Will It Become Easier to Raise Taxes in California?

California taxpayers and Proposition 13 are under attack this fall as never before.

Two proposed constitutional amendments would make it easier to raise taxes, and harder for taxpayers to do anything about it.

Assembly Constitutional Amendment (ACA) 1 and ACA 13 were passed by the Legislature last year, each securing the two-thirds vote from lawmakers that moved them forward to the ballot for voter approval, where they need 50% plus one vote to pass.

ACA 1 is a direct attack on Proposition 13, changing Prop. 13’s requirement for a two-thirds vote of the electorate to pass special taxes. (Special taxes are those from which the funds are reserved for a specific purpose, as opposed to general taxes that may be used for any purpose.) Instead of the 66.7% vote now required by Prop. 13, special taxes for “infrastructure” and public housing projects would pass with just 55% of the vote.

“Infrastructure” is defined very loosely. It’s a term that covers almost everything the government does, even including taxpayer bailouts of failing public transit systems.

If ACA 1 passes in November, the measure specifies that every special tax of this type on the ballot at the same time will be declared passed with just 55% of the vote, even if voters were told these taxes needed a two-thirds vote.

Watch your local government closely in the coming months. Sometime before the end of June, your city council, county board of supervisors or one of many local special districts may quickly approve a proposed tax increase for the November ballot.

It’s a good idea to go to the website of the city clerk or county elections office to sign up for email notifications of election-related announcements. If you act quickly, you may have time to submit an argument against the tax increases to be published in the voter information guide that is sent to all registered voter households.

The second legislative constitutional amendment proposal on the November ballot, ACA 13, is an outrageous attempt to block our own Taxpayer Protection and Government Accountability Act from passing.

Ever since California’s first handwritten constitution in 1849, constitutional amendments have needed a simple majority of the electorate to pass, 50% plus one vote. ACA 13 would change that, but only for initiatives that protect taxpayers.

Hard to believe, but true.

ACA 13 says that if an initiative constitutional amendment says taxes need a two-thirds vote to pass, then the initiative itself must get a two-thirds vote to pass.

It’s a special standard of extra difficulty, to make it harder to protect taxpayers from a relentless barrage of tax increases.

Even Proposition 13 itself, although overwhelmingly approved by voters in 1978, did not quite get to the two-thirds threshold. If ACA 13 had been law at that time, Prop. 13 would not have passed, and countless families would have been taxed out of their property by the surging inflation that has driven up home prices.

Before Prop. 13, property taxes in California were a statewide average 2.67% of the current market value of your home or other property, every year. Prop. 13 capped the annual increase in assessed value so that it could not go up more than 2% per year, no matter how much the market price had jumped due to inflation. Prop. 13 also cut the tax rate to 1%. (See our Guessing Game calculator at GuessingGame.org to find out what your property taxes would be today if Prop. 13 had never passed.)

ACA 13 is aimed at ensuring that whenever courts use their own interpretation of the law to make it easier to raise taxes, taxpayers are virtually blocked from ever passing an initiative like Prop. 13 again.

Not by coincidence, there happens to be such a measure on the November ballot. The Taxpayer Protection and Government Accountability Act (TPA) would restore the two-thirds vote requirement for local special taxes. This is needed because courts have “interpreted” that tax increases proposed by a “citizens’ initiative” can pass with just 50% plus one vote. Special interest groups up and down the state are now collecting signatures for local tax increase measures that mostly benefit themselves.

If ACA 13 passes (it needs 50% plus one vote, like every other constitutional amendment in California history), it would go into effect immediately. That means the TPA would need 66.7% to pass instead of 50% plus one vote.

As you can read in “The Legal Front” column in this issue of Taxing Times, there’s one more outrageous effort to prevent the TPA from passing. The governor and the Legislature have filed a lawsuit demanding that the TPA be removed from the November ballot before voters have the opportunity to pass it.

HJTA is fighting that lawsuit (thanks to the Howard Jarvis Taxpayers Foundation), and HJTA will be fighting to defeat ACA 1 and ACA 13, as well as to pass the Taxpayer Protection Act (thanks to the Protect Prop. 13 committee). Thank you for your support of the Foundation and the PP13 committee as well as the Howard Jarvis Taxpayers Association itself.

We couldn’t do it without you.