San Francisco Tests Supreme Court’s “Hole” In Prop 13 & 218 Restrictions On Local Tax Increases

Ambiguity in California Cannabis Coalition vs. City of Upland creates an opening for simple majority approvals

As I blogged in August, the California Supreme Court potentially “ripped a huge hole” in Prop 13 and 218, the two state constitutional initiatives that created a two-thirds majority requirement on local tax measures. In California Cannabis Coalition vs. City of Upland, the court held that “general taxes” initiated by citizens is not bound by Prop 218 requirements.

Although the facts and procedures in the original case were relatively narrow, the reasoning used by the court could mean that all citizen-initiated taxes now only require 50% + 1 voter approval, including special taxes like for transit or housing (i.e. for a specific purpose and not for general revenue for the government). CalMatters has a nice summary of the immediate legal and political situation that ensued from this decision.

And now here comes San Francisco to test that broad interpretation. The test begins with a recent ballot loss: citizen backers of a city measure to divert more than half of San Francisco’s hotel-tax revenue for arts programs and homeless family services lost last year, despite having a majority of voters in favor.  Instead, they couldn’t meet the Prop 218-required two-thirds threshold.

But based on a new legal opinion by City Attorney Dennis Herrera, these citizens can now try again and enact the measure with a simple majority vote. Herrera’s office informed the Elections Department that “the Court’s analysis and reasoning [in California Cannabis] also appear to apply to the two-thirds voting requirements for special taxes” like the one that lost last year.

But Herrera concedes that “future litigation, legislation, or a ballot measure to amend the State Constitution to address the California Cannabis decision may resolve this issue with more certainty.”

If this measure is eventually enacted by the voters with less than a two-thirds majority, Herrera may have just guaranteed that it becomes his predicted test case to resolve the issue once and for all.

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About Ethan

Ethan Elkind is the Director of the Climate Change and Business Program, with a joint appointment at UC Berkeley School of Law and UCLA School of Law. In this capacity, h…

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