Court: Prop. 218 Restrictions Don’t Apply to Voter Initiatives on Local Taxes
(BayAreaNewsTalk.com) – The California Supreme Court made it easier today for voters to propose and approve local taxes through initiatives.
The court ruled in San Francisco by a 5-2 vote that a 1996 state constitutional amendment restricting local governments’ ability to enact taxes does not apply to voter initiatives proposing taxes.
Justice Mariano-Florentino Cuellar wrote that the amendment, approved by state voters as Proposition 218, “does not limit voters’ power to propose and adopt initiatives concerning taxation.”
Previous state high court decisions have said the initiative power is “one of the most precious rights of our democratic process” and should be interpreted broadly, Cuellar noted.
The court majority said voters are not the same as local governments, and because the amendment does not specifically refer to voter initiatives, it should not be interpreted to include them.
The panel ruled on a lawsuit filed by the California Cannabis Coalition against the city of Upland (San Bernardino County) in 2015.
The coalition was seeking a special election on an initiative that would have required the city to license up to three medical marijuana dispensaries and levy a $75,000 licensing and inspection fee on each one.
The city argued that the fee should be considered a tax, and that under the rules of Proposition 218, the public should vote on the initiative in a general election rather than a special election. The measure was put on the city ballot in the November 2016 general election and lost, with only 34 percent voter approval.
The state high court said the city should have held a special election in accordance with a state law providing for special elections for initiatives, and said that in the future, cities should hold special elections on such initiatives.
“We might have done better in a special election,” the coalition’s attorney, Roger Diamond said.
The court did not explicitly address whether voter initiatives are exempt from another Proposition 218 rule that requires that special taxes proposed by local governments must be approved by a two-thirds vote of the
Special taxes are those levied for a specific purpose, such as financing a stadium. General taxes go into a city’s general fund. Proposition 218 required a majority vote of the public for general taxes and two-thirds
approval for special taxes.
Both Diamond and Jonathan Coupal, a Howard Jarvis Taxpayers Foundation lawyer representing Upland, said the high court did not resolve the question of the vote needed on special-tax initiatives.
Coupal said, “The ruling was narrow, concerning the setting of an election date.
“But the implication was broader and more dangerous. It raises the question of what kinds of taxes can be added by initiatives,” he said.
Coupal said Proposition 218 was one of several ballot measures sponsored by the foundation to close alleged loopholes created by the courts following the passage of Proposition 13, a 1978 statewide initiative co-authored by Jarvis that capped property taxes.
State Sen. Scott Wiener, D-SF, disagreed with Diamond and Coupal, saying he believes the decision erases the two-thirds approval requirement for special-tax initiatives.
“The California Supreme Court just issued a profoundly important and positive ruling: going forward, when local communities place tax measures on the ballot via voter signature, the measures can pass with a simple
majority, rather than a two-thirds vote,” Wiener said in a statement.
“Communities will now have a much easier time funding schools, transportation, and other critical needs. The ruling begins to undo the damage that Prop 13 inflicted on basic government services,” he said.
Coupal said the Howard Jarvis Taxpayers Foundation may consider sponsoring a new initiative to counter the effects of today’s decision.
“It’s a never-ending dance,” Coupal said.