CC SR 20230516 04 - Tax Payer Protection and Government Accountability
CITY COUNCIL MEETING DATE: 05/16/2023
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE: Consideration and possible action to support the Taxpayer Protection
and Government Accountability Act.
RECOMMENDED COUNCIL ACTION:
(1) Review the Taxpayer Protection and Government Accountability Act language,
that qualified as a 2024 state ballot measure, to determine if the City Council
should take a position of support; and,
(2) If deemed acceptable, adopt Resolution No. 2023-__ supporting the Taxpayer
Protection and Government Accountability Act.
FISCAL IMPACT: Taking position on the Taxpayer Protection and Government
Accountability Act will not have a fiscal impact on the City . However, if passed by the
voters in 2024, the City will be required to apply additional requirements and possibly
voter approval when considering to establish or increase taxes, service fees, and fines or
penalties, among other things, effective January 1, 2022 as discussed in this staff report.
Between January 1, 2022 and as recent as the May 2, 2023 meeting, the City Council
has adopted approximately a dozen new service fees that may be subject to the Act.
However, those fees were established based on reasonable costs incurred by City in
processing a request or service.
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Shaunna Hunter, MPA, Administrative Analyst
REVIEWED BY: Same as Below
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Draft Resolution No. 2023-__ supporting the Taxpayer Protection and
Government Accountability Act
B. January 2022-Ballot Initiative No. 21-0042A1, Taxpayer Protection and
Government Accountability Act.
C. January 19, 2022 - Legislative Analyst’s Office Review of Initiative No. 21-
0042A1
D. League of California Cities and Howard Jarvis Taxpayers Association analysis
of the Taxpayer Protection and Government Accountability Act.
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RANCHO PALOS VERDES
BACKGROUND:
State and local governments receive funding through ad valorem taxes levied on property,
income, and sales for goods or services. Additional funding for government services are
provided through the assessment of fees including entrance, parking, regulatory, and
penalty fees.
On February 1, 2023, the Taxpayer Protection and Government Accountability Act (Act),
also known as AG No.21-0042A1, qualified for the November 2024 ballot.
At the May 2, 2023 City Council meeting, under Future Agenda Topics, Mayor Pro Tem
Cruikshank requested, and the Council agreed, to place an item on tonight’s agenda to
consider supporting the Act.
DISCUSSION:
The Act proposes to amend language in the California Constitution that applies to excising
administrative taxes, fees, and surcharges on the taxpayer at the state, county, and local
levels (Attachment B). The Act expands the definition of Tax, requires voter approval for
state taxes, and identifies additional requirements for approving local taxes, service fees,
and administrative fines and penalties effective January 1, 2022.
The current requirement for the state to levy taxes is a 2/3rds approval of each house at
the state legislature or a majority vote of the electorate; whereas the requirement for local
governments to levy taxes and fees may be 2/3rds vote by the governing body, or majority
vote of the electorate, or with certain limitations a governing body may delegate their
authority to administrative departments to assess fees and charges.
The Act adds new requirements for excising state and local government administrative
fees including identification of the proposed fee, the rate, the length of time the fee will be
imposed, and the expected use of the fee imposed. The Act also requires state and local
administrative fees to be “reasonable and reflect the actual costs” associated with
providing the service or product. Examples of city fees impacted by the Act include
services and fees to rent city facilities. State and local governments would need to provide
“clear and convincing” evidence that the fee meets the threshold of “reasonable and
reflects the actual costs” prior to levying the proposed fee on the individual taxpayer.
Current fees enacted since January 1, 2022, would be subject to the Act provisions and
must meet the minimum requirements set out in the act for adoption within 12 months or
the fee would be nullified. Provisions in the Act may restrict local government revenue
generating processes and may result in overall lower local government revenue.
The Act may require local governments to define and implement a process for setting
fees which may include direct cost analysis, auditing, and annual review to ensure
transparency in “clear and convincing” language that all governmental fees continue to
meet the threshold of “reasonable and reflect actual costs”.
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ADDITIONAL INFORMATION:
In order to give the City Council information on both positions of the Act for its
consideration, especially potential impacts on the Rancho Palos Verdes community, staff
has invited representatives from the Howard Jarvis Taxpayer Association (support) and
the Cal Cities (opposed) to speak at tonight’s meeting. As of now, both representatives
have accepted our invitation.
CONCLUSION:
Staff recommends that the City Council review the ballot measure language, and if
deemed acceptable to take a position of support, as requested by Mayor Pro Tem
Cruikshank, adopt the attached resolution (Attachment A) supporting the Act.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration:
1. Take no action on the resolution.
2. Direct staff to return with a resolution at the June 6, 2023 meeting opposing the
ballot measure.
3. Read into the record the position the Council agrees to take for adopti on at the
meeting.
4. Direct Staff to conduct additional research and provide other alternatives at a future
Council Meeting.
5. Take other action, as deemed appropriate.
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3673580.2 045616 DRFT
RESOLUTION NO. 2023-____
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES, CALIFORNIA
EXPRESSING SUPPORT OF THE TAXPAYER
PROTECTION AND GOVERNMENT
ACCOUNTABILITY ACT.
WHEREAS, California has one of the highest tax burdens of any state in the United
States and continued increases in taxes and fees are adding to the state’s sky -high cost
of living, and
WHEREAS, California has the nation’s highest state income and sales taxes,
second highest gasoline taxes as well as rising property and utility taxes, and
WHEREAS, the State Legislature has proposed billions in new taxes this year
alone while local officials have enacted $8.8 billion in annual general and special taxes
from 2010 to 2020, and
WHEREAS, the Taxpayer Protection and Government Accountability Act gives
voters the right to vote on all state and local taxes, and
WHEREAS, the Taxpayer Protection and Government Accountability Act requires
state legislation imposing any new or higher taxes to be approved by a ma jority of voters
in a statewide election, and
WHEREAS, the Taxpayer Protection and Government Accountability Act closes
tax loopholes at the local level, and
WHEREAS, the Taxpayer Protection and Government Accountability Act will
reinstate the two-thirds approval requirement for any new or higher “special taxes”
proposed by initiative in a local election, while still maintaining the current majority vote
requirement for general tax increases, and
WHEREAS, with the cost-of-living skyrocketing, the City Council affirms its support
for voters to have their voices heard on issues regarding taxation and for giving voters
greater oversight in response to continued spending and corresponding tax increases.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:
Section 1. The facts set forth in the Recitals of this Resolution are true and correct
and are hereby incorporated by reference as though set forth in full.
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3673580.2 045616 DRFT
Section 2. The City Council of the City of Rancho Palos Verdes formally expresses
support for the Taxpayer Protection and Government Accountability Act and the benefit
that it provides to taxpayers and to the state’s overall economy.
Section 3. This Resolution shall take effect immediately upon its passage and
adoption.
PASSED, APPROVED AND ADOPTED on this 16th day of May, 2023.
Barbara Ferraro, Mayor
Teresa Takaoka, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Teresa Takaoka, City Clerk of the City of Rancho Palos Verdes, do hereby certify that
the foregoing Resolution No. 2023-__ was duly adopted by the City Council of the City of
Rancho Palos Verdes at a regular meeting held on the 16th day of May, 2023.
