Vote Requirement for Local Tax Initiatives

A quick update on the legal wrangling over the vote requirement for citizens’ initiatives seeking to increase local parcel, gross receipts and other taxes – in short, special tax increases placed on the ballot by citizen initiative require approval of a majority (rather than two-thirds) of voters, subject to possible new legal or political developments. 

 

The California Supreme Court just this week declined to review the Court of Appeal case out of Fresno which upheld a majority vote requirement for special tax measures passed by voter initiative.  (City of Fresno v. Fresno Building Healthy Communities (2020) 59 Cal.App.5^th 220; Review Denied 3/30/21.)  The Fresno decision came after a Court of Appeal decision out of San Francisco which also upheld the majority vote requirement. (City and County of San Francisco v. All Persons Interested in the Matter of Proposition C (2020) 51 Cal.App.5^th 703.)  And in February, a third Court of Appeal decision – also out of San Francisco – upheld the majority vote requirement.  (Howard Jarvis Taxpayers Association v. City and County of San Francisco (2021) 60 Cal. App. 5^th 277)

 

With three Court of Appeal decisions concluding that tax increases proposed by citizens’ initiatives require only a majority, not two-thirds, vote to pass, campaigns should feel comfortable seeking to pass tax increase initiatives at the lower vote threshold.  We recommend, however, that campaigns confirm this conclusion with the city attorney or county counsel before proceeding with the campaign – different taxes have different rules, and different jurisdictions may have different levels of comfort with this interpretation.

 

One major caveat: the Howard Jarvis Taxpayers Association (HJTA) is expected to pursue a statewide initiative for the 2022 ballot which would re-establish the two-thirds vote requirement for local tax increase initiatives, regardless of how such initiatives reach the ballot.  HJTA has not yet submitted proposed initiative language to the Attorney General’s office to start the process, but may do so soon.