00:00Today, I'm going to talk about a backroom deal in Sacramento that might actually save taxpayers
00:06money. California passed a constitutional amendment in 1978 called Proposition 13
00:11that limits property taxes. But over the decades, local governments have tested the boundaries of
00:17Proposition 13 by raising what they call transfer taxes. These are taxes on real estate when it
00:22changes hands. And some of these have gone out of control, like Measure ULA in Los Angeles,
00:28the so-called mansion tax, which doesn't just tax mansions. It also taxes commercial buildings and
00:33apartment buildings and actually slows down the expansion of housing instead of promoting it.
00:38So the Howard Jarvis Taxpayers Association, which exists to defend Proposition 13, went to court to
00:44argue that all these little taxes are unconstitutional. It didn't get much joy there from the left-leaning
00:50California courts, so it put an initiative on the November ballot to roll back these taxes and limit
00:56local government to charging a very low tax rate on real estate transactions. There was a big fight,
01:02and ultimately, the Howard Jarvis Taxpayers Association agreed to withdraw their ballot
01:07initiative in exchange for a new law that will require a two-thirds majority by any local vote
01:15to raise real estate transfer taxes rather than just a 50% majority. It's a potential win for
01:21taxpayers in the future. However, it will leave existing transfer taxes like Measure ULA, the
01:27mansion tax, in place. So Sacramento has somehow found a backroom deal that for once doesn't quite
01:34fleece taxpayers. Whether it works in the long run to ease the burden on property taxes and real estate
01:40transactions, we'll have to see.
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