CC - Item 5A - Adopt Resolution No. 2023-15 Opposing the Taxpayer Protection and Government Accountabliity Act Ballot MeasureROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: BEN KIM, CITY MANAGER
DATE: MARCH 14, 2023
SUBJECT: ADOPT RESOLUTION NO. 2023-15 OPPOSING THE TAXPAYER
PROTECTION AND GOVERNMENT ACCOUNTABILITY ACT BALLOT
MEASURE
SUMMARY
The City Council will consider adopting a resolution in opposition to the Taxpayer Protection and
Goverment Accountability Act, a California Business Roundtable (CBRT) initiative which has
qualified for placement on the November 5, 2024, general election ballot. The measure, if
approved, would amend the California Constitution to restrict the ability of the state, counties,
other local agencies, and the electorate to approve or collect taxes, fees, and other revenues.
Therefore, it is recommended that the City Council adopt Resolution No. 2023-15 opposing the
Taxpayer Protection and Government Accountability Act ballot measure.
The California Business Roundtable (CBRT) has sponsored a proposed constitution initiative to
restrict voters' input and local taxing authority. The CBRT is an association comprised of the
largest corporations in California. Upon review of filed documentation, the Attorney General
issued the title and summary on February 3, 2022, for what is now commonly referred to as the
Taxpayer Protection and Government Accountability Act (AG# 21-00421A1). This action then
allowed the initiative's proponents to start the signature gathering process. On February 1, 2023,
the California Secretary of State's office verified the signatures and qualified the measure for the
November 2024 ballot.
In 2017, a similar initiative was proposed, and signatures were gathered in 2018 for what at the
time was referred to as the "Tax Fairness, Transparency and Accountability Act" (AG# 17-0050
Amendment #1). At the time, proponents aimed to qualify the initiative for the November 2018
ballot. Much like the initiative being proposed now, the measure would have drastically limited
local revenue authority. Through the successful work and advocacy of the League of California
Cities and a broad coalition of organizations, the measure's proponents withdrew the initiative
from the ballot in June 2018. Similarly, these advocacy groups strongly oppose the Taxpayer and
Government Accountability Act.
AGENDA ITEM 5.A
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Prior ballot initiatives approved by California voters such as Proposition 13 (1978), Proposition
62 (1986), Proposition 218 (1996), and Proposition 26 (2010) already limited state and local
governments abilities to create new taxes or increase existing ones. The Taxpayer Protection and
Government Accountability Act adds and expands restrictions on voters and local government tax
and fee authority.
THE TAXPAYER PROTECTION AND GOVERNMENT ACCOUNTABILITY ACT
The Taxpayer Protection and Government Accountability Act would amend the California
Constitution to restrict the ability of the state, counties, other local agencies, and the electorate to
approve or collect taxes, fees, and other revenues. It would require voter approval of all state taxes,
would further restrict local fee authority by limiting it to the "minimum amount necessary" to
provide government services, and would require voter approval for local measures such as
franchise fees. Its provisions would make it easier to challenge local revenue measures by
increasing the burden of proof on local agencies while disallowing an agency's characterization of
a measure from being considered by the court. The following summarizes the impact of the
measure on local government entities.
Taxes
• For State and local governments, it broadens the definition of tax to include some current
fees charged by the state and local governments to users of certain services. By changing
a fee to a tax, said new tax will now have to be approved by 2/3 of the members of a
legislative body and a majority of the voters participating in the general election.
• Taxes and fees adopted after January 1, 2022, that do not comply with the new rules, are
void unless reenacted.
• Approval of local general and special taxes:
o A tax proposed by an elector or governing body must be first approved by 2/3 majority
vote of the governing body.
o For general purpose taxes, it requires the same as above and approval of a majority of
voters.
o For special taxes, which proceeds are for specific purposes, the initiative requires that
it must also be approved by a 2/3 majority vote of the governing body and a 2/3 voter
majority.
o It also mandates that the approval of a tax increase ordinance be placed on a general
election and not be submitted to the voters in a special election unless the local
legislative body unanimously declares an emergency and approves the placement of
the measure. Voters could still place a tax measure for voters' consideration and will
only require the approval of a majority of the voters participating in the election.
