‘Right to Vote on Taxes’ Case Now Before California Supreme Court

Last week the California Supreme Court agreed to hear a case that could determine whether the right to vote on local taxes, which is constitutionally guaranteed by both Propositions 13 and 218, will cease to exist.

The case, California Cannabis Coalition v. City of Upland, at first glance seems limited to a narrow technical question: When a local initiative seeks to impose a new tax, does the issue need to be put to the voters at the next general election or can the proponents, relying on other laws, force a special election? But in answering that question, the lower court ruled that taxes proposed by initiative are exempt from the taxpayer protections contained in the state constitution, such as the provision dictating the timing of the election.

The Howard Jarvis Taxpayers Association (HJTA), which filed the petition seeking Supreme Court review, was alarmed because the constitution’s taxpayer protections include the right to vote on taxes. If local initiatives are exempt from those protections, then public agencies could easily deny taxpayers their right to vote on taxes by colluding with outside interests to propose taxes in the form of an initiative, then adopting the initiative without an election.

The import of the case was not lost on those who dislike Proposition 13’s requirement that local special taxes – those imposed for specific purposes – receive a two-thirds vote of the local electorate. For example, backers of a tax to subsidize a new sports arena in San Diego were hoping that the lower court ruling would allow them to impose a special tax with only a simple majority vote.

Some legal scholars suggested that the lower court decision was not as far-reaching as feared by HJTA. But the fact that the Supreme Court granted review, which it does in only a fraction of cases it receives, validates the concern about the potential scope of the lower court ruling.

By way of background, the case began when the California Cannabis Coalition (CCC) circulated an initiative petition to legalize medical marijuana dispensaries in the City of Upland. The initiative requires each dispensary to pay the City an annual $75,000 tax. CCC collected enough signatures to qualify for a special election. But a provision of Proposition 218, the Right to Vote on Taxes Act, part of the California Constitution approved by voters in 1996, requires tax proposals to be presented at a general election for city council candidates. (This forces candidates to identify for or against the tax, which helps voters choose the taxpayer-friendly candidates.)

The Court of Appeal ruled that taxes proposed by a local initiative are not subject to Proposition 218. The ruling, however, was not limited to Proposition 218’s election date requirement. The Court said taxes proposed by initiative are exempt from all of 218.

HJTA, having sponsored Proposition 218, was so concerned by the decision, it offered to represent the City of Upland at no cost to take the case to California’s highest court. It was HJTA’s petition on behalf of the City of Upland that was granted.

Taxpayers of all stripes and interests will be watching this case very closely. California is already a hostile place for taxpayers so losing the right to vote on local taxes would simply be adding to the pain.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.