eligibility of the homeowner to take advantage of the Santa Clara County ordinance. In California, the counties of Alameda, Los Angeles, Orange, San Diego, and San Mateo also accept Prop 90 transfers and, although only seven counties currently have local Prop 90 ordinances, over 56 percent of the state’s population lives in Prop 90 counties.