• The initiative will require tax measures to identify the duration of the tax and any sunset
date, the amount of revenues expected to be raised, and the specific uses of those revenues.
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If the tax revenues are to be used for general purposes, then the measure must explicitly
indicate that revenues will be used for "unrestricted general revenue purposes." These
requirements will apply to state and local taxes.
• Any subsequent changes to the purposes of revenues collected via state taxes will have to
be approved by a 2/3 majority vote of a legislative body and a majority vote of the
electorate. For local governments, a 2/3 majority approval of the local legislative body and
2/3 voter majority approval will be required.
Fees
For increasing state and local government fees, the initiative also proposes raising the
approval threshold. Specifically:
o For the state, any increases of fees will require a 2/3 majority vote of the
Legislature, and state departments and agencies will no longer be able to increase
fees via an administrative decision.
o For local government, any increases of fees will require a 2/3 majority vote of a
local legislative body. The measure also provides for the repealing of locally
adopted fees via referenda. Fees approved after January 1, 2022, and the effective
date of the measure would need to meet such approval threshold within 12 months;
otherwise, they would be invalidated until the fees are reenacted following the
requirements of this initiative.
• For some new and existing fees, the measure requires the fee to "be reasonable" and closely
reflect the actual costs to the state or local government. If a fee payer challenges the cost
of the fee, state and local governments will be required to provide clear and convincing
evidence that the levy is a fee and not a tax, which would otherwise be subject to the new
requirements mandated by the initiative.
Restrict authority of state and local governments to issue fines and penalties for violations of
law.
Requires voter approval of fines, penalties, and levies for corporations and property owners
that violate state and local laws unless a new, undefined adjudicatory process is used to
impose the fines and penalties.
FISCAL IMPACT OF THE INITIATIVE ON STATE AND LOCAL GOVERNMENTS
The California Legislative Analyst's Office (LAO), a non-partisan agency that provides an
analysis on a range of issues, including the annual budget proposed by the Governor, ballot
initiatives as this one, and other relevant proposals considered by the Legislature.
In its November 22, 2021, letter to California Attorney General Rob Bonta, the LAO states that
about ninety percent of California's $225 billion budget is derived from revenues collected via
taxes and fees. In its analysis, the LAO finds that the initiative could lead to "potentially
substantially lower annual state and local revenues, depending on future actions of the Legislature,
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March 14, 2023
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local government bodies, voters, and the courts." The LAO arrives to this conclusion based on the
following:
• Lower State Tax and Fee Revenue: The expanded definition of tax and the higher threshold
for approval of new taxes will make it harder for the state to collect revenues. Programs
that are funded by fees could see the most significant impacts.
• Lower Local Government Tax and Fee Revenue: Same as above, the expanded definition
of taxes and the new, higher approval threshold will make it harder for local governments
to raise revenues.
• Possible Increased State and Local Governments Administrative Costs Related to
Calculation of Actual Costs for Setting Fees: As the new measure requires that fees closely
relate to actual costs, state and local governments will have to develop methodology to
analyze actual costs and calculate fees. This methodology and the fees themselves could
be subject to litigation, which in and of itself will also require the state and local
governments to invest resources to defend its methodologies and decisions.
IMPACT OF THIS INITIATIVE ON ROSEMEAD
As a local government, the City of Rosemead adopts an annual budget that includes the expenditure
of revenues collected via fees, and a variety of taxes derived from local sales taxes, property taxes,
etc. As a general law city, the City imposes fees and approves new taxes following the laws of the
State of California. In the case of fees associated with the provision of services, the City adopts
and revises such fees, annually, via the approval of an annual fee resolution. Fees are closely
associated with the City's prorated costs of providing a service or benefit to a user that is not
otherwise provided to everyone. The fee is intended as a means for the City to recover the cost of
providing such benefit to a user. For instance, when a homeowner remodels a kitchen and installs
new plumbing fixtures, the plumbing permit fee includes the cost associated with staffs time that
will be spent on reviewing the request and conducting an inspection of the work performed by a
licensed plumber.
