YOUR QUESTIONS ANSWERED: How Much Money from Proposition 19 Has Gone to the California Fire Response Fund as Promised?

In 2020, voters were told that by passing Proposition 19, they would be ensuring that new revenues to the state would be directed into firefighting efforts. Prop. 19 created a new California Fire Response Fund. The measure said the Department of Finance would calculate, every year by September 1, the amount of money that the Controller would then transfer to the Fire Response Fund.

On August 30, 2024, for the third consecutive year, the amount was zero.

“Finance calculates that there were no additional revenues and no increased savings to the state from the implementation of [Proposition 19] in fiscal year 2023–24. Therefore, the Controller will not transfer any funds to the California Fire Response Fund or the County Revenue Protection Fund, pursuant to Section 2.2(e),” wrote Department of Finance Director Joe Stephenshaw in a letter to the legislature.

Proposition 19 was the biggest property tax increase in state history. Specifically, it raised taxes on properties that were passed between parents and children, requiring that these often long-held properties be reassessed to market value when transferred, with only narrow and limited exceptions.

Proposition 19 has devastated families that had carefully planned for the transfer of properties that would provide a place to live for a family member, or much needed rental income. Small business properties, from duplexes to auto repair shops, have been hit with massive tax increases upon the death of a parent who hoped to pass those businesses to the next generation.

What happened to the money from those tax increases?

While some counties may have see an increase in revenue, the Department of Finance says the state has seen nothing. One reason cited: Property taxes are deductible on state income tax returns. That means the higher property tax bills result in lower income tax payments.

And that’s how Proposition 19 has utterly failed to do what voters were promised: provide money for state firefighting efforts. The total transferred to the California Fire Response Fund was zero in 2021–22, zero in 2022–23, and zero in 2023–24.

For the same reasons, Proposition 19 also failed to generate revenue for the County Revenue Protection Fund, which was supposed to compensate counties that saw a decline in property tax revenue because of the provision in Prop. 19 that allows seniors and other qualified homeowners to transfer their low base-year value from a home in another county to a new home.

Although the base-year transfer provision in Proposition 19 was beneficial to California homeowners and HJTA supported it, the loss of the parent-child transfer exemption has been viciously destructive for the hard-working families that painstakingly put their savings into real estate and began to build generational wealth for the first time.

Because of the sky-high property tax increases on long-held family property when it is reassessed to current market value, children who inherit property often are unable to pay the taxes required by Prop. 19 in order to keep it. They are taxed out of their property, forced to sell.

Sadly, the cash from the sale quickly loses value to inflation. The property appreciates, but somebody else owns it.

To fix this horrendous situation for California families, a state constitutional amendment is required. There are two ways to put a constitutional amendment on the ballot: The legislature can pass it with a two-thirds vote, or citizens can collect about a million signatures on an initiative petition. Once on the ballot, a constitutional amendment needs a simple majority, 50%-plus-one-vote, to pass.

HJTA has tried twice to collect enough signatures to put the Repeal the Death Tax amendment on the ballot. The law allows only a very limited amount of time to collect signatures once an initiative is filed. Paid signature-gathering is possible, but prohibitively expensive.

HJTA is asking supporters of the Repeal the Death Tax effort to go online to RepealtheDeathTax.com and sign up for updates. That’s how we’ll know how many people would like to receive a petition to sign. When we reach a number that makes it clear we can succeed, we can try again.

In the meantime, supporters can contact their elected representatives and urge them to reverse the “death tax” provisions in Prop. 19 that require reassessment of inherited homes, rental units and small business properties. Tell them why it matters to your family. Remind them that it was the legislature that created the parent-child transfer exclusion in 1986 and put it on the ballot by a unanimous vote, where it went on to pass with 75% voter approval. This is an issue that matters to tens of millions of Californians.

If you write a letter, consider sending a copy to the “Letters to the Editor” section of your local newspaper.

You can look up the names and contact information of your state representatives at findyourrep.legislature.ca.gov.