California ruling could make tax measures easier to pass in state

SAN FRANCISCO — An anti-tax group is warning that a California Supreme Court ruling will lead to more local taxes, but legal experts say the justices’ decision was narrowly focused and additional lawsuits will decide whether it also lowered the threshold to pass tax hikes.

In a 5-2 ruling on Monday, the state Supreme Court said general tax increases put on the ballot by citizens should go before voters at a special election. Only tax increases sought by local government are required to appear on a general election ballot, the majority said.

The ruling focused on a provision of Proposition 218, a 1996 ballot measure approved by voters that spelled out how local governments may levy new taxes. Another provision in the proposition requires a two-thirds vote to pass special taxes earmarked for specific purposes such as roads, schools or stadiums.

Some say the court’s decision could also limit the twothirds requirement to cities and counties, allowing special tax measures proposed by citizens groups to pass with a simple majority.

In a dissenting opinion, Associate Justice Leondra Kruger said the ruling would limit Proposition 218 that way, and that was not the intent of the measure’s backers.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, which sponsored the proposition, said the court’s decision could “burn” taxpayers.

“Public agencies could easily deny taxpayers their rights by colluding with outside interests to propose taxes in the form of an initiative, then submitting a tax under a lower vote threshold than that currently mandated by the constitution,” he said in a written statement.

He said it “may be necessary” to put another proposition before voters to close a “loophole” in Proposition 218 that the court had created.

In a news release Tuesday, Assembly Republicans said they would hold a news conference on Wednesday to announce a constitutional amendment to “reaffirm the voters’ intent to require local tax increases to receive approval from two-thirds of voters.”

Darien Shanske, a tax expert at the University of California, Davis School of Law, said the ruling won’t be the final word on whether the two-thirds requirement applies to citizeninitiated special tax hikes. There will be additional lawsuits on that issue.

“Some local group is going to do it,” he said. “They are going to insist they are entitled to a majority vote.”

Lower courts will likely interpret the Supreme Court ruling to say the 2/3 rule doesn’t apply to citizen tax measures, but there is a chance for disagreement among courts, and that could send the issue back to the California Supreme Court, he said.

Sen. Scott Wiener, a San Francisco Democrat who thinks cities have been hamstrung by Proposition 218, said while the case does not explicitly touch on the two-thirds vote requirement, it leaves the door open for communities to move toward a simple majority vote.

“Even if it takes another case to get there, it’s moving in a positive direction,” he said.

Sen. Jim Nielsen, a Republican from Gerber, said the court’s decision could encourage more “election day shopping,” when backers of an initiative look to hold an election when they think turnout will be in their favor.

Special elections typically bring low turnout, making it easier for advocates to pass their initiatives if they get enough supporters to the polls. Nielsen, who campaigned in support of Prop 218 in the 1990s, said that flouts the original goal of making it harder for new local taxes to be imposed.