If some of the fees included in the annual fee resolution were to be challenged, and the courts were
to find that certain fees should be treated as taxes pursuant to the initiative, the Rosemead City
Council would be required to approve with a 2/3 majority the placement of a tax measure at a
general election and a majority of the voters participating in the election will be required to pass
the measure.
RESPONSE TO INITIATIVE BY CALIFORNIA CITIES
During its December 23, 2021, meeting, the League of California Cities Board of Directors voted
unanimously to oppose Initiative 21-0042A1. Following the Board's unanimous decision, a
coalition of public safety, labor, local government, and infrastructure advocates have joined
together to fight against this measure. Cal Cities is requesting local jurisdictions adopt a resolution
to demonstrate how harmful this measure would be to local communities and the people of
California. If passed, Initiative 21-0042A1 has the potential to jeopardize vital local and state
services by risking billions of dollars currently dedicated to critical services and potentially forcing
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March 14, 2023
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cuts to public schools, fire and emergency medical response, law enforcement, public health,
parks, libraries, affordable housing, services to support homeless residents, mental health services,
and more. It also has the potential to reduce funding for critical infrastructure like streets, roads,
public transportation, drinking water, new schools, sanitation, and utilities.
STAFF RECOMMENDATION
It is recommended that the City Council determine that this item is exempt under the California
Environmental Quality Act ("CEQA") and adopt Resolution 2023-15 (Attachment A) opposing
the voter Initiative No. 21-0042A1 (Taxpayer Protection and Government Accountability Act).
FISCAL IMPACT
There is no fiscal impact associated with the requested action.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental Quality Act
("CEQA"), and it can be seen with certainty that it will have no impact on the environment. As
such, this matter is exempt under CEQA.
STRATEGIC PLAN IMPACT
If this initiative gains voter approval, it may hinder the City's ability to successfully finance many
of the goals and objectives within the 2030 Strategic Plan.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Attachment A: Resolution No. 2023-15
Submitted by:
/t�
Michael Bruckner, Assistant City Manager
Attachment B:
Initiative 21-0042A1
Attachment C:
CBRT Measure Opposition Summary Sheet
Attachment D:
CBRT Fiscal and Program Analysis
Attachment E:
LAO Fiscal Analysis
Attachment F:
CBRT Board Members
Attachment G:
Letter of Opposition
Attachment A
Resolution No. 2023-15
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A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ROSEMEAD, CALIFORNIA, IN
OPPOSITION TO INITIATIVE 21-0042A1, THE
TAXPAYER PROTECTION AND GOVERNMENT
ACCOUNTABILITY ACT
WHEREAS, a group of wealthy corporations and individuals, in collaboration with
organizations that seek to reduce government fees and taxes have filed documents with the
California Attorney General's (AG) office with the intent of securing title and summary for a
statewide ballot measure; and
WHEREAS, following State law, the AG prepared title and summary upon the
proponents' request; the AG's title is LIMITS ABILITY OF VOTERS AND STATE AND
LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES.
