The California Supreme Court issued its decision in California Cannabis Coalition v. City of Upland on August 28, and caused quite a stir in the world of local taxes. The decision, to uphold an appellate court ruling, was that constitutional restrictions on taxation by local governments did not apply to citizen initiatives. While the case was focused on the City's decision to submit a citizen's initiative to voters at the next general election instead of calling a special election, as the initiative proponents requested, it was widely viewed to extend to all constitutional restrictions, including the requirement for 2/3 voter approval of special (i.e. for an intended purpose) taxes.

 

Assembly Member Chad Mayes and a number of his Republican colleagues in the Assembly have introduced a constitutional amendment in the Legislature to "fix" the loophole, ACA 19.  ACA 19 would place a constitutional amendment on the ballot for voter approval to clarify that the term "local government" also includes the electorate exercising its initiative power. ACA 19 was introduced at the end of the legislative session and has not yet had a policy committee hearing in the Legislature. (Constitutional amendments are not subject to the same legislative deadlines as regular bills.) Given the need for a 2/3 vote of the Legislature to approve constitutional amendments and the Democratic supermajority in both houses, it is unlikely that ACA 19 will be successful in 2018.

 

Generally, citizen's initiatives to raise local taxes are rare, but a test case is certainly waiting to get clarity on the Court's viewpoint on vote thresholds, specifically. Noted city attorney and Proposition 218 expert Michael Colantuono suggests that the more narrow reading of the decision is warranted; his article for California City News is available here. Check out Dan Walters' commentary on the issue and an accompanying CalMatters piece here for more information and background.