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For decades, it’s been an article of political faith – as well as law – that local government taxes designated for particular purposes require two-thirds approval by voters.

Dan Walters
CALmatters
Two years ago, however, the state Supreme Court seemingly carved out a way for local governments to sidestep that law. It implied, in ruling on a Southern California marijuana case, that if special purpose tax measures are placed on the ballot by initiative petition, rather than by the local governments themselves, the two-thirds vote threshold might not apply.
Ever since, those who want to raise local taxes have yearned to learn whether the Supreme Court really meant to make an exception and, not surprisingly, San Francisco’s very liberal city government, acting on the advice of City Attorney Dennis Herrera, volunteered to become the legal guinea pig.
Members of the city’s governing body, its Board of Supervisors, personally sponsored two tax increase initiatives last year, one for the June election and another in November, both listed on the ballot as “Proposition C.”
City Began Collecting Taxes, but Not Spending Them
The June measure, a tax on commercial rents to finance early childhood education and child care services, received 51 percent voter support. The November proposal, a tax on businesses to finance services and housing for the homeless, garnered 61 percent voter support.
With both votes below two-thirds, opponents of the measures sued, contending that they were invalid. The city began collecting the taxes, but not spending them, while the legal battle raged.
Last week, San Francisco Superior Court Judge Ethan Schulman agreed with Herrera and validated both taxes. However, he doesn’t have the last word. Business and anti-tax groups, such as the Howard Jarvis Taxpayers Association, vowed “an immediate appeal” and the issue is clearly headed to the state Supreme Court for a definitive ruling.
A third San Francisco tax measure, also placed by initiative petition and receiving a simple majority approval from voters in 2018, is also being contested. Proposition G imposes a new “parcel tax” on homes and other real estate to increase teacher pay.
Were the state’s highest court to convert its 2017 implication into declarative law, it would almost completely change the dynamics of local tax battles.
Rather than propose special purpose taxes directly, local officials and their political allies, especially public employee unions, could do it via initiative petition and completely bypass the long-standing supermajority vote requirement.
Another Wrinkle to the Situation
There is, however, another wrinkle to the situation.
Last year, as the San Francisco tax measures were being challenged, the state Supreme Court issued another decision that could affect the eventual outcome.
Logically, if Sanders was under that legal obligation as an official while sponsoring a ballot measure, then members of the San Francisco Board of Supervisors also were acting officially, and not as ordinary citizens, when they sponsored their tax measures. If so, their measures probably should have been subject to the supermajority rule.
It will be interesting to see how the court balances one ruling with the other, if it can, with financial stakes astronomically high in the outcome.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.
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