INITIATIVE CONSTITUTIONAL AMENDMENT; and
WHEREAS, the initiative, which proponents have named "the Taxpayer Protection and
Government Accountability Act" broadens the definition of tax to include some current fees
charged by the state and local governments to users of certain services. By changing a fee to a tax,
said new tax will now have to be approved by 2/3 of a legislative body and a majority of the voters
participating in the general election; and
WHEREAS, the initiative will require tax measures to identify the duration of the tax and
any sunset date, the amount of revenues expected to be raised and the specific uses of those
revenues. If the tax revenues are to be used for general purposes, then the measure must explicitly
indicate that revenues will be used for "unrestricted general revenue purposes". These
requirements will apply to state and local governments taxes; and
WHEREAS, for increasing local government fees, the initiative requires the affirmative
vote of a 2/3 majority of a local legislative body. The measure also provides for the repealing of
locally adopted fees via referenda; and
WHEREAS, the initiative requires voter approval of fines, penalties, and levies for
corporations and property owners that violate state and local laws unless a new, undefined
adjudicatory process is used to impose the fines and penalties; and
WHEREAS, according to an analysis by the League of California Cities (CalCities), "the
initiative puts at risk billions of dollars currently dedicated to critical state and local services. It
could also force cuts to public schools, fire and emergency medical response, law enforcement,
public health, parks, libraries, affordable housing, services to support homeless residents, mental
health services, and more. It could also reduce funding for critical infrastructure like streets and
roads, public transportation, drinking water, new schools, sanitation, and utilities"; and
WHEREAS, the nonpartisan California Legislative Analyst's Office (LAO), sent a letter
to Attorney General Rob Bonta on November 22, 2021, which states that the initiative could lead
to "potentially substantially lower annual state and local revenues, depending on future actions of
the Legislature, local government bodies, voters, and the courts".
WHEREAS, if some of the fees included in the City's annual fee resolution were to be
challenged, and the courts were to find that certain fees should be treated as taxes pursuant to the
initiative, the Rosemead City Council would be required to approve with a 2/3 majority the
placement of a tax measure at a general election and a majority of the voters participating in the
election will be required to pass the measure; and
THEREFORE, BE IT RESOLVED that the City Council of the City of Rosemead opposes
Initiative 21-0042A1 — the Taxpayer Protection and Government Accountability Act.
THEREFORE, BE IT FURTHER RESOLVED, that the City of Rosemead will join the NO on
Initiative 21-0042A1 coalition, a growing coalition of public safety, labor, local government,
infrastructure advocates, and other organizations throughout the state.
We direct staff to email a copy of this adopted resolution to the League of California Cities at
BallotMeasureskcalcities.org.
PASSED, APPROVED, AND ADOPTED this 28d day of February, 2023.
Sean Dang, Mayor
G\ a7Z6110015:11Iloilo] :Ru �&My:691
Rachel Richman, City Attorney Ericka Hernandez, City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) §
CITY OF ROSEMEAD )
I, Ericka Hernandez, City Clerk of the City Council of the City of Rosemead, California,
do hereby certify that the foregoing City Council Resolution No. 2023-15, was duly adopted
by the City Council of the City of Rosemead, California, at a regular meeting thereof held
on the 28th day of February, 2023, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Ericka Hernandez, City Clerk
Attachment B
Initiative 21-0042A 1
BELL,
MCANDREWS & HILTACHR, LLP
ATTORNEYS AND COUNSELORS AT LAW
455 CAPITOL MALL, SUITE 600
SACRAMENTO, CALIIORNIA 95BI4
(916) 442-7757
FAX (916) 442-7759
www.bmhlaw.wm
January 4, 2022
Anabel Renteria
Initiative Coordinator
Office of the Attorney General
State of California
PO Box 994255
Sacramento, CA 94244-25550
Re: Initiative 21-0042 - Amendment Number One
Dear Initiative Coordinator:
21 -0042 Ama#I
RECEIVED
JAN 0 4 2022
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please
find Amendment #1 to Initiative No. 21-0042 "The Taxpayer Protection and
Government Accountability Act." The amendments are reasonably germane to the
theme, purpose or subject of the initiative measure as originally proposed.
I am the proponent of the measure and request that the Attorney General
prepare a circulating title and summary of the measure as provided by law, using the
amended language.
Thank you for your time and attention processing my request.
Sincerely,
0i✓�
Thomas W. Hiltachk
2 1- 0 0 4 2 Amdt- #/
The Taxpayer Protection and Government Accountability Act
[Deleted codified text is denoted in stAkeeut. Added codified text is denoted by italics and underline.]
