Kumar’s Property Tax Proposal Faces Challenges
When Rishi Kumar, a former Saratoga City Councilman, ran for the position of Santa Clara County Assessor last year, he pledged to exempt homeowners aged 60 and older from property taxes. After a substantial loss in the runoff election to Neysa Frigor, he shifted his focus to a statewide initiative aimed at rallying voters around this promise. However, a recent analysis by the state paints a concerning picture of potential fiscal impacts, indicating the proposal could lead to substantial revenue losses for local governments—possibly amounting to billions.
The measure, which recently moved forward through a signature collection effort, seeks to exempt homeowners 60 years and older from property taxes if they have been living in their primary residence for at least five years or have lived in California for at least ten years. Kumar needs approximately 875,000 signatures by August 4 to place the measure on the November ballot.
Currently, California garners around $100 billion annually from property taxes, which support local services such as education, public safety, parks, and infrastructure. A fresh estimate from the nonpartisan Legislative Analysis Service suggests that Kumar’s exemption could decrease state revenue by between $12 billion and $20 billion each year from these critical sources.
“These revenue losses are expected to grow by 5 to 10 percent each year,” the memo revealed, highlighting that local governments and special districts would absorb half of the losses, while schools would bear the other half. Future ramifications could include increased financial pressure on the state to subsidize education due to this shortfall.
Kumar, who has branded himself a “proven tax warrior,” has not commented publicly despite several outreach attempts. He did acknowledge to Sacramento’s ABC-10 that some initial adjustments would be necessary to manage the revenue dip, but maintained that the long-term benefits would outweigh these initial challenges.
“People will spend that money in their communities, which is crucial,” he argued.
The taxation landscape in California shifted dramatically in 1978 with the passage of Proposition 13, which capped property tax rates at 1% of the assessed value upon purchase. This measure is often referred to as a politically sensitive issue in California.
Fiscal policy advisor Michael Coleman noted that Proposition 13 significantly reduced funds for both local and state governments, requiring the state to take on additional responsibilities in funding education to mitigate the impact on municipalities.
If Kumar’s proposal gains traction, similar challenges could arise. Coleman cautioned that without replacement revenue, the state might face increased pressure to implement other forms of taxation.
“Any tax increase in California has to go to a vote,” he stated. “It’s uncertain whether voters would support other tax increases just to provide benefits for seniors.”
The California Association of Counties, which advocates for the 58 counties in the state, refrained from taking a definitive stance on the proposal at this stage. However, CEO Graham Knauss expressed skepticism, calling it “not a serious proposal,” and warned that such a measure could strip critical funding for public safety, emergency services, and elections.
Nevertheless, Kumar has garnered early endorsements from several political figures, including former state Rep. Kangsen Chu and former Milpitas Mayor Jose Estevez, suggesting some initial backing for his initiative.
However, without substantial financial support, Kumar may face significant hurdles at the ballot box. Between 2016 and 2024, California led the nation in spending on petition drives, with successful efforts costing millions. As of now, Kumar has not disclosed funding details to the Property Tax Exemption Board.