Teresa Takaoka, City Clerk
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BELL, MCANDREWS & HILTACHK, LLP
ATTORNEYS AND COUNSEI..ORS AT l..AW
455 C A Pl T O L MALL , S UITE 600
SAC RAMENTO, C ALI FORN I A 9 5814
(9 16) 442-7 75 7
FA X (916) 442-7759
www.bmhlaw.c om
January 4, 2022
Anabel Renteria
Initiative Coordinator
2 1 -0 0 4 2
RECEI VED
JAN O 4 2022
Arndt# I
Office of the Attorney General
State of California
INITI ATIVE COO RDIN ATOR
ATTORNEY GENERAL'S OFFICE
PO Box 994255
Sacramento, CA 94244-25550
Re: Initiative 21-0042 -Amendment Number One
Dear Initiative Coordinator:
Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please
find Amendment #1 to Initiative No. 21-0042 "The Taxpayer Protection and
Government Accountability Act." The amendments are reasonably germane to the
theme, purpose or subject of the initiative measure as originally proposed.
I am the proponent of the measure and request that the Attorney General
prepare a circulating title and summary of the measure as provided by law, using the
amended language.
Thank you for your time and attention processing my request.
Sincere
tp,,,
Thomas W. Hiltachk
B-2
2 1 -0 0 4 2 Arndt. # /
The Taxpayer Protection and Government Accountability Act
[Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and underline.]
Section 1. Title
This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability
Act.
Section 2. Findings and Declarations
(a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline
tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest
in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state
politicians in 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes
and fees.
(b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions
more in hidden "fees" passed through to consumers in the price they pay for products, services, food,
fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than
doubled.
(c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and
homelessness, they are the pushing working families and job-providing businesses out of the state. The
most recent Census showed that California's population dropped for the first time in history, costing us a
seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not
counting thousands more small businesses that were forced to move, sell or close.
(d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes
and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what
passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These
measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition
26 (2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and
accountability, have been weakened and hamstrung by the Legislature, government lawyers, and the
courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court
decisions.
Section 3. Statement of Purpose
(a) In enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes
by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees
and other charges are passed or rejected by the voters themselves or a governing body elected by voters
and not unelected and unaccountable bureaucrats.
(b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency
and accountability over higher taxes and charges by requiring any tax measure placed on the ballot-
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either at the state or local level-to clearly state the type and rate of any tax, how long it will be in effect,
and the use of the revenue generated by the tax.
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new
or increased form of state government revenue, by any name or manner of extraction paid directly or
indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the
Governor to ensure that the purposes for such charges are broadly supported and transparently debated.
(d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that
taxpayers have the right and ability to effectively balance new or increased taxes and other charges with
the rapidly increasing costs Californians are already paying for housing, food, childcare, gasoline, energy,
healthcare, education, and other basic costs of living, and to further protect the existing constitutional
limit on property taxes and ensure that the revenue from such taxes remains local, without changing or
superseding existing constitutional provisions contained in Section l(c) of Article XIII A.
(e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two-
thirds vote and voter approval requirements for government revenue increases created by the courts
including, but not limited to, Cannabis Coalition v. City of Upland, Chamber of Commerce v. Air Resources
Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v.
Orange County Local Agency Formation Commission, and Wilde v. City of Dunsmuir.
Section 4. Section 3 of Article XIII A of the California Constitution is amended to read:
Sec. 3(aJ Every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt
charge.
l1J.l111 fa1 Any change in state statute law which results in any taxpayer paying a new or higher tax must
be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature, and submitted to the electorate and approved by a maiority vote, except that no new
ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be
imposed. Each Act shall include:
(AJ A specific duration of time that the tax wiJ/ be imposed and an estimate of the annual amount expected
to be derived from the tax.
(BJ A specific and legaJ/y binding and enforceable limitation on how the revenue from the tax can be spent.
If the revenue from the tax can be spent for unrestricted general revenue purposes. then a statement that
the tax revenue can be spent for "unrestricted general revenue purposes" shall be included in a separate,
stand-a/one section. Any proposed change to the use of the revenue from the tax shall be adopted by a
separate act that is passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature and submitted to the electorate and approved by a maiority vote.
(2) The title and summary and ballot label or question required for a measure pursuant to the Elections
Code shall, for each measure providing for the imposition of a tax, including a measure proposed by an
elector pursuant to Article II, include:
(A) The type and amount or rate of the tax;
(BJ The duration of the tax; and
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(CJ The use of the revenue derived from the tax.
(c) Any change in state law which results in any taxpayer paying a new or higher exempt charge must be
imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of
exempt charge as provided in subdivision (e J, and the amount or rate of the exempt charge to be imposed.
MJ..fb} As used in this section and in Section 9 of Article II, "tax" means every a-Alf levy, charge, or exaction
of any kind imposed by the State state Jaw that is not an exempt charge. eMcept the f.ollov.•ing:
(e) As used in this section, "exempt charge" means only the following:
(1) a et:iarge imposed f.or a s1:1eeific benefit conferred or privilege granted directly to the pa•;or tl:iat is not
1:1ro,.1ieed to tt:iose not chargeEI, ane which eoes not eMceed the reasonable costs to the State of eonferring
the benefit or granting the pri,..ilege to the pa•,•or.
ill WA reasonable charge imposed for a specific government service or product provided directly to the
payor that is not provided to those not charged, and which does not exceed the reasonable actual costs
to the State of providing the service or product to the payor.
WW A charge imposed for the reasonable regulatory costs to the State incident to issuing licenses and
permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and
the administrative enforcement and adjudication thereof.
(3) A levy, charge. or exaction collected from local units of government, health care providers or health
care service plans that is primarily used by the State of California for the purposes of increasing
reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily
used to finance the non-federal portion of Medi-Cal medical assistance expenditures.
(4) A reasonable charge imposeel for entrance to or use of state property, or the purchase, rental, or lease
of state property, except charges governed by Section 15 of Article XI.
(5) A fine, or penalty, or other rnonetary charge including any applicable interest for nonpayment thereat
imposed by the judicial branch of government or the State, as a result of a state administrative
enforcement agency pursuant to adjudicatory due process, to punish a violation of law.
(6} A levy, charge. assessment. or exaction collected for the promotion of California tourism pursuant to
Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code.
/Jl{E} Any tax or exempt charge adopted after January 1, 2022 ~. but prior to the effective date of this
act, that was not adopted in compliance with the requirements of this section is void 12 months after the
effective date of this act unless the tax or exempt charge is reenacted b•t the begislature anel signed into
law b't' the Goi.iernor in compliance with the requirements of this section.
f.gl{Jl_fdj The State bears the burden of proving by a preponderance of the clear and convincing evidence
that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of
proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that
the amount charged does not exceed the actual cost of providing the service or product to the payor . .tA-at
the ammmt is no more than neeessary to co•.ier tt:ie reasonable costs of tf:1e go•.iernmental acti¥ity ane
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that the FAanner in which those costs are allocated to a pa•1or bear a fair er reasonable relationship to the
pa•1or's burdens en, or benefits receiveel ~rem, the go•.•ernmental acth•ity
(2) The retention of revenue bv. or the payment to. a non-governmental entity of a levy. charge. or exaction
of any kind imposed by state law. shall not be a factor in determining whether the levy. charge, or exaction
is a tax or exempt charge.
(3) The characterization of a levv. charge. or exaction of any kind as being voluntary. or paid in exchange
for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the
levy, charge, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levv, charge or exaction shall be a factor in determining whether
the levy. charge. or exaction is a tax or exempt charge.
{h) As used in this section:
(1) "Actual cost" of providing a service or product means: (iJ the minimum amount necessary to reimburse
the government for the cost of providing the service or product to the payor, and {ii) where the amount
charged is not used by the government for any purpose other than reimbursing that cost. In computing
"actual cost" the maximum amount that may be imposed is the actual cost less all other sources ofrevenue
including. but not limited to taxes, other exempt charges, grants. and state or federal funds received to
provide such service or product.
(2) "Extend" includes. but is not limited to, doing any of the following with respect to a tax or exempt
charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new
territory or class ofpayor. or expanding the base to which its rate is applied.
