Blog Taxation

Proposition 43: No

September 23, 2026

Max Dubler

by Max Dubler

Introduction

It should not take a supermajority of voters to raise revenues for local schools, infrastructure, and public safety.

Analysis

Background

Proposition 13, passed by voters in 1978, amended the state constitution to cap property tax rates at 1% of a property’s assessed value; limit annual increases in assessed value; require a ⅔ supermajority vote in the legislature to raise state taxes; and require a ⅔ voter approval for local “special taxes” earmarked for a specific purpose.

In 2017, the California Supreme Court ruled that the constitutional supermajority requirements were written to constrain governments, not the people’s initiative power, and that “special” taxes that have been proposed via citizen initiatives can pass with a standard 50%+1 majority.

In 2022, Los Angeles voters passed Measure ULA, which dramatically raised the transfer tax on real estate transactions over $5 million to up to 5.5%. Advertised to voters as a “mansion tax,” it has mostly affected the sales of apartment buildings and other commercial properties, leading to a very significant slowdown in large commercial property transactions and new housing construction. San Francisco and Santa Monica have also passed significant transfer tax increases, with similar negative effects for housing.

Earlier this year, The Howard Jarvis Taxpayers’ Association (HJTA), which sponsored Prop 13 back in 1978, collected signatures for a ballot measure that would do two things: restore the 66% supermajority requirement for special taxes and limit local transfer taxes to 0.055%. In June, the state legislature attempted to make a deal with the HJTA to keep this measure off the ballot by reforming transfer taxes, a laudable goal that we supported. That effort was not successful: negotiations broke down at the 11th hour. When the dust settled, a deal was struck to have the legislature put the voter threshold piece on the ballot by itself without the transfer tax reforms. That is Prop 43.

What does this do?

Raises the threshold for imposing, extending, or increasing voter-approved special taxes from 50%+1 to 66% and prohibits local governments from taxing real estate according to its value, except under narrow circumstances.

How will this affect housing?

Prop 43 will impact housing production by making it harder for local governments to raise revenue for housing-related purposes like infrastructure upgrades, affordable housing trust funds, and public transportation.

Passing Prop 43 would also give local governments an even stronger incentive to charge very high impact fees for new housing, which will increase the price of new homes and exacerbate the housing shortage.

Recommendation: No.

Kneecapping local governments’ ability to raise revenue is bad news for housing and infrastructure. Further, the HJTA should not be rewarded for using housing affordability as a Trojan horse to put unrelated tax cuts on the ballot.