California May Have Just Made It Easier for Cities to Hike Taxes

Ballot initiatives may be permitted to ignore two-thirds vote rule. Prepare for corruption.


Hin255 / Dreamstime

A decision this week by California's Supreme Court might make it easier for local governments to levy taxes.

Note the use of the word "might."

A 5-2 opinion by the state's Supreme Court yesterday throws the rules for ballot initiatives into confusion, suggesting initiatives put forth by private parties may require only a majority vote to pass, rather than the two-thirds California law required for decades for both private and city-led proposals.

It's not entirely clear how far-reaching the court's ruling is. But if the broadest interpretation is applied, the potential impacts are obvious and huge: Suddenly it's a whole lot easier for private interests to get tax increases and new fees passed to take money from others for their own pet interests.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, is already preparing for the worst, telling the San Diego Union-Tribune, "This is a significant decision that will lead to unbridled collusion between local governments and special interest groups."

The state Supreme Court case involves a ballot initiative introduced by California Cannabis Coalition, a medical marijuana group, in Upland. The group asked that the city's ban on dispensaries be repealed. That sounds good, right? But it also introduced a permitting process and significant license and inspection fees. Protectionism via fees—that's bad! Upland determined those fees triggered the two-thirds requirement. The marijuana group challenged that requirement in court.

It's worth noting the ballot initiative failed to get even majority support, but the court decided to consider the underlying claim that these types of ballot initiatives should not be held to the two-thirds requirement.

There is a sense in the majority decision that because these ballot initiatives originate from "the people" rather than city governments, they should not be subject to the tougher threshold.

But, of course, "the people" do not regularly embark on massive quests to raise their neighbors' taxes. "Citizen" initiatives that increase taxes or introduce fees are frequently introduced and pushed by those who would stand to benefit from the revenue that's brought in. They're no more neutral or "democratic" than those proposed by city leaders.

The most glaring example is that of publicly financed professional sports stadiums, the example news outlets point out when considering the possible consequences of this ruling. San Diego citizens were asked to vote to raise taxes just last fall to build a new stadium for the Chargers. They said no.

Often, city leaders and the private interests are on the same side in these kinds of cases. City leaders try to sell stadiums to citizens as economic development while sports team owners pocket the subsidies. These tax initiatives are not the result of some group of football fans organizing at tailgate parties. It's cronyism. With the right marketing, this court ruling actually makes local corruption easier.

It's also very easy to imagine public employee union groups using this mechanism to try to raise taxes and fees to fund their growing pension debt. Democratic State Sen. Scott Wiener says the change will make it easier for cities to more easily fund local schools and transportation needs. What we really see is that tax increases go right into the pension money pit and don't actually fund improvements at all.

Judge Leondra R. Kruger noted in her dissent essentially that a tax doesn't become more pure or democratic simply because it was levied via a voter initiative. It's still taking money from citizens and giving it to the city: "A tax passed by voter initiative, no less than a tax passed by vote of the city council, is a tax of the local government, to be collected by the local government, to raise revenue for the local government."

Coupal says he's going to try to amend the state's constitution to require a two-thirds vote for citizen initiatives concerning increasing taxes or creating new fees.

Given the state's Democratically controlled legislature, he'll probably have to bypass them with a citizen ballot initiative himself. Fortunately, he'll only have to get a support from the majority of voters.

NEXT: North Korea Fires Another Missile Over Japan, to Predictable Responses

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The group asked that the city’s ban on dispensaries be repealed. That sounds good, right? But it also introduced a permitting process and significant license and inspection fees. Protectionism via fees?that’s bad!

    But it comes with a free frogurt!

    1. Permitting & fees are better than a total ban. What’s the worst you could get?nobody getting permission? That’s no worse than a ban. If anybody does get permission, that’s better than nobody.

      If the only way to get the votes to get rid of a ban is restrictions, so be it. That’s usually the way things go: gradual increase in freedom.

  2. Come on, how can raising taxes ever be a bad thing? And it’s not like California already has high taxes. Compared to Northern Europe they barely have any taxes at all. {derp}

  3. City budgets:
    New York, New York 8,405,837 Bill de Blasio (D) $73,000,000,000
    San Francisco, California 837,442 Edwin M. Lee (D) 9,700,000,000
    3rd and 4th:
    Los Angeles, California 3,884,307 Eric Garcetti (D) $8,100,000,000
    Chicago, Illinois 2,718,782 Rahm Emanuel (D) $7,300,000,000 Largest_cities_in_the_ United_States_by_population

    I seem to see a lot of (D)s there…

    1. Chicago has a smaller budget than SF?! That’s hard to believe.

      1. Apples and Oranges in that CA cities, and their schools, are separate entities, unlike many cities and schools in the East which have a unified structure/budget where everyone reports to City Hall.

    2. If you do that Per Capita then SF is impressively far ahead of NY. Almost 1/3 more spending per citizen.

      1. Uh, to be clear, more taxing, not necessarily more spending on the citizens; see political perks.

        1. Sure, I did not mean to imply that this went back to the citizens, just that they spent that amount per capita.

    3. Also, I don’t know if you value this, but if you want to embed a hyperlink do the following:

      < a href="Put the link URL here" > Put the text you want to highlight here < /a >
      Here is your link for example

      1. Sevo is far too old to learn html.

        1. I’ve learned and forgotten the html contraction several times and finally decided I don’t use it often enough so the hell with it.

          1. That’s the spirit!

        2. HTML is so old. All you need now is a hashtag.

          1. #


    4. It’s not exactly shock, considering Democrats control the city government of almost every large city (plus their platform).

      As an LA resident, I’m not exactly a fan of the local government here, but I have to say we aren’t doing that bad relative to SF and NYC. Slightly over $2,000 in spending per capita compared to about $9,000 in NYC and over $11,000 in SF.

  4. Handy reminder that our initiative system can always get worse.

    1. Handy reminder that our initiative system can always get worse.

      Well, I suppose that they could move us to a new d20 system where the lower numbers indicate who acts first, and where the Dexterity modifier is subtracted from the original roll rather than added to it, and we add modifiers for weapon speed, spell casting time, particular non-combat actions, et cetera.

      I think that would complicate the process and quite effectively confuse players familiar with Pathfinder and the 3.0, 3.5, 4th, and 5th D&D editions.

      When 6th edition is inevitably launched the new initiative system could be something completely different.


  5. Proposition 13 really devastated California’s budgets.

    1. Clearly.

    2. Prop 13 is merely proof that politicians will never learn to live within their means

  6. Ballot initiatives are a goofy progressive-era bit of nonsense that proves that the people should get what they want–and good and hard.

    It’s like everybody voting on dinner–we’d all eat Pizza Hut with Bud Lite every night.

    1. Zeb wouldn’t last a week.

  7. Can the rest of the country vote to declare California seceded?

    1. Yeah, I’m on board with that. It’s also a reason why I don’t want to invade N. Korea. I mean, if a nuke hits California, what is lost…really?

        1. If the southern hemisphere can fill my grocery store with strawberries and asparagus in December, it can certainly pick up California’s slack.

    2. Well, of course ….. didn’t the Pelosi/Reid Congress tell us that they could “deem” virtually anything no matter what the Constitution had to say about it.

  8. So bureaucrats shakes with their left hand?

  9. Leaving for NV a year ago sure looks better and better.
    However, if …. oops ….. when the local pols start taxing homeowners out of their houses in defiance of the vote at the polls, CA could just see another “Rose Bird” revolt by the voters in not confirming SC justices for retention.
    A little metaphorical “watering” of the Tree of Liberty.

Please to post comments

Comments are closed.