(3) "Impose" means adopt, enact, reenact. create, establish, collect, increase or extend.
(4) ''State law" includes. but is not limited to. any state statute, state regulation, state executive order,
state resolution, state ruling. state opinion letter, or other legal authority or interpretation adopted.
enacted, enforced, issued. or implemented by the legislative or executive branches of state government.
"State law" does not include actions taken by the Regents of the University of California. Trustees of the
California State University, or the Board of Governors of the California Community Colleges.
Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
(a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse
the government for the cost of providing the service or product to the payor. and (ii} where the amount
charged is not used by the government for any purpose other than reimbursing that cost. In computing
"actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue
including. but not limited to taxes, other exempt charges, grants, and state or federal funds received to
provide such service or product.
{b) "Extend" includes. but is not limited to. doing any of the following with respect to a tax, exempt charge,
or Article XIII D assessment, fee, or charge: lengthening its duration. delaying or eliminating its expiration,
expanding its application to a new territory or class of pavor. or expanding the base to which its rate is
applied.
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lfl..W "General tax" means any tax imposed for general governmental purposes.
(d) "Impose" means adopt, enact, reenact, create, establish. collect, increase, or extend.
{rl_fb} "Local government" means any county, city, city and county, including a charter city or county, any
special district, or any other local or regional governmental entitv, or an elector pursuant to Article II or
the initiative power provided by a charter or statute.
(f) "Local law" includes, but is not limited to, any ordinance, resolution, regulation, ruling, opinion letter.
or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a focal
government.
{gj__fe} "Special district" means an agency of the State, formed pursuant to general law or a special act, for
the local performance of governmental or proprietary functions with limited geographic boundaries
including, but not limited to, school districts and redevelopment agencies.
ll1)_{Eij "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific
purposes, which is placed into a general fund.
fJl ~ As used in this article, and in Section 9 of Article II, "tax" means every aRV-levy, charge, or exaction
of any kind, imposed by a local governmeRt low that is not on exempt charge., eKeept the fullo•NiRg:
(i) As used in this section, "exempt charge" means only the following:
(1) A charge imposed fur a speeific benefit coRferred or pri•.<ilege granted directl'I to the payer that is not
proviEleEl to tt:lose not eharged, and whieh 1foes not eKceed the reasonable costs to the loeal go•,ernment
of conferring the benefit or granting the pri11ilege.
ill~ A reasonable charge imposed for a specific local government service or product provided directly
to the payor that is not provided to those not charged, and which does not exceed the reasonable actual
costs to the local government of providing the service or product.
f21 ~ A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and
permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and
the administrative enforcement and adjudication thereof.
111.-{4-t A reasonable charge ifflposed for entrance to or use of local government property, or the purchase,
rental, or lease of local government property.
111 ts}, A fine, or penalty, or otl=ter monetar,· cl=targe including any applicable interest for nonpayment
thereat imposed by the judicial branch of government or a local government administrative enforcement
agency pursuant to adjudicatory due process, as a resl:llt of to punish a violation of law.
ill -fat A charge imposed as a condition of property development. No levv, charge, or exaction regulating
or related to vehicle miles traveled may be imposed as a condition of property development or occupancy.
{§)_ f7-} An Assessments and property related fees assessment, fee. or charge imposed in aeeordanee with
the pFOvisions of subiect to Article XI II D. or an assessment imposed upon a business in a tourism marketing
district, a parking and business improvement area. or a property and business improvement district.
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(7) A charge imposed for a specific health care service provided directly to the payor and that is not
provided to those not charged, and which does not exceed the reasonable costs to the local government
of providing the health care service. As used in this paragraph, a "health care service" means a service
licensed or exempt from licensure by the state pursuant to Chapters 1.1.3, or 2 of Division 2 of the Health
and Safety Code.
Tl:le losal go¥emment bears tl:le burden of proving b',' a preponderance of tl:le eYielence tl:lat a le\0(, cl:large,
or other e:1<actien is net a ta:1<, that the arnmmt is no more than necessary to co 1.ier tl:1e reasenaBle costs of
the governmental acfa•ity and that the manner in 11rhich those costs are allocated to a payor bear a fair or
reasonable relationsl:lip to the pa','or's burdens on, or Benefits receiYed from, the governmental acfra1ity .
Section 6. Section 2 of Article XIII C of the California Constitution is amended to read:
Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) Every levy, charge. or exaction of any kind imposed by local law is either a tax or an exempt charge. All
taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special
purpose districts or agencies, including school districts, shall have no power to levy general taxes.
(b) No local law government whether proposed by the governing body or by an elector. may impose,
extend, or increase any general tax unless and until that tax is submitted to the electorate and approved
by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not
higher than the maximum rate so approved . The election required by this subdivision shall be consolidated
with a regularly scheduled general election for members of the governing body of the local government,
except in cases of emergency declared by a unanimous vote of the governing body.
(c} An11 general tm< imposed, el<tended, or increased, without •,eater appreYal, by any local go1.,ernment on
or after January 1, 199§, and prier to the effectiYe date of tl:lis article, shall continue ta be imposed onl','
if appro,.•ed b•t a R'lajOFit'( vote ef the Yoters veting in an election en the issue of t"1e in1position, whicA
election sl=lall Be l=leld within twe ~'ears of tl:le effectiYe aate of this article and in compliance with
subdivision !b). {d) No local law government, whether proposed by the governing body or by an elector,
may impose, eMtend, or increase any special tax unless and until that tax is submitted to the electorate
and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is
imposed at a rate not higher than the maximum rate so approved.
(d) The title and summary and ballot label or question required for a measure pursuant to the Elections
Code shall, for each measure providing for the imposition of a tax, include:
(1) The type and amount or rate of the tax;
(2) the duration of the tax; and
(3) The use of the revenue derived from the tax. If the proposed tax is a general tax. the phrase "for general
government use" shall be required, and no advisory measure may appear on the same ballot that would
indicate that the revenue from the general tax will, could, or should be used for a specific purpose.
(e) Only the governing body of a local government, other than an elector pursuant to Article II or the
initiative power provided by a charter or statute, shall have the authority to impose any exempt charge.
The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge
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as provided in Section 1 (i) and the amount or rate of the exempt charge to be imposed, and passed by the
governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (i) of
Section 1.
(f) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt
charge shall be submitted to or approved by the electors, nor shall any such amendment to a Charter
hereafter submitted to or approved by the electors become effective for any purpose.
{q) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that
was not adopted in compliance with the requirements of this section is void 12 months after the effective
date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this
section.
{h)(l) The local government bears the burden of proving by clear and convincing evidence that a levy,
charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving
by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount
charged does not exceed the actual cost of providing the service or product to the payor.
(2) The retention of revenue by, or the payment to. a non-governmental entity of a levy, charge. or exaction
of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or
exaction is a tax or exempt charge.
(3) The characterization of a levy, charge, or exaction of any kind imposed by a local law as being paid in
exchange for a benefit. privilege, allowance, authorization, or asset. shall not be factors in determining
whether the levy, charge, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether
the levy, charge. or exaction is a tax or exempt charge.
Section 7. Section 3 of Article Xlll D of the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited
(a) No tax, assessment, fee, 9f charge, or surcharge, including a surcharge based on the value of property,
shall be assessed 1;,,,, an11 agenc11 upon any parcel of property or upon any person as an incident of property
ownership except:
(1) The ad valorem property tax imf)osed f)Yrs1:1ant to described in Section l(a) of Article XIII and Section
l(a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section l{b}
Q[Article XII I A.
(2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4
of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities
district by the legislature pursuant to statute as it existed on December 31, 2021.
(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article.
7
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(b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed
charges or fees imposed as an incident of property ownership.
