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California Commentary

The fiction of citizens' tax initiatives in California

By Jon Coupal

Most Californians, especially homeowners, know that Proposition 13 imposes limits on property taxes. But many are unfamiliar with other rights granted by Prop. 13, including the right to approve or reject other types of local taxes.

Before 1978, most local taxes and fees were simply imposed by the taxing authority. They decided how much of your money they needed, and you got the bill. But Howard Jarvis knew giving voters the right to vote on new and increased taxes was not enough. While everyone votes, not everyone pays the tax. That's especially true of taxes on property. He was also worried about special interests hijacking the process. That's why he required special taxes to not only go to a vote of the people but require a two-thirds vote of the electorate in order to pass.

That's the way it was for almost 40 years. Then came the Supreme Court's infamous decision in California Cannabis Coalition v. City of Upland that said the two-thirds vote requirement doesn't apply to citizen initiatives.

Ever since, we've seen the abuse you would expect. Special interests, pretending to be citizens groups, are writing themselves tax increases, putting them on the ballot and getting them passed with a simple majority. Measure ULA in Los Angeles is one of the most notorious examples of this. It put a massive tax on the sale of properties in the city valued over $5 million. The money is supposed to go to homeless services. Services that just happen to be provided by groups that put Measure ULA on the ballot in the first place.

But perhaps even more offensive is the rampant abuse of the Upland decision by local governments. There are numerous examples of local governments collaborating with their special interests allies to place citizen initiatives on the ballot. In some cases, local governments will go to all the effort of crafting the measure and then conveniently decide not to go forward, only for a special interest group to then take the measure to the ballot and qualify it at the lower voter threshold.

In one case, they went as far as to have a member of the city council file the initiative in their supposedly private capacity. If that sort of thing is allowed, when does a "citizen" initiative become a government initiative? Assembly Bill 1223 may give us an answer.

The Sacramento Transportation Authority was created in 1988 when Sacramento County voters approved Measure A, a half-cent sales tax for transportation improvements. In 2022, "citizens" placed another half-cent sales tax on the ballot. It failed by 55 percent.

It looks like STA is poised to try again but this time with help from the Legislature. AB 1223 would allow, among other things, for STA to impose a tax on a geographic area of its choosing in Sacramento County, avoiding areas where voters would oppose the tax. It would also specify a lot of government involvement in a potential citizens initiative.

Even the Senate Committee on Revenue and Taxation consultant thought this might be a bridge too far: "Should a tax be proposed by initiative, AB 1223 stretches this distinction by first having STA's board approve an ordinance and expenditure plan, then requiring the county board of supervisors and city council of each subject to the tax approves the expenditure plan, all before electors come forward and propose a tax by initiative. While voters ultimately must approve any tax, is it truly a voter initiative when several local agency governing boards approved its contents before voters decide?"

It's a good question and one that the courts may end up deciding.

Meanwhile, the Howard Jarvis Taxpayers Association is collecting signatures for an initiative that would entirely close the statewide loophole that allows special taxes to evade the two-thirds vote requirement. Voters can get the petition at SaveProp13.com.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

Contributions to PP13 are not tax deductible.

Paid for by Protect Prop. 13, a Project of the Howard Jarvis Taxpayers Association

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