Section 1. Title
This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability
Act.
Section 2. Findings and Declarations
(a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline
tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest
in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state
politicians In 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes
and fees.
(b) Taxes are only part of the reason for California's rising cost -of -living crisis. Californians pay billions
more in hidden "fees" passed through to consumers in the price they pay for products, services, food,
fuel, utilities and housing. Since 2010, government revenue from state and local "fees' has more than
doubled.
(c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and
homelessness, they are the pushing working families and job -providing businesses out of the state. The
most recent Census showed that California's population dropped for the first time in history, costing us a
seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not
counting thousands more small businesses that were forced to move, sell or close.
(d) California voters have tried repeatedly, at great expense, to assert control over whether and howtaxes
and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what
passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These
measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition
26 (2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and
accountability, have been weakened and hamstrung by the Legislature, government lawyers, and the
courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court
decisions.
Section 3. Statement of Purpose
(a) In enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes
by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees
and other charges are passed or rejected by the voters themselves or a governing body elected by voters
and not unelected and unaccountable bureaucrats.
(b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency
and accountability over higher taxes and charges by requiring any tax measure placed on the ballot—
either at the state or local level—to clearly state the type and rate of any tax, how long it will be in effect,
and the use of the revenue generated by the tax.
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new
or increased form of state government revenue, by any name or manner of extraction paid directly or
indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the
Governor to ensure that the purposes for such charges are broadly supported and transparently debated.
(d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that
taxpayers have the right and ability to effectively balance new or increased taxes and other charges with
the rapidly increasing costs Californians are already paying for housing, food, childcare, gasoline, energy,
healthcare, education, and other basic costs of living, and to further protect the existing constitutional
limit on property taxes and ensure that the revenue from such taxes remains local, without changing or
superseding existing constitutional provisions contained in Section 1(c) of Article XIII A.
(e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two-
thirds vote and voter approval requirements for government revenue increases created by the courts
including, but not limited to, Cannabis Coalition v. Cjty of Upland, Chamber of Commerce v. Air Resources
Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v.
Orange County Local Agency formation Commission, and Wilde v. City of Dunsmuir.
Section 4. Section 3 of Article XIII A of the California Constitution is amended to read:
Sec. 3(a) Every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt
charge.
b 1 W Any change in state statute law which results in any taxpayer paying a new or higher tax must
be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature, and submitted to the electorate and approved by a majority vote, except that no new
ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be
imposed. Each Act shall include:
(A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected
to be derived from the tax.
(B) Aspecific and legally binding and enforceable limitation on how the revenue from the tax can be spent.
if the revenue from the tax can be spent for unrestricted general revenue purposes, then a statement that
the tax revenue can be spent for "unrestricted general revenue purposes" shall be included in a separate,
stand-alone section Any proposed chance to the use of the revenue from the tax shall be adopted by a
separate act that is passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature and submitted to the electorate and approved by a maiority vote.
(2) The title and summary and ballot label or question reguired for a measure pursuant to the Elections
Code shall for each measure orovidina for the imposition of a tax, including a measure Proposed by an
elector pursuant to Article 11, include:
(A) The tvoe and amount or rate of the tax;
8) The duration of the tax: and
(C) The use of the revenue derived from the tax.
(c) Any change in state law which results in any taxpayer oaWna a new or higher exempt charge must be
imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of
exempt charge as provided in subdivision (e), and the amount or rate of the exempt charge to be imposed.
11{4 As used in this section and in Section 9 of Article 11, "tax" means everva" levy, charge, or exaction
of any kind imposed by the State state law that is not on exempt charge.
(e) As used in this section, exempt charoe" means only the following:
ti) (24 A reasonable charge imposed for a speck government service or product provided directly to the
payor that is not provided to those not charged, and which does not exceed the reaseaable actual costs
to the State of providing the service or product to the payor.
j11(- j A charge imposed -for the reasonable regulatory costs to the State incident to issuing licenses and
permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and
the administrative enforcement and adjudication thereof.
