I can’t say I was surprised by San Francisco Superior Court Judge Ethan Schulman’s ruling that two San Francisco tax increases for special purposes were valid despite receiving less than a two-thirds vote. A tax dedicated for special purposes needs a two-thirds vote,  but a California Supreme Court decision in 2017 created confusion about the two-thirds vote requirement for taxes, opening the door for Shulman’s ruling.

At issue is whether a tax brought to voters via the initiative process faces the same hurdles as a tax placed on the ballot by a governing body. Let me borrow from a previous piece I wrote for the Los Angeles Times on this issue to provide background. 

The issue before the court in California Cannabis Coalition vs. City of Upland was whether a measure dealing with fees and taxes related to medical marijuana dispensaries could appear on a special election ballot when Proposition 218 expressly calls for tax measures to be voted on in general elections. However, in making its decision, the court potentially allowed for much more than changes in the timing of votes. It broadly declared that Proposition 218’s restrictions on taxation only applied to local governments. Initiatives brought by the people could therefore have a wider berth to impose taxes.

Immediately speculation arose that the ruling would allow local tax measures put on the ballot by initiative could pass with a majority vote. The California constitution two-thirds vote requirement amended by Proposition 13 and Proposition 218 speaks of cities, counties and special districts imposing taxes.

But, the justices of the Supreme Court did not specify that its ruling in Upland would deal with the tax vote.

Soon after the Upland decision, there was skepticism that the Supreme Court affected the voting requirement. As reported by Capitol Public Radio Michael Coleman, an advisor to the League of California Cities, wrote on Twitter. “Case did NOT concern voter thresholds. Vote requirements … remain pending a future case.”

 The attorney for the winning side in the Upland case likewise said he didn’t believe the vote requirement was affected.

But as Colman noted a future case would decide and it’s coming. Plaintiffs in the San Francisco cases are appealing Judge Schulman’s opinion. 

They point out that both Proposition 13 of 1978 and Proposition 218 of 1996 required that tax increases for special purposes need a two-thirds vote.  It is as simple as that – to raise a special tax get a two-thirds vote.

In a dissenting opinion in the Upland case, Justice Leondra R. Kruger found no distinction between a tax passed initiative or a tax passed by the government. 

“A tax passed by voter initiative, no less than a tax passed by vote of the city council, is a tax of the local government, to be collected by the local government, to raise revenue for the local government.”

Indeed, San Francisco government has been collecting the two taxes in question passed to enhance spending for early education and homelessness. San Francisco officials are holding the money until the courts gives a final approval to spend.

But that only happens once the state Supreme Court clears up the confusion over the two-thirds vote and tax initiatives. 

Another issue raised before Judge Schulman by an attorney for the Howard Jarvis Taxpayers Association is that the tax was engineered by local officials who were clearly behind it, first proposing it for the ballot as a government action, then directing it to the ballot via the initiative. When San Diego passed a pension reform through the initiative the courts struck it down saying San Diego’s mayor was the clear driver of the reform and the measure was not a true initiative.

Only the state Supreme Court can reconcile that decision with the San Francisco measures, and indeed put to rest the debate over the two-thirds vote on tax initiatives.

I described the situation a few months ago on this site in an article under a headline: Calling the Supreme Court—Tell Us What You were Thinking.

Now the court will have to do that.

(Disclosure, I was proponent of Proposition 218 on the 1996 ballot.)