Two-Thirds Vote Needed for Some Local Taxes? Who Knows?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Does it take a two-thirds vote or a majority vote of the people to raise local taxes placed on the ballot via the initiative process? 

Answer: No one knows—yet. Like many policy debates, it will take a state Appeals Court or the California Supreme Court to decide.

Uncertainty already existed over the vote requirement for taxes placed on the ballot by initiative after a previous Supreme Court decision. A couple of recent lower court rulings have really muddled the issue. 

Last July, a court in San Francisco said the Supreme Court ruling in California Cannabis Coalition vs City of Upland, which declared that voter initiatives do not have to follow the same restrictions placed on governing bodies to determine when a tax measure can appear on the ballot, also means that a two-thirds vote requirement is not needed to pass initiatives that propose special taxes for specific purposes. There were two cases in San Francisco that Judge Ethan Schulman ruled on, one setting aside money for early education, the second collecting tax money to help with the homeless. Both gained a majority vote but both were short of a two-thirds vote. His decision supports the argument that vote requirements on tax measures placed on the ballot by local governments officials do not apply to initiatives.

Wait a minute, a Fresno court judge declared last week. A measure to raise sales taxes to be spent on parks, recreation and after school programs garnered 52%. Not enough, said Judge Kimberly Gaab, it needs a two-thirds vote. The voters are acting as the government when they vote on the tax raising initiative.

Confusion on local vote requirements on taxes is not new.

The two-thirds vote for local special taxes goes back to Proposition 13. The initiative required both a two-thirds vote to raise taxes in the legislature and a two-thirds vote to raise special taxes by local voters.  Special taxes was not defined in the ballot measure. San Francisco officials, looking to get out from under the new tax rules, filed a friendly lawsuit, City and County of San Francisco v. Farrell, against a city official to bring the issue before the courts.

The court ruling declared that special taxes were meant for specific purposes, but since general taxes were not mentioned in the initiative, no vote of the people was required for general taxes.

Prop 13 co-author Howard Jarvis said the intent of Proposition 13 was to protect taxpayers and a vote was required to pass any tax. Ultimately, he authored Proposition 62 on the 1986 ballot to re-affirm the two-thirds vote for special taxes while also writing into law a majority vote for general taxes. Prop 62 passed.

The direction Prop 62 set by statute was strengthened when voters a decade later passed Proposition 218, a constitutional amendment. It contained the same vote requirements as Proposition 62.

Then the Upland case brought confusion back to the vote requirement issue.

The lower court decisions will work their way up the ladder and probably will end up with the state Supreme Court which did not opine on the vote requirement on tax initiatives in the Upland case.

I’ve always thought the Supreme Court would have to revisit this issue and answer the question posed at the beginning of this column.

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