California may lower threshold for voter approval of local taxes

There are six bills before the California Legislature that seek to change the way local governments levy taxes.  Currently, the California Constitution states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C).  Proposition 13 of 1978 required a 2/3 vote of each house of the Legislature for state tax increases, and 2/3 vote of local voters for local special taxes.  Proposition 62 of 1986 prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes.  Proposition 218 of 1996 extended those vote thresholds to charter cities, and limited local agencies’ powers to levy new assessments, fees, and taxes.  Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing.

The California Senate Committee on Elections and Constitutional Amendments is considering the following four constitutional amendments to lower the threshold for voter approval of various local taxes from the current 2/3rd level to 55%:

  • Senate Constitutional Amendment 3 [“SCA 3”] was introduced by Senator Mark Leno on December 3, 2012 to authorize school districts, community college districts, and county offices of education to impose a parcel tax on real property by a 55% vote of the voters in the district or county under specified circumstances, including:  1) The district governing board approves the proposition by majority vote; 2)  The ballot proposition contains a specific list of programs and purposes to be funded, and a requirement that funds be spent solely for those programs and purposes; 3) The ballot proposition includes a requirement for annual independent audit of the amount of tax proceeds collected and expended and the specified purposes and programs funded; 4) The ballot proposition requires the governing board to create a citizens’ oversight committee to review all expenditures of proceeds and financial audits, and report its findings to the governing board and the public; and 5) The ballot proposition allows for an exemption from the tax for parcels owned by persons receiving SSI or SSDI, as specified.  SCA 3 is sponsored by the California Federation of Teachers, the California Superintendent of Public Instruction (Tom Torlakson), the California School Boards Association, and the California School Employees Association.
  • Senate Constitutional Amendment 7 [“SCA 7”] was introduced by Senator Lois Wolk on December 3, 2012 to would allow cities, counties, and special districts to issue bonded indebtedness to construct, reconstruct, rehabilitate, or replace public libraries, including furnishings, equipment, or leasing real property.  The measure requires the following accountability measures be in place as part of the ballot measure: 1) A requirement that bond proceeds be used solely to construct, reconstruct, rehabilitate, or replace public libraries, including furnishings, equipment, or leasing real property, and not for any other purpose, including personnel and operating expenses; 2) A list of the specific public library facility projects to be funded; 3)  Certification that the local agency has evaluated the degree to which existing facilities are inadequate to meet the needs of the residents of the area, and the degree to which proposed facilities will meet the needs; 4) A requirement for an annual independent performance audit ensuring that bond proceeds have been used solely for the listed projects; and 5) A requirement for an annual independent financial audit of the bond proceeds until all have been expended.  SCA 7 is sponsored by the California Library Association and supported by numerous city and county library trustees and public libraries.
  • Senate Constitutional Amendment 9 [“SCA 9”] was introduced on December 18, 2012 by Senator Ellen Corbett to lower the vote threshold for local agencies imposing, extending, or increasing a special tax to fund local community and economic development projects within their jurisdiction to 55% if all of the following requirements are met:  1) The ballot proposition contains a specific list of programs and purposes to be funded, and a requirement that tax proceeds be spent solely for those programs and purposes; 2) The ballot proposition includes a requirement for annual independent audit of the amount of tax proceeds collected and the specified purposes and programs funded; and 3) The ballot proposition requires the governing board to create a citizens’ oversight committee to review all expenditures of proceeds and financial audits, and report its findings to the governing board and public. This constitutional amendment would define a project as one that improves, upgrades, or revitalizes areas within the local government’s jurisdiction that have become blighted because of deterioration, disuse, or unproductive economic conditions.  SCA 9 is sponsored by Senator Corbett and supported by various public employee associations.
  • Senate Constitutional Amendment 11 [“SCA 11”] was introduced on January 25, 2013 by Senator Loni Hancock, who stated that “SCA 11 would lower the vote threshold for increasing most special taxes from 2/3 to 55%.  By doing so, it would align the general requirement with that of school bonds under Proposition 39.  It would lower the burden on cities, counties, and special districts to increase revenue for needed local services provided to Californians.  It would apply to nearly all services, from schools, to transportation, to public safety agencies.  SCA 11 would not mandate any increase on special taxes.  Cities, counties, and special districts would still have to place proposals on the ballot, and local voters would still have to approve them.  The existing exceptions to the 2/3 rule (for instance, sales taxes on real property sales) under Prop. 13 would remain in place. The only change SCA 11 makes in existing law is to lower the vote threshold so that 55% of local voters can choose to increase revenue for their city, county or special district.” SCA 11 was sponsored by Senator Hancock and supported by the Alameda County Transportation Commission, the Association of California Water Agencies, and various cities and park districts.

The Senate Committee on Transportation and Housing is considering the following two bills:

  • Senate Constitutional Amendment 4 [“SCA 4”] was introduced by Senator Carol Liu on December 3, 2012 to authorize a local government to impose a sales tax exclusively for transportation improvements upon the approval of 55 percent of the voters of that local government, rather than the current 2/3rds vote requirement. SCA 4 is supported by the Glendale Employees Association, League of California Cities, Organization of SMUD Employees, San Berndardino Public Employees Association, the San Luis Obispo County Employees Association and the Santa Rosa City Employees Association.
  • Senate Constitutional Amendment 8 [“SCA 8”] was introduced on December 14, 2012 by Senator Ellen Corbett  to lower the vote threshold for local agencies imposing, extending, or increasing a special tax to fund local transportation projects within their jurisdiction to 55%.  The measure also makes conforming changes to the Constitution. SCA 8 additionally requires a local agency that previously imposed a tax under a 2/3 vote from to first complete capital projects funded by that tax before spending proceeds from a tax approved by 55% of voters.  SCA 8 was supported by numerous cities and counties and transportation districts.

Contact Legislative Intent Service, Inc. at 1-800-666-1917 or by email here to discuss legislative history research of this or any other bill or regulation.

If you enjoyed this post, please consider leaving a comment. We always love to hear your feedback!