When former Saratoga Councilmember Rishi Kumar ran for Santa Clara County Assessor last year, he campaigned on the promise of exempting homeowners ages 60 and older from paying property taxes.
After he lost by a landslide to Neysa Fligor in the Dec. 30 runoff election, Kumar turned that pledge into a statewide ballot initiative campaign. But a new state analysis sheds a sobering reality on his idea, noting it could cause “major fiscal effects” for local governments — with revenue losses in the billions.
The proposed measure, which was cleared for signature-gathering earlier this month, would exempt homeowners 60 years of age and older from paying property taxes if they have occupied their home as their principal residence for at least five years or lived in California for10 years. Kumar will need 874,641 signatures by Aug. 4 to qualify the measure for the November ballot.
Property taxes currently raise about $100 billion annually statewide and are split among schools and local governments that use the money for services like police, parks, libraries and roads. A new estimate from the nonpartisan Legislative Analyst’s Office found that Kumar’s exemption could trigger the loss of $12 billion to $20 billion annually in these key revenues across the state.
“Over time, these revenue losses would grow by 5 to 10% per year,” the office’s memo said. “About half of the revenue losses would go to cities, counties and special districts. The other half would go to schools. In some years, the state could face additional cost pressures to provide money to schools to offset their revenue losses.”
Kumar, who has called himself a “proven tax fighter” in the past, did not respond to multiple requests for comment.
He acknowledged to ABC-10 in Sacramento that there will need to be a “little bit of adjustment” and “belt tightening” at the onset to account for lost revenues. However, he said the loss will ultimately be justified.
“When you look at money going back into the pockets of seniors, they’re going to spend it on the local economy,” he said.
California’s property tax landscape was massively reshaped in 1978 when voters passed Proposition 13 — a landmark initiative that capped the property tax rate at 1% of assessed value at the time of purchase. The measure has largely been considered the “third rail” of California politics.
Michael Coleman, a fiscal policy advisor and creator of the California Local Government Finance Almanac, said Prop. 13 was a “substantial hit” to both local governments and the state’s coffers. After the initiative passed, he said the state “had to shoulder more of the burden” in funding schools and help offset the impact that landed on cities and counties.
A similar scenario could play out if Kumar’s proposal is successful. If the state can’t backfill lost revenue, Coleman said there will be “greater pressure on other forms of taxes.”
“In California, any kind of a tax increase has to be approved by the people,” he said. “So would people want to increase some other kind of tax because they want to give a break to seniors? Hard to know.”
The California State Association of Counties, which represents the interests of the state’s 58 counties, said they only take positions on measures that have qualified for the ballot. But in a statement, CEO Graham Knaus expressed concern while also calling it “not a serious proposal.”
“You can’t cut billions and expect no consequences,” he said. “This ballot measure would obliterate county funding for emergency response, public safety, homelessness and elections.”
Kumar, however, has found some initial support for the measure, earning endorsements from former state Assemblymember Kansen Chu, former Milpitas Mayor Jose Esteves, former Monte Sereno mayors Liz Lawler and Rowen Turner and Milpitas Councilmember William Lam.
But getting the initiative on the ballot could still be an uphill battle if Kumar doesn’t have access to deep pockets.
Between 2016 and 2024, California saw the most spending on signature drives in the nation, according to Ballotpedia. During the 2024 election, the least expensive signature drive in the state that successfully qualified a measure on the ballot cost $7.4 million. The most expensive was nearly $10 million.
Kumar has yet to report any fundraising to his Property Tax Exemption committee.
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