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Tax Law

California Court Approves of Simple Majority Vote for Special Taxes Proposed by Voter Initiative

On May 11, a San Francisco trial court held that the California Constitution allows special local taxes proposed by voter initiative to be enacted with a simple majority vote, in contrast to the two-thirds vote required for special taxes proposed by local government. The ballot initiative in question imposed a $298 per parcel tax and was approved by 60% of San Francisco voters. The City brought an action to validate the tax and a City resident challenged, arguing that the California Constitution requires approval from two thirds of voters rather than a simple majority. The trial court’s decision rejecting the claim closely tracks two July 2019 decisions rendered by the same trial court ruling that a simple majority vote is sufficient. Separate trial courts in Fresno and Alameda Counties have reached the opposite conclusion, ruling in September 2019 and November 2019 respectively, that the two-thirds vote requirement applies to all special local taxes, whether proposed by voter initiative or local government. The earlier cases from San Francisco, Fresno, and Alameda Counties are currently on appeal, and it is expected that this most recent decision by the San Francisco County Superior Court will also be appealed.

The trial court held that the case presented an additional “novel” claim, namely the taxpayer’s claim that the initiative was really the City’s initiative and not a true voter initiative because the San Francisco Unified School District and the United Educators of San Francisco were involved in creating the initiative. The Court rejected this argument, noting that such activity is commonplace and is not prohibited by the San Francisco Charter or California’s Elections Code. Taxpayers argued that this effectively blesses local government efforts to end-run around the two-thirds vote requirement otherwise applicable to local government initiatives by styling such initiatives as voter initiatives.

City and County of San Francisco v. All Persons Interested in the Matter of Proposition G, No. CGC-18-569987 (Cal. Sup. Ct. May 11, 2020).