According to CalMatters Housing, California voters will decide in November whether to pass Proposition 43, a measure that would make it harder to approve local tax increases by requiring a two-thirds vote for what are called special taxes. Special taxes are those where the revenue goes to a specific purpose rather than into a general fund that elected officials can spend however they see fit. This requirement has actually been in the state constitution since voters approved Proposition 13 back in 1978, but courts have muddied the waters over the years.
The problem, as CalMatters reports, started with a 2017 California Supreme Court decision in a case called California Cannabis Coalition v. City of Upland. That ruling created ambiguous language suggesting that if voters themselves put a tax increase on the ballot through a citizens' initiative petition, the constitutional two-thirds requirement might not apply. Lower courts ran with that interpretation, and suddenly special taxes that didn't meet the two-thirds threshold were being upheld if they came from citizen petitions rather than from city councils.
This distinction has become a workaround for tax increases across California. CalMatters notes that Los Angeles County's Measure A for homelessness and the city of Los Angeles's Measure ULA for housing both received voter approval for special taxes without reaching the two-thirds threshold. In San Francisco, similar measures approved by voters in 2018 for early childhood education and homelessness programs also fell short of two-thirds support but were upheld by courts. The CalMatters reporting explains that this loophole has essentially allowed special interest groups aligned with specific causes to collect petition signatures and get tax increases on ballots, sidestepping what voters originally intended as a constitutional protection.
According to CalMatters, the state has even pushed further by recently requiring the Fresno County Registrar of Voters to place a citizens' initiative sales tax increase on the ballot, overruling the county board's decision to delay it. The argument from those pushing Proposition 43 is straightforward: courts have invented an exception that doesn't exist in the actual constitutional language, and this amendment would restore what voters originally approved fifty years ago. General taxes that go into local government general funds would still only need a simple majority, but special taxes with dedicated purposes would require two-thirds approval again.
What I am seeing locally here in the Bay Area and throughout the East Bay is that this debate hits close to home for many of my clients. We have experienced numerous special tax measures in recent years, and the voters in our communities are rightfully paying attention to how these are being structured and approved. Whether Proposition 43 passes will affect how future local funding measures come to our area, and it's worth understanding that this really comes down to what voters originally intended back in 1978 versus what courts have allowed to happen since then.
