HJTA Wins Court Victory Upholding Two-Thirds Vote for Special Taxes

In a victory for taxpayers, the Fresno Superior Court decided in favor of Howard Jarvis Taxpayers Association today (9/5), ruling that special taxes proposed by a voter initiative are not exempt from the state constitution’s two-thirds vote requirement.

At issue was Fresno’s Measure P, a sales tax initiative on the November 2018 ballot that proposed a 3/8 percent sales tax increase to provide extra funding for city parks, recreation, and after-school programs. The measure received 52% of the vote and was declared failed for lacking the two-thirds voter approval required by two constitutional amendments – Proposition 13 (1978) and Proposition 218 (1996).

The initiative proponents contested the declared outcome, which resulted in litigation. The proponents argued that the two-thirds vote requirement applies only to special taxes proposed by public agencies such as cities and counties; it does not apply to taxes proposed by a voter initiative. The City of Fresno took a position of neutrality.

Howard Jarvis Taxpayers Association intervened on the grounds that the interest of taxpayers was unrepresented in the litigation. HJTA then filed a motion for judgment on the pleadings, arguing that it would open a huge loophole in the two-thirds vote protection if taxes proposed by initiative were exempt.

Superior Court Judge Kimberly Gaab agreed in a 5-page decision explaining that the two-thirds vote requirement was not imposed on public agencies, but on the voters. Regardless of who authors the proposal, it must be submitted to the voters who must approve it by two-thirds, otherwise it is rejected.

This question about the vote requirement for tax initiatives arose from a ruling by the California Supreme Court in an unrelated 2017 case, California Cannabis Coalition v. City of Upland. In that case, the court ruled on the narrow technical question of whether initiatives had to be put before voters in the next general election or whether a special election could be required. The ruling that initiatives were exempt from the election timing requirement in the state constitution appeared to leave open the possibility that initiatives were exempt from the two-thirds vote requirement as well.

The issue is also being litigated in Oakland and San Francisco, where special tax initiatives resulted in lawsuits. In July, a San Francisco judge upheld the validity of a local special tax that had failed to secure two-thirds voter approval, ruling that tax initiatives needed only a simple majority to pass.

“We are delighted with the Fresno decision,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “Judge Gaab understood the issues and was not swayed by the judge in San Francisco.”

An appeal is expected.