Section 8. Sections 1 and 14 of Article XIII are amended to read:
Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States:
(a) All property is taxable and shall be assessed at the same percentage offair market value. When a value
standard other than fair market value is prescribed by this Constitution or by statute authorized by this
Constitution, the same percentage shall be applied to determine the assessed value. The value to which
the percentage is applied, whether it be the fair market value or not, shall be known for property tax
purposes as the full value .
(b) All property so assessed shall be taxed in proportion to its full value.
(c) All proceeds from the taxation of property shall be apportioned according to law to the districts within
the counties.
Sec. 14 . All property taxed by state or local government shall be assessed in the county, city, and district
in which it is situated. Notwithstanding any other provision of/aw, such state or local property taxes shall
be apportioned according to law to the districts within the counties.
Section 9. General Provisions
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (1) In the event that this initiative measure and another initiative measure or measures relating to state
or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other
revenue measures shall appear on the same statewide election ballot, the other initiative measure or
measures shall be deemed to be in conflict with this measure. In the event that this initiative measure
receives a greater number of affirmative votes, the provisions of this measure shall prevail in their
entirety, and the provisions of the other initiative measure or measures shall be null and void .
(2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the
provisions of the "Housing Affordability and Tax Cut Act of 2022" and "The Tax Cut and Housing
Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain
real property, and where the revenue derived from the tax is provided to the State, rather than retained
in the county in which the property is situated and for the use of the county and cities and districts within
the county, in direct violation of the provisions of this initiative.
(3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other
conflicting initiative measure approved by the voters at the same election, and such conflicting initiative
is later held invalid, this measure shall be self-executing and given full force and effect.
C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause,
sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any
court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this
Act. The People of the State of California hereby declare that they would have adopted this Act and each
and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not
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declared invalid or unconstitutional without regard to whether any portion of this Act or application
thereof would be subsequently declared invalid.
D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal
challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse
to defend this Act, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 2 of the
Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully
and vigorously defend this Act on behalf of the State of California.
(2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise
due diligence in determining the qualifications of independent counsel and shall obtain written
affirmation from independent counsel that independent counsel will faithfully and vigorously defend this
Act. The written affirmation shall be made publicly available upon request.
(3) A continu ous app ropriation is hereby made from the General Fund to the Controller, without regard
to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully
and vigorously defend this Act on behalf of the State of California.
(4 ) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association,
from intervening to defend this Act.
9
Preprinted L ogo will go here
January 19, 2022
Hon. Rob Bonta
Attorney General
1300 I Street, 17th Floor
Sacramento, California 95814
Attention: Ms. Anabel Renteria
Initiative Coordinator
Dear Attorney General Bonta:
Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional
Taxpayer Protection and Government Accountability Act initiative (A.G. File No. 21-0042,
Amendment #1).
Background
State Government
Taxes and Fees. This year’s state budget spends over $255 billion in state funds. Over
90 percent of the state budget is funded with revenues from taxes. These include, for example,
sales taxes paid on goods and income taxes paid on wages and other sources of income. Much of
the rest of the state budget is funded by fees and other charges. Examples include: (1) charges
relating to regulatory activities; (2) charges for specific government services or products, like
fees charged to drivers to improve roads; (3) charges for entering state property, such as a state
park; and (4) judicial fines, penalties, and other charges. The State Constitution requires the state
to set fees at a reasonable level, generally reflecting the costs of the services or benefits provided.
The state uses revenue from taxes and fees to fund a variety of programs and services, including
education, health care, transportation, and housing and homelessness services.
Current Requirements to Approve Taxes and Fees. Under the State Constitution, state tax
increases require approval by two-thirds of each house of the Legislature or a majority vote of
the statewide electorate. The Legislature can reduce taxes with a majority vote of each house,
provided the change does not result in an increase in taxes paid by any single taxpayer. In many
cases, the Legislature has enacted statutes that delegate its authority to adjust fees and other
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LAOA
L egislative,An a lyst's Office
California Legis latur e
Gab ri e l Pete k, Legislative Analys t
925 L Street, Suite 1000, Sacrame nto, CA 958 14
(9 16) 445-4656
Hon. Rob Bonta 2 January 19, 2022
charges to administrative entities, like state departments. In these cases, these charges can be
increased or changed by the department within certain limits.
Local Government
Taxes and Fees. The largest local government tax is the property tax, which raises roughly
$75 billion annually. Other local taxes include sales taxes, utility taxes, and hotel taxes. In
addition to these taxes, local governments levy a variety of fees and other charges. Examples
include parking meter fees, building permit fees, regulatory fees, and judicial fines and penalties.
In order to be considered a fee, the charge cannot exceed the reasonable costs to the local
government of providing the associated product or service. Local governments use revenues
from taxes and fees to fund a variety of services, like fire and police, public works, and parks.
Current Requirements to Approve Taxes and Fees. State law requires increases in local
taxes to receive approval of the local governing body—for example, a city council or county
board of supervisors—as well as approval of voters in that local jurisdiction. Most proposed
taxes require a two-thirds vote of the local governing board before being presented to the voters.
Special taxes (those used for a specific purpose) require a two-thirds vote of the electorate while
other types of taxes require a majority vote of the electorate. The majority-vote general taxes can
be used for any purpose. Recent case law suggests that citizen initiative special taxes may be
approved by majority vote, rather than a two-thirds vote. Currently, local governing bodies have
the ability to delegate their authority to adjust fees and other charges to administrative entities,
like city departments. In these cases, these charges can be increased or changed by the
department within certain limits.
Proposal
This measure amends the State Constitution to change the rules for how the state and local
governments can impose taxes, fees, and other charges.
State and Local Government Taxes
Expands Definition of Tax. The measure amends the State Constitution to expand the
definition of taxes to include some charges that state and local governments currently treat as
fees and other charges. For example, certain charges imposed for a benefit or privilege granted to
a payer but not granted to those not charged would no longer be considered fees. As a result, the
measure could increase the number of revenue proposals subject to the higher state and local
vote requirements for taxes discussed below.
Requires Voter Approval for State Taxes. The measure increases the vote requirements for
increasing state taxes. Specifically, the measure requires that legislatively proposed tax increases
receive approval by two-thirds of each house and a majority vote of the statewide electorate.
Voters would still be able to increase taxes by majority vote of the electorate without legislative
action, however. Any state tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Requirements for Approving Local Taxes. Whether sought by the local governing body or
the electorate, the measure establishes the same approval requirements for increasing local
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Hon. Rob Bonta 3 January 19, 2022
special taxes. Any local tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Allowable Uses and Duration of State and Local Tax Revenues Must Be Specified. The
measure requires state and local tax measures to identify the type and amount (or rate) of the tax
and the duration of the tax. State and local government general tax measures must state that the
revenue can be used for general purposes.
State and Local Government Fees
Requires the Legislature and Local Government Bodies to Impose State and Local Fees.
Fees would have to be imposed by a majority vote of both houses of the Legislature or local
governing bodies. The measure would restrict the ability of state and local governments to
delegate fee changes to administrative entities. The extent of these restrictions would depend on
future court decisions. Any fee approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Some New State and Local Fees Could Not Exceed Actual Costs. For some categories of
fees, if the Legislature or a local governing body wished to impose a new fee or make changes to
an existing fee, the measure generally would require that the charge be both reasonable and
reflect the actual costs to the state or local government of providing the service. The measure
also specifies that actual cost should not exceed “the minimum amount necessary.” In many
cases, existing fees already reflect the government’s actual costs. In other cases, some fees would
have to more closely approximate the payer’s actual costs in order to remain fees. If a fee payer
challenged the charge, the state or local government would need to provide clear and convincing
evidence that the fee meets this threshold. State and local governments also would bear the
burden of providing clear and convincing evidence that the levy is a fee—which is not subject to
a vote by the electorate—and not a tax under the new definition.
