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Court of Appeal Rules Voter Initiatives for Special Taxes Are Not Subject to 2/3 Vote

By Vanessa Gonzales posted 07-07-2020 10:00 AM


Court_Rules_that_Special_Districts_May_Limit_Speaking_Time_at_Meetings.jpgIn a decision that may have statewide implications, the First District Court of Appeal confirmed last week that initiative measures brought forth by voters or local citizen groups are not subject to the same constitutional restrictions as special taxes placed on the ballot by local governments – specifically, the voter initiatives may pass with a simple majority vote rather than a two-thirds supermajority.

The decision by the three-judge appellate court panel in City and County of San Francisco v. All Persons Interested in the Matter of Proposition C is the first case to interpret a California Supreme Court ruling from 2017 to permit tax measures put on the ballot by citizens – not the governing body of a local agency – to pass with a simple majority. In 2017, CSDA first informed our members of the Supreme Court case, California Cannabis Coalition v. City of Upland, et al., which held that ballot initiatives generated by citizens are not subject to the same constraints faced by local governments through Proposition 218. Specifically, the Supreme Court in 2017 held that a voter initiative proposing a general tax can be presented to voters at a special election, even though Proposition 218 prohibits local governments from presenting a general tax to voters at a special election.

In this case, the City of San Francisco filed an action to validate Proposition C, which it describes as a voter initiative proposing to authorize the City to collect “additional business taxes” to be placed in a “dedicated fund” and used solely for specified homeless services, including housing programs, mental health services, prevention programs and hygiene programs. Proposition C qualified for the November 2018 ballot by gathering sufficient valid signatures from registered voters and subsequently received affirmative votes from 61.34% of voters who voted on the measure. In response to the City’s validation action, a group of Associations (California Business Properties Association, Howard Jarvis Taxpayers Association, and California Business Roundtable) filed an answer, alleging that Proposition C is invalid because it imposes a special tax approved by less than two-thirds of the voting electorate. The trial court granted judgment for the City.

Affirming the trial court, the Court of Appeal followed two California Supreme Court cases (including the aforementioned City of Upland case) interpreting language from Proposition 13 and Proposition 218 to construe “supermajority vote requirements that these propositions added to the state constitution as coexisting with, not displacing, the people’s power to enact initiatives by majority vote.” The court held that the supermajority vote requirements enshrined in Article XIII A, Section 4 and Article XIII C, Section 2 of the California Constitution “requires governmental entities to gain the approval of a supermajority of voters before imposing a special tax,” but does not repeal or otherwise abridge the people’s power to raise taxes by initiative, and to do so by majority vote.

The Associations opposed to Proposition C have indicated they intend to petition the California Supreme Court to review the decision. CSDA will continue to monitor the case inform our members of any important updates. For questions about the case or how it may impact your district, contact CSDA Deputy General Counsel Mustafa Hessabi at