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California Ruling Could Make Tax Measures Easier To Pass

The California Supreme Court building in June 2013.

Credit: Steve Rhodes / Flickr

Above: The California Supreme Court building in June 2013.

California Ruling Could Speed Tax Measures To Ballot


Laura Fink, founder, Rebelle Communications

Tom Shepard, president, Tom Shepard & Associates


Some observers are warning of a flurry of new local taxes after the California Supreme Court limited a measure intended to constrain tax hikes, but legal experts say the justices' decision was narrowly focused and additional lawsuits will decide whether it also lowered the threshold to pass some tax increases.

In a 5-2 ruling on Monday, the state Supreme Court said general tax increases put on the ballot by citizens should go before voters at a special election. Only tax increases sought by local government are required to appear on a general election ballot, the majority said.

The ruling focused on a provision of Proposition 218, a 1996 ballot measure approved by voters that spelled out how local governments may levy new taxes. Another provision in the proposition requires a two-thirds vote to pass special taxes earmarked for specific purposes such as roads, schools or stadiums.

RELATED: San Diego Pension Reform Headed for California Supreme Court

Some observers say the court's decision could also limit the two-thirds requirement to cities and counties, allowing special tax measures proposed by citizens groups to pass with a simple majority.

In a dissenting opinion, Associate Justice Leondra Kruger said the ruling would limit Proposition 218 that way, and that was not the intent of the measure's backers.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, which sponsored the proposition, said the court's decision could "burn" taxpayers.

"Public agencies could easily deny taxpayers their rights by colluding with outside interests to propose taxes in the form of an initiative, then submitting a tax under a lower vote threshold than that currently mandated by the constitution," he said in a written statement.

He said it "may be necessary" to put another proposition before voters to close a "loophole" in Proposition 218 that the court had created.

Darien Shanske, a tax expert at the University of California, Davis School of Law, said the ruling won't be the final word on whether the two-thirds requirement applies to citizen-initiated special tax hikes. There will be additional lawsuits on that issue that could reach the California Supreme Court, he said.

"Some local group is going to do it," he said. "They are going to insist they are entitled to a majority vote."

Sen. Scott Wiener, a San Francisco Democrat who thinks cities have been hamstrung by Proposition 218, said while the case does not explicitly touch on the two-thirds vote requirement, it leaves the door open for communities to move toward a simple majority vote.

"Even if it takes another case to get there, it's moving in a positive direction," he said.

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