Fiscal Effects
Lower State Tax and Fee Revenue. By expanding the definition of a tax, increasing the vote
requirements for approving taxes, and restricting administrative changes to fees, the measure
makes it harder for the Legislature to increase nearly all types of state revenues. The extent to
which revenues would be lower under the measure would depend on various factors, most
notably future decisions made by the Legislature and voters. For example, requirements for
legislative approval of fee increases currently set administratively could result in lower fee
revenues, depending on future votes of the Legislature. That lower revenue could be particularly
notable for some state programs largely funded by fees. Due to the uncertainty of these factors,
we cannot estimate the amount of reduced state revenue, but it could be substantial.
Lower Local Government Tax and Fee Revenue. Compared to the state, local governments
generally face greater restrictions to raising revenue. By expanding the definition of taxes and
restricting administrative changes to fees, the measure would make it somewhat harder for local
governments to raise revenue. Consequently, future local tax and fee revenue could be lower
than they would be otherwise. The extent to which revenues would be lower is unknown, but
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Hon. Rob Bonta 4 January 19, 2022
fees could be more impacted. The actual impact on local government revenue would depend on
various factors, including future decisions by the courts, local governing bodies, and voters.
Possible Increased State and Local Administrative Costs to Change Some Fee Levels. In
some cases, state and local departments would need to develop methods for setting fees to reflect
actual costs if the Legislature or local governing bodies wanted to change those fees in the
future. Estimating actual costs by program and fee source could involve some added workload
for those state and local departments, which likely would be supported by fee revenue. The
extent of these administrative costs would depend on (1) whether the state and local governments
determine a fee increase is needed in order to maintain their current level of programs and
services funded through fee revenue and (2) future court decisions.
Summary of Fiscal Effects. We estimate that this measure would have the following major
fiscal effects:
• Lower annual state and local revenues, potentially substantially lower, depending on
future actions of the Legislature, local governing bodies, voters, and the courts.
Sincerely,
_____________________________
for Gabriel Petek
Legislative Analyst
_____________________________
for Keely Martin Bosler
Director of Finance
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1
The Taxpayer Protection and Government Accountability Act
Initiative No. 21-0042A1 1
Feb. 1, 2023
Effective date: Any new or increased tax or fee adopted by the Legislature, a
city council, or the local voters after January 1, 2022, must comply with the Act’s
new rules.
Voters
• Local advisory measures are prohibited. No measure may appear on the
ballot asking for approval of a general tax that would allow the voters to
express a preference for how the revenue from the general tax will, could, or
should be used.
• Overturns Upland decision which upheld a special tax that had been placed
on the ballot by the voters to be approved by a majority vote. Taxes
proposed by initiative will be subject to the same rules as taxes placed on the
ballot by a city council.
• Voters may not amend a city charter to impose, extend, or increase a tax or
fee.
Local taxes
• Requires voter approval in order to apply an existing tax:
o to territory that is annexed.
o to a new service or product, for example when a utility user tax is
applied to a new service.
• All new or increased taxes adopted after Jan. 1, 2022, must include a sunset
date.
State taxes
• All new or increased state taxes require statewide voter approval.
• Prohibits a property tax “surcharge” (increase). Prohibits any allocation of
property tax to the state.
1 This is a summary of some of the more significant provisions of the Act. Please review the Act for
a complete understanding of the changes it makes to the Constitution.
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2
Fees and charges
• Fees and charges for services and permits may not exceed the “actual cost”
of providing the product or service for which the fee is charged. “Actual
cost” is the “minimum amount necessary.” Examples include planning
services, excavation and encroachment permits, preparation of candidate
statement, and permit parking.
• State and cities have the burden of proving by “clear and convincing
evidence” that a fee/charge is not a tax, that the amount is reasonable, and
that it does not exceed “actual cost.”
• Franchise fees — historically considered fees, not taxes — will more likely be
considered taxes due to the elimination of an existing category of “fee” and
the requirement that charges to entrance, purchase, rental, or lease of
government property be “reasonable.” The state and cities issue franchises to
oil companies, utilities, gas companies, railroads, garbage companies, cable
companies, and other corporations.
• No fee or charge or exaction regulating vehicle miles traveled can be
imposed as a condition of property development or occupancy.
Fines and penalties (administrative enforcement of state law and municipal
codes)
• May require voter approval of fines and penalties for corporations and
property owners that violate state and local laws unless a new, undefined
adjudicatory process is used to impose the fines and penalties. Examples
include nuisance abatement, organic waste reduction requirements, and
failure to maintain a vacant property.
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Fiscal and Program Effects of
Initiative 21-0042A1 on Local Governments
If Initiative 21-0042A1 is placed on the ballot and passed by voters, it will result in:
Over $20 billion of local government fee and charge revenues over 10 years placed at heightened legal
peril. Related public service reductions across virtually every aspect of city, county, special district, and
school services especially for drinking water, sewer sanitation, and public health and safety.
About $2 billion of revenues each year from fees and charges adopted after January 1, 2021 subject to
legal peril.1
Over $2 billion dollars of annual revenues from dozens of tax measures approved by voters between
January 1, 2022 and the effective date of the act2 subject to additional voter approval if not in compliance
with the initiative.
Indeterminable legal and administrative burdens and costs on local government from new and more
empowered legal challenges, and bureaucratic cost tracking requirements.
The delay and deterrence of municipal annexations.
Substantially higher legal and administrative cost of public infrastructure financing which will delay and
deter new residential and commercial development.
Service and infrastructure declines including in fire and emergency response, law enforcement, public
health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing,
homelessness prevention and mental health services.
1. Local Government Taxes and Services Threatened
With regard to taxes, Initiative 21-0042A1:
Prohibits advisory, non-binding measures as to use of tax proceeds on the same ballot.
o Voters may be less informed and more likely to vote against measures.
Eliminates the ability of special tax measures proposed by citizen initiative to be enacted by majority voter
approval (Upland).3
o Because the case law regarding citizen initiative special taxes approved by majority vote (Upland)
is so recent, it is unknown how common these sorts of measures might be in the future. This
initiative would prohibit such measures after the effective date of the initiative. Any such
measures adopted after January 1, 2022 through the effective date of the Act should it pass
would be void a year after the effective date of the initiative.
Requires that tax measures include a specific duration of time that the tax will be imposed. This seems to
require that all tax increases or extensions contain a sunset (end date).
o This would require additional tax measures to extend previously approved taxes.
A city charter may not be amended to impose, extend, or increase a tax might interfere with the ability of
cities that do not already have such authority in their charters to adopt Property Transfer Taxes.
o There are no more than a few of these every few years, but it is a valuable tax for those that
adopt it.
1 Assumes fee increases since January 1, 2022 would be subject to possible legal challenge if not adopted in compliance with the
Initiative.
2 The effective date of the initiative would be sometime in December 2024, the date the California Secretary of State certifies the
election results of the November 5, 2024 election.
3 Unlike the initiative 17-0050, this initiative does not eliminate that ability of cities and counties to adopt general taxes by majority
voter approval.
2217 Isle Royale Lane • Davis, CA • 95616-6616
Phone: 530.758.3952 • Fax: 530.758.3952
Rev. January 14, 2023
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Requires that a tax measure adopted after January 1, 2022 and before the effective date of the initiative
that was not adopted in accordance with the measure be readopted in compliance with the measure or
will be void twelve months after the effective date of the initiative.
o If past election patterns and elections in 2022 are an indication, over 200 tax measures approving
more than $2 billion annual revenues to support local public services would not be in compliance
and would be subject to reenactment. Most will be taxes without a specific end date and special
taxes (including parcel taxes). Because there is no regularly scheduled election within the 12
months following the effective date of the initiative, the measures would each require declaration
of emergency and unanimous vote of the governing board to be placed on a special election
ballot within a year for approval or the tax will be void after that date. I would expect most to
succeed, but some will not, in particular citizen initiative majority vote special taxes which would
have to meet a higher voter approval threshold to continue.
Requires voter approval to expand an existing tax to new territory (annexations). This would require
additional tax measures and would deter annexations and land development in cities.
o If a tax is "extended" to an annexed area without a vote after January 1, 2022, it will be void 12
months later until brought into compliance. Because there is no regularly scheduled election
within the 12 months following the effective date of the initiative, such extensions would each
require unanimous vote of the agency board to be placed on a special election ballot or would be
void a year later.
1.a. Number of Measures and Value of Local Taxes at Risk4
Over a hundred local measures were approved in 2022 that likely do not comply with the provisions of Initiative
21-0042A1. Nearly $2 billion of annual revenues from these voter approved measures will cease a year after the
effective date of the measure, reducing the local public services funded by these measures. We can expect a
similar volume of measures in 2024 and a similar volume of non-compliance. So the combined total of annual
local funding directly affected by Initiative 21-0042A1 due to its retroactivity provision is about $4 billion.
Citizen Initiative Special Taxes in 2022.
Special taxes placed on the ballot by citizen initiative and approved after January 1, 2022 by a majority but less
than two-thirds of the voters are out of compliance with Initiative 21-0042A1.
On June 7, 2022, there were three local special tax measures placed on the ballot by citizen initiative. Two failed
to get majority voter approval. A one percent transactions and use tax (sales tax) for the John C. Fremont
Healthcare District in Mariposa County received 69.6 percent approval, over the two thirds needed for any special
tax under California Constitution Article XIIIC. So this measure was passed in compliance with Initiative 21-
0042A1.
On November 8, 2022, there were 14 local special taxes placed on the ballot by citizen initiative. Seven of these
4 Source: Compilation and summary of data from County elections offices.
June 2022 Initiative Special Taxes - majority voter approval
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
John C. Fremont
Healthcare District Mariposa Measure N
Transactions
& Use Tax 1 cent $ 150,000 hospital 40yrs 69.6%PASS
County of Kings Kings Measure F
Transactions
& Use Tax 1/2 cent $ 11,700,000 fire none 37.6%FAIL
Manhattan Beach
USD Los Angeles Measure A
School Parcel
Tax $1095/yr $ 12,000,000 schools 12yrs 31.2%FAIL
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measures failed with less than majority voter approval. The other seven measures received majority, but less than
two-thirds, voter approval. These measures passed under current law but are out of compliance with Initiative 21-
0042A1. Taken together these seven taxes will provide estimated annual revenues of from $900,000 to $1.4
billion in support of parks and recreation, zoo, library, affordable housing, transportation, homelessness
prevention, and schools in these communities.
Non-Specific Tax Durations in 2022
Voters approved 106 measures in June 2022 (10) and November 2022 (96) that do not provide a specific duration
of time that the tax will be imposed (end date). Typically, the ballot titles for these measures state that the tax
would be imposed “until ended by voters.” Four of these measures also did not include any estimate of the annual
revenues that the tax would generate, another violation of initiative 21-0042A1. Taken together, these approved
local measures generate $561 million per year that will expire a year after the effective date of the initiative if
Initiative 21-0042A1 passes.
November 2022 Initiative Special Taxes - majority voter approval
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
Crockett Community
Services District Contra Costa Measure L Parcel Tax $50/parcel $ 60,000 parks/recr none 62.8%PASS
Oakland Alameda Measure Y Parcel Tax $68/parcel $ 12,000,000 zoo 20yrs 62.5%PASS
County of Mendocino Measure O Transactions
& Use Tax
1/8 cent then 1/4
cent in 2027 $ 4,000,000 library none 60.8%PASS
Los Angeles Los Angeles Measure ULA
Property
Transfer Tax
4% if >$5m, 5.5%
if >$10m $600 m to $1.1 b affordable
housing none 57.3%PASS
County of Sacramento Measure A Transactions
& Use Tax same 1/2 cent $ 212,512,500
transportati
on
40yrs 55.3%PASS
San Francisco Proposition M Business
Operations Tax
$2500-$5000/
vacant resid unit $ 20,000,000 housing 30yrs 54.5%PASS
Santa Monica Los Angeles Measure GS
Property
Transfer Tax
$56/$1000 if
>$8m $ 50,000,000
schools,
homelessne
ss, afford.
housing
none 53.3%PASS
Total $900,000 to
$1.4 billion
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
County of Calaveras Measure A Transactions
& Use Tax 1 cent $ 5,000,000 fire none 49.4%FAIL
South San Francisco
(for Schools)San Mateo Measure DD
School Parcel
Tax $2.50/sf $ 55,900,000 schools none 47.2%FAIL
County of Fresno (for CSU ) Measure E
Transactions
& Use Tax
1/5 ct,
1/40 ct (Reedley) $ 36,000,000 Calif State
Univ 20yrs 46.9%FAIL
Santa Cruz Santa Cruz Measure N Parcel Tax $6k/v acant SFU xxx
vacant
property xxx 44.2%FAIL
County of Monterey Measure Q Parcel Tax $49/parcel $ 5,500,000 childcare 10yrs 41.1%FAIL
San Francisco City
College
San
Francisco Measure O School Parcel
Tax $150/sfu $ 37,000,000 schools 10yrs 36.7%FAIL
Morro Bay San Luis
Obispo Measure B Parcel Tax $120+/parcel $ 680,000 harbor none 36.0%FAIL
Inverness Public
Utility District Marin Measure O Parcel Tax
$0.20/sf,
$150/vacant $ 276,000 fire none 27.0%FAIL
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Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Oakland Alameda Measure T
Business Tax
General various $ 20,900,000 none 71.4%PASS
Culver City Los Angeles Measure BL
Business Tax
General various $ 10,000,000 none 60.5%PASS
El Segundo Los Angeles Measure BT
Business Tax
General various $ 3,000,000 none 51.2%PASS
Pico Rivera Los Angeles Measure AB
Business Tax
General various $ 5,800,000 none 75.5%PASS
Santa Ana Orange Measure W
Business Tax
General various neutral none 64.8%PASS
Tracy San Joaquin Measure B
Business Tax
General various $ 3,200,000 none 72.6%PASS
Burlingame San Mateo Measure X
Business Tax
General various $ 2,500,000 none 75.1%PASS
Los Gatos Santa Clara Measure J
Business Tax
General various $ 1,100,000 none 53.4%PASS
Santa Clara Santa Clara Measure H
Business Tax
General
$45/employee,
$15/rental unit $ 6,000,000 none 59.5%PASS
Brisbane San Mateo Measure O
Business Tax
lodging busn $2.50/rm/day $ 250,000 none 69.2%PASS
East Palo Alto San Mateo Measure L
Business Tax
resid. rentals
2.5%
grossRcpts $ 1,480,000 none 69.9%PASS
County of Santa Cruz Unincorporated Measure C
Busn Tax -
disp cups 12.5cents/cup $ 700,000 none 68.2%PASS
South Lake Tahoe El Dorado Measure G
Busn Tax
Cannabis
6% retail,
manufacturing $ 950,000 none 62.9%PASS
McFarland Kern Measure O
Busn Tax
Cannabis
8% of gross
receipts retail, $ 1,800,000 none 63.5%PASS
Avenal Kings Measure C
Busn Tax
Cannabis
$25+/sf or
15% gr rcpts $ 600,000 none 61.8%PASS
Baldwin Park Los Angeles Measure CB
Busn Tax
Cannabis
4%
grossRcpts $ 300,000 none 51.3%PASS
Claremont Los Angeles Measure CT
Busn Tax
Cannabis
4%-7% gr
rcpts, $1- $ 500,000 none 61.1%PASS
County of Los Angeles Unincorporated Measure C
Busn Tax
Cannabis
4% gross
receipts retail, $ 15,170,000 none 60.1%PASS
Cudahy Los Angeles Measure BA
Busn Tax
Cannabis
15%
grossRcpts $ 3,600,000 none 54.0%PASS
El Segundo Los Angeles Measure Y
Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 72.8%PASS
Hermosa Beach Los Angeles Measure T
Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 67.6%PASS
Lynwood Los Angeles Measure TR
Busn Tax
Cannabis 5%to10% $ 3,000,000 none 66.4%PASS
Santa Monica Los Angeles Measure HM Busn Tax
Cannabis
10% gross
Rcpts $ 5,000,000 none 66.4%PASS
South El Monte Los Angeles Measure CM Busn Tax
Cannabis
6% special
excise tax on $ 126,000 none 53.7%PASS
Monterey Monterey Measure J
Busn Tax
Cannabis 6% grossRcpt $ 1,300,000 none 65.2%PASS
Pacific Grove Monterey Measure N
Busn Tax
Cannabis 6% grossRcpt $ 300,000 none 70.8%PASS
Huntington Beach Orange Measure O
Busn Tax
Cannabis
6% retail, 1%
other $ 600,000 none 54.7%PASS
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Notes
?= Ballot measure title did not include an estimate of annual revenues, also not in compliance with Initiative 21-0042A1.
n/a*= Arcadia Measure SW passed but sports betting remains illegal after the failure of Propositions 26 and 27 on the November
statewide ballot.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Laguna Woods Orange Measure T
Busn Tax
Cannabis
4%-10% o f
gross receipts $ 750,000 none 61.1%PASS
Corona Riverside Measure G
Busn Tax
Cannabis
9% of gross
receipts for $ 5,000,000 none 61.6%PASS
Montclair San Bernardino Measure R
Busn Tax
Cannabis
7%
grossRcpts $ 3,500,000 none 70.3%PASS
County of San Diego Unincorporated Measure A
Busn Tax
Cannabis
6% retail, 3%
distribution, $ 5,600,000 none 57.4%PASS
Encinitas San Diego Measure L
Busn Tax
Cannabis
4% to 7% of
gross receipts $ 1,400,000 none 65.1%PASS
Healdsburg Sonoma Measure M
Busn Tax
Cannabis 8% grossRcpt $ 500,000 none 72.7%PASS
Exeter Tulare Measure B
Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 66.5%PASS
Tulare Tulare Measure Y
Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 65.2%PASS
Woodland Yolo Measure K
Busn Tax
Cannabis
10%
grossRcpts ? none 66.2%PASS
Redlands San Bernardino Measure J
Busn Tax
Distrib centers
from $0.047/sf
to $0.105/sf $ 530,000 none 53.5%PASS
Arcadia Los Angeles Measure SW Busn Tax
Sports Betting
5%
grossRcpts n/a* none 63.9%PASS
Albany Alameda Measure K ParcelTax $0.074+/sf $ 1,950,000 fire/EMS none76.0%PASS
Cameron Park Airport
District El Dorado Measure J ParcelTax
by $600 to
$900/parcel $ 117,900 airport/
streets none 78.2%PASS
Highlands Village
Lighting Benefit Zone El Dorado Measure L ParcelTax $140+/parcel $ 10,920 streets none 86.3%PASS
Knolls Property
Owners CSD El Dorado Measure P ParcelTax
by $300+ to
$600+/parcel $ 8,400 streets none 75.5%PASS
Sundance Trail Zone of
Benefit El Dorado Measure C ParcelTax $600+/yr $ 24,000 roads none 73.2%PASS
South Pasadena Los Angeles Measure LL ParcelTax xxx ? library none 86.2%PASS
River Delta Fire District Sacramento Measure H ParcelTax $90/yr $ 130,000 fire none 72.1%PASS
Emeryville Alameda Measure O PropTransfTax
$15/$1000 if
$1m-$2m, $ 5,000,000 none 71.6%PASS
San Mateo San Mateo Measure CC PropTransfTax
by 1% to 1.5%
if >$10m $ 4,800,000 none 71.8%PASS
Alameda Alameda Measure F TOT by 4% to 14% $ 910,000 none 59.2%PASS
Clovis Fresno Measure B TOT by 2% to 12% $ 500,000 none 69.7%PASS
Kerman Fresno Measure G TOT 10% $ 40,000 none 62.3%PASS
Trinidad Humboldt Measure P TOT by 4% to 12% $ 65,000 none 77.6%PASS
Imperial Imperial Measure G TOT by 4% to 12% $ 600,000 none 56.2%PASS
Arcadia Los Angeles Measure HT TOT by 2% to 12% $ 730,000 none 54.1%PASS
Santa Monica Los Angeles Measure CS TOT
by 1%, 3%
home shares $ 4,100,000 none 73.7%PASS
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Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Anaheim Orange Measure J TOT
online travel
companies $ 3,000,000 none 59.2%PASS
La Palma Orange Measure P TOT by 4% to 12% $ 200,000 none 71.1%PASS
Colfax Placer Measure B TOT by 2% to10% $ 29,000 none 73.5%PASS
Rocklin Placer Measure F TOT by 2% to 10% $ 300,000 none 59.8%PASS
Roseville Placer Measure C TOT by 4% to 10% $ 3,000,000 none 73.0%PASS
Big Bear Lake San Bernardino Measure P TOT by 2% to 10% $ 1,300,000 none54.4%PASS
Grand Terrace San Bernardino Measure M TOT new 10% $ 250,000 none 51.9%PASS
Yucca Valley San Bernardino Measure K TOT by 5% to 12% $ 1,300,000 none 71.9%PASS
Imperial Beach San Diego Measure R TOT by 4% to 14% $ 400,000 none 67.4%PASS
El Paso de Robles San Luis Obisp oMeasure F TOT by 1% to 11% $ 750,000 none 61.2%PASS
Belmont San Mateo Measure K TOT by 2% to 14% $ 600,000 none 79.3%PASS
Millbrae San Mateo Measure N TOT by 2% to 14% $ 1,500,000 none 75.8%PASS
County of Humboldt Unincorporated Measure J TOT by 2% to 12% $ 3,080,000 none 63.3%PASS
County of Placer -
North Tahoe TOT Area Measure A TOT by 2% to 10% $ 4,000,000 none 90.0%PASS
County of Santa Cruz Unincorporated Measure B TOT by 1% to 12% $ 2,300,000 none 69.2%PASS
County of El Dorado -
East Slope Tahoe Measure S TOT 2/3 by 4% to 14% $ 2,500,000 none 81.8%PASS
Chico Butte Measure H TrUT 1 cent $ 24,000,000 none 52.4%PASS
Mendota Fresno Measure H TrUT 1.25 cent $ 493,498 none 57.2%PASS
Blue Lake Humboldt Measure R TrUT 1 cent $ 30,000 none 55.4%PASS
Rio Dell Humboldt Measure O TrUT 3/4cent $ 400,000 none 53.3%PASS
County of Kern unincorporated areas Measure K TrUT 1 cent $ 54,000,000 none 50.8%PASS
McFarland Kern Measure M TrUT 1 cent $ 579,662 none 62.2%PASS
Tehachapi Kern Measure S TrUT 1 cent $ 4,000,000 none 57.2%PASS
Avenal Kings Measure A TrUT 1 cent $ 500,000 none 72.5%PASS
Susanville Lassen Measure P TrUT 1 cent $ 1,750,000 none 54.7%PASS
Baldwin Park Los Angeles Measure BP TrUT 3/4 cent $ 6,000,000 none 58.1%PASS
Malibu Los Angeles Measure MC TrUT 1/2 cent $ 3,000,000 none 52.6%PASS
Monterey Park Los Angeles Measure MP TrUT 3/4 cent $ 6,000,000 none 58.5%PASS
Torrance Los Angeles Measure SST TrUT 1/2 cent $ 18,000,000 none 55.0%PASS
Larkspur Marin Measure G TrUT 1/4 cent $ 700,000 none 59.4%PASS
Sand City Monterey Measure L TrUT
by 1/2cent to
1.5cents $ 1,400,000 none 68.7%PASS
Hemet Riverside Measure H TrUT same 1 cent $ 15,000,000 none 58.0%PASS
Elk Grove Sacramento Measure E TrUT 1 cent $ 21,000,000 none 54.1%PASS
Galt Sacramento Measure Q TrUT 1 cent $ 3,600,000 none 52.4%PASS
Colton San Bernardino Measure S TrUT 1 cent $ 9,500,000 none 66.8%PASS
Ontario San Bernardino Measure Q TrUT 1 cent $ 95,000,000 none 53.2%PASS
Solana Beach San Diego Measure S TrUT 1 cent $ 3,000,000 none 66.7%PASS
Brisbane San Mateo Measure U TrUT 1/2 cent $ 2,000,000 none 63.9%PASS
Goleta Santa Barbara Measure B TrUT 1 cent $ 10,600,000 none 64.7%PASS
Solvang Santa Barbara Measure U TrUT 1 cent $ 1,600,000 none 63.1%PASS
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Co-temporal Advisory Measures in 2022
At the November 2022 election, there was just one local general tax measure that was accompanied by an
advisory measure as to the use of funds. The City of Santa Monica’s Measure DT property transfer tax failed with
just 34 percent approval as voters instead chose the citizen initiative Measure GS.
