Professor Joel Fox on CA Supreme Court Ruling on Provision of Prop 218 - Changes in Imposing Local Taxes | Los Angeles Times
Op-Ed: California's Supreme Court is wrong: Voters want to make it hard — not easy — to raise taxes
Joel Fox | August 31, 2017 | Los Angeles Times
The California Supreme Court ruled Tuesday that tax limitations imposed by Proposition 218 in 1996 don’t cover taxes enacted by ballot initiatives. Justice Mariano-Florentino Cuéllar wrote in the majority opinion that unlike Ulysses, who in Homer’s “Odyssey” tied himself to the mast to avoid the Sirens’ tempting song, voters did not tie themselves down when it comes to raising taxes.
The more appropriate image from the “Odyssey” would be the one-eyed Cyclops. The court’s decision represents a ridiculously narrow vision of what was intended by Proposition 218.
The issue before the court in California Cannabis Coalition vs. City of Upland was whether a measure dealing with fees and taxes related to medical marijuana dispensaries could appear on a special election ballot when Proposition 218 expressly calls for tax measures to be voted on in general elections. However, in making its decision, the court potentially allowed for much more than changes in the timing of votes. It broadly declared that Proposition 218’s restrictions on taxation only applied to local governments. Initiatives brought by the people could therefore have a wider berth to impose taxes.
Immediately, some observers conjectured that 218’s requirement of a two-thirds vote for “special taxes” could be ignored. Instead of demanding 66% of the vote to raise taxes specifically to fund, say, a sports stadium, or police functions, or housing for the homeless, all that would be required was a simple majority vote.
For a long time, tax-increase advocates have wanted to do away with the two-thirds vote for special taxes; earmarked sales taxes and parcel taxes are easier to pass than general taxes, removing the two-thirds hurdle makes the effort easier still. The court’s decision not only opens that door, it also means local governments working in collusion with special interests that desire more taxpayer dollars can get their way through an initiative.
The court majority emphasized differences between a government vote to raise taxes and a citizens’ initiative but, as Jon Coupal, president of the Howard Jarvis Taxpayers Assn. (which defended Proposition 218 in the case), said, “The peoples’ use of the initiative process is stepping into the shoes of local government.”
The dissenting opinion also made this point. Justice Leondra R. Kruger wrote: “A tax passed by voter initiative, no less than a tax passed by vote of the city council, is a tax of the local government, to be collected by the local government, to raise revenue for the local government.”
For those who want to keep taxes in check, there is yet another danger in the majority opinion. It cites a state statute that says if 15% of the city voters have signed an initiative petition, the city government can adopt the proposed ordinance without alteration.
Does the court really mean to allow a government body to approve an initiative for a new tax merely because it gains the required number of petition signatures? Such a result would certainly be against the heart and soul of what the voters intended when they passed taxation limits with 218. If city or county representatives were to try such a move, it would be litigated.
Proposition 218 found its way onto the California ballot after a series of local government machinations raised revenue from taxpayers without their consent. One of the outrages was related to another California Supreme Court decision, Knox vs. City of Orland, in 1992. That decision allowed for assessments on properties to help pay for a park in Glenn County, even though those properties were too far away for the owners to benefit from the park. After the Knox decision, one attorney said, “Assessment districts are now limited only by the limits of human imagination.”
The latest California Supreme Court ruling just may get those imaginations going all over again.
Joel Fox was president of the Howard Jarvis Taxpayers Assn. from 1986 to 1998. He is co-publisher of the website Foxandhoundsdaily.com and teaches public policy at Pepperdine University.