(3) A levy, charge, or exaction collected from local units of government, health care providers or health
care service plans that is primarily used by the State of California for the purposes of increasing
reimbursement rates or payments under the Medi -Cal program, and the revenues of which are primarily
used to finance the non-federal portion of Medi -Cal medical assistance expenditures.
(4) A reasonable charge imposed for entrance to or use of state property, or the purchase, rental, or lease
of state property, except charges governed by Section 15 of Article X1.
(5) A fine, or penalty, ^- ^t`^- Fseinietai:y ehaW including any applicable interest for nonpayment thereof,
imposed by the judicial branch of government or the State, as a resm" a state administrative
enforcement agency pursuant to adiudicatory due process, to punish a violation of law.
(6) A levy, charge assessment or exaction collected for the promotion of California tourism pursuant to
Chapter S (commencing with Section 139951 of Part 4.7 of Division 3 of Title 2 of the Government Code.
ff(e)Any tax or exempt charge adopted afterJanuary 1,10112919, but prior to the effective date of this
act, that was not adopted in compliance with the requirements of this section is void 12 months after the
effective date of this act unless the tax or exempt charge is reenacted by the ' egislatwii! ^^" sigRe "^•^
law by the GoverneF in compliance with the requirements of this section.
&&11 1,44 The State bears the burden of proving by a ^-^^^^•'^-^^ce of the clear and convincing evidence
that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of
proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that
the amount charged does not exceed the actual cost of providing the service or product to the pavor. r4hg
.n!,. bUFdens on, ,.n. 6nnptg m ,.,d ft ffien
, n •heRtBl aML,ity
(2) The retention of revenue by. orthe paymentto. a non-governmental entity of a levy, charae, orexaction
of any kind imaosed by state law, shall not be a factor in determining whether the levy, charge, or exaction
is a tax or exempt charge.
(3) The characterization of a levy, chose, or exaction of any kind as beina voluntary, or paid in exchange
for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the
levy, charge, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether
the levy, charge, or exaction is o tax or exempt charge.
(h) As used in this section:
(1) Actual cost" of Providing a service or product means: (i) the minimum amount necessary to reimburse
the government for the cost of Providing the service or product to the pavor, and (ii) where the amount
charged is not used by the government for any purpose other than reimbursing that cost. In computing
"actual cost" the maximum amount that may be imposed is the actual cost less all othersources of revenue
including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to
provide such service or product.
(2) "Extend" includes, but is not limited to, doing any of the following with respect to a tax or exempt
charge: lengthening its duration, delaying or eliminating its expiration, expandina its application to a new
territory or class of pavor, or expanding the base to which its rate is applied.
(3) !moose" means adopt enact, reenact create, establish, collect, increase or extend.
(4) "State law" includes, but is not limited to, any state statute, state regulation, state executive order,
state resolution, state rulina, state opinion letter, or other legal authority or interpretation adopted,
enacted, enforced, issuedor implemented by the legislative or executive branches of state government.
"State law" does not include actions taken by the Regents of the University of California. Trustees of the
California state University, or the Board of Governors of the California Community Colleges.
Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
(a) 'Actual cost" of providing a service or product means: (il the minimum amount necessary to reimburse
the government for the cost of providing the service or Product to the pavor. and (ii) where the amount
charged is not used by the government for any purpose other than reimbursing that cost In computina
"actual cost" the maximum amount that may be imposed is the actual cost less all othersources ofrevenue
Including, but not limited to taxes other exempt charges, grants, and state or federal funds received to
provide such service or product.
(bl Extend" includes, but is not limited to, doina an of the following with respect to a tax, exempt charoe,
or Article X111 D assessment fee, or charge: lengthening its duration, delaying or eliminating its expiration,
expanