S.D. hotel tax case is testing what ‘citizens’ initiative’ is

An appellate court ruling last week on San Diego’s proposed hotel tax increase underscores just how blurry the rules have become for certain ballot measures.

Yet further legal proceedings ordered by the court could help define how much government involvement is acceptable in a “citizens’ initiative” when it comes to raising taxes.

For a very long time, the rule in California seemed simple: A local tax increase for a specific purpose required two-thirds majority approval from voters.

A handful of years ago, state court rulings started changing that. Tax measures put on the ballot by a government agency, say a city council, still required a two-thirds vote, but a citizens’ initiative by way of signature-gathering only needed a simple majority.

It became clear that government officials could have a role in the latter — for they are, after all, citizens. But less certain is where the line is. If they cross it, the measure becomes a government action, necessitating the higher vote threshold.

That’s essentially where the city’s 2020 hotel tax proposal under Measure C now rests.

The 4th District Court of Appeal on Friday appeared to give proponents of the initiative a big victory, ruling the measure gained enough votes to pass, even though it fell just short of two-thirds — 65.24 percent in the March 3, 2020, election.

Here’s the caveat: The three-judge panel agreed that Measure C was a citizens’ initiative, but left that open to further challenge.

Attorney Cory Briggs, representing the California Taxpayers Action Network in the case, says it is not. The appellate court acknowledged — but did not endorse — Briggs’ argument that Jaymie Bradford, chief operating officer of the San Diego Regional Chamber of Commerce, played a role in Measure C, which should make it a government action, not an initiative.

Bradford did this while she also was a member of the board of the San Diego Convention Center Corp., which is part of the city government.

In its ruling, the court said “too much government involvement can mean an initiative is really presented by the local government.”

The judges didn’t say whether that was the case with Bradford. They said they didn’t have enough information to determine that, and sent that matter back to the trial court to be hashed out.

Citing previous cases, the court wrote “we understand that a government official’s involvement must demonstrate substantial control for an initiative to be deemed a government action rather a citizens’ initiative.”

What constitutes “substantial control” may be the multibillion-dollar question of whether the hotel tax survives.

It appears government officials can take a role in a ballot measure campaign without disqualifying it as a citizens’ initiative.

In 2018, then-San Francisco Supervisors Jane Kim and Norman Yee led the campaign behind an initiative for a commercial rent tax to fund child care and early childhood education, according to Ballotpedia. The measure received 51 percent of the vote, but a lawsuit was filed contending the proposal required a two-thirds majority.

The courts sided with the