There was also just one such tax use advisory measure on the June 2022 election. Susanville’s voters passed
Measure P, a 1 percent transactions and use (sales) tax that generates $1.75 million per year5 for general city
services. The measure was accompanied by advisory Measure Q, accompanied the city’s It asked, “If Measure P
passes, should the revenues be used to balance the budget to maintain and enhance existing public safety
services (police and fire), and provide funding to support street infrastructure improvements and provide funding
to support economic development efforts designed to increase businesses, jobs and visitors to Susanville?” Both
measures passed. Under Initiative 21-0042A1, the tax will expire a year after the effective date of the initiative
(i.e., in December 2025).
1.b. Additional Costs and Public Service Effects of the Tax Provisions
Assuming a similar volume of local measures through 2024 as we saw in 2022, there will be over 200 local
measures that will need to be redrafted to comply with the Initiative and placed back on the ballot for the taxes to
continue after December 2025. The costs of re-drafting, re-placing and re-voting on these measures, previously
legally approved by voters, will be in the tens of millions in total statewide.
2. “Exempt Charges” (fees and charges that are not taxes) and Services Threatened
With regard to fees and charges adopted after January 1, 2022, Initiative 21-0042A1:
Subjects new fees and charges for a product or service to a new "actual and reasonable test."
Subjects fees and charges for entrance to local government property; and rental and sale of local
government property to a new, undefined, “reasonable” test.
Allows legal challenge to any tax adopted before the effective date of the initiative and after January 1,
5 The Susanville measure also did not include a specific end date and so is included in the list and totals of those measures.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Watsonville Santa Cruz Measure R TrUT 1/2 cent $ 5,000,000 none 64.4%PASS
Vallejo Solano Measure P TrUT 7/8 cent $ 18,000,000 none 54.7%PASS
Modesto Stanislaus Measure H TrUT 1 cent $ 39,000,000 none 62.8%PASS
County of Colusa Measure A TrUT 2/3 1/2 cent $ 2,400,000 EMS none 69.4%PASS
Atwater Merced Measure B TrUT 2/3 same 1 cent $ 4,000,000 police/fire none 73.7%PASS
Truckee Nevada Measure U TrUT 2/3
by 1/4 cent to
1/2 cent $ 3,000,000 open space
/ trails none 76.4%PASS
Palo Alto Santa Clara Measure L UtilityTransfer 18% gas $ 7,000,000 none 77.7%PASS
Santa Clara Santa Clara Measure G UtilityTransfer 5 % $ 30,000,000 none 84.2%PASS
Hercules Contra Costa Measure N UUT 8% $ 3,600,000 none 69.3%PASS
Carson Los Angeles Measure UU UUT 2% electr, gas $ 8,000,000 none 78.4%PASS
Sebastopol Sonoma Measure N UUT 3.75% (same) $ 700,000 none 83.5%PASS
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2022. Such a lawsuit could enjoin (stop) the enactment of the tax pending the outcome of the legal
challenge.
Subjects a challenged fee to new, higher burdens of proof if legally challenged.
2.a. Value on New Local Government Fees and Charges at Risk6
Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and
charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to
new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges
imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local
government fee and charge revenue placed at risk is about $2 billion per year including those adopted since
January 1, 2022. Of $2 billion, about $900 million (45 percent) is for special districts, $800 million (40
percent) is cities, and $300 million (15 percent) is counties.7
Major examples of affected fees and charges are:
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund
community safety, code enforcement, and neighborhood cleanup programs.
3. Emergency response fees - such as in connection with DUI.
4. Advanced Life Support (ALS) transport charges.
5. Business improvement district charges.
6. Fees for processing of land use and development applications such as plan check fees, use permits,
design review, environmental assessment, plan amendment, subdivision map changes.
7. Document processing and duplication fees.
8. Facility use charges, parking fees, tolls.
9. Fines, penalties.
10. Fees for parks and recreation services.
2.b. Additional Costs and Public Service Effects of the Fee/Charge Provisions
In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there
would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure
financing more difficult and will deter new residential and commercial development.
***********
mc
6 Source: California State Controller Annual Reports of Financial Transactions concerning cities, counties and special districts,
summarized with an assumed growth due to fee rate increases (not population) of 2 percent annually.
7 School fees are also affected but the amount is negligible by comparison.
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Examples of fees and charges that are impacted by CBRT
o Category #1 (Products and Services). Examples 1:
• Property development application processing fees
• Plan Review
• Gas and electricity service charges
• Parks and Recreation classes and lessons
• Child care services
• Jail booking fees
• Copies of police reports
• Emergency services fees
o Category #2 (Regulatory and Licensing Activity). Examples:
• Building permit fees
• Sales tax audits
• Abatement of weeds on private property
• Conducting inspections of rental housing
• Fire inspections
o Category #3 (Entrance to or use of local government property, or the
purchase, rental or lease of local government property. Examples 2:
• Lease of city museum to non-profit organization
• Use of Council Chambers by private groups
• Use/lease of city-owned convention center
• Use/lease of city-owned park or other recreation area
o Category #4 (Fines and penalties for administrative Code enforcement)3
o Category #5 (Charges imposed as a condition of property development)4
o Category #6 (Charges covered by Proposition 218 – SEE BELOW)
o Category #7 (Charges for specific health care services)
1 Amount must be “reasonable” and may not exceed “actual” (minimum) cost.
2 Amount must be “reasonable
3 Adds requirement for undefined adjudicatory process
4 No fee based upon vehicle miles traveled (VMT)
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2
Proposition 218 fees, charges, and assessments: Exception #6 (examples)
• Water rates
• Sanitary sewer rates
• Flood protection/water run-off charges
• Refuse rates
• Landscape and lighting assessments
• Downtown Business Improvement District assessments
• Parking District assessments
• Flood control assessments
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