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Tax Law

Let Them Fight: California Court of Appeal Holds Voter-Initiated Local Special Taxes Not Subject to Constitutional Two-Thirds Supermajority Voting Requirement

On June 30, 2020, a California Court of Appeal affirmed a trial court decision that held the California Constitution’s requirement that local taxes be approved by a supermajority vote does not apply to taxes imposed by voter initiative. For background on the case and coverage of the trial court’s decision, see our prior Legal Alert.

The Court first addressed the claim that Article XIIIA, section 4 of the Constitution, which provides that “Cities, Counties and special districts” may impose certain special taxes “by a two-thirds vote of the qualified electors of such district,” applies to voter initiated taxes. The Court concluded that this provision “does not repeal or otherwise abridge by implication the people’s power to raise taxes by initiative, and to do so by majority vote.” Next, the Court addressed the argument that Article XIIIC, section 2(d), which precludes a “local government” from imposing, extending or increase a special tax absent approval by a two-thirds vote, likewise applies to taxes proposed by voter initiative. The Court rejected this argument as well, applying the reasoning of the California Supreme Court in California Cannabis Coalition v. City of Upland (a case interpreting a similar provision of the state Constitution) and concluding that the text of Article XIII, section 2 applies only to actions taken by local government.

There are several “Upland” cases currently pending before various California courts challenging, or seeking validation of, voter initiatives passed by a simple majority. This is the first appellate decision, likely priming it to be appealed to the California Supreme Court and giving that court a chance to clarify its decision in Upland.