September 10, 2018
Prop. 5 could affect Sonoma city, school coffers
An initiative on the November ballot that would allow senior California homeowners to move and still get a property tax break could cause revenue to Sonoma Valley schools and the city of Sonoma, as well as schools and cities across the state, to drop significantly.
Experts say Proposition 5, proposed by the California Association of Realtors, could play out in different ways. However, if more and more homeowners over 55 moved to the Valley, bringing their lower taxes with them, revenue would stagnate or even drop – and 21 percent of the city’s general fund comes from property taxes.
Schools and other local governments each probably would lose over $100 million in annual property tax revenue in the first few years, growing over time to about $1 billion per year in today’s dollars, according to the state Legislative Analyst’s Office, a nonpartisan fiscal agency that has advised the state legislature for decades.
“Places like Sonoma are at a threat of having a freeze or even reduced property taxes if (the proposition) passes, because someone will bring a tax base with them that is lower than would have happened otherwise,” said Robert Eyler, a professor and chair of economics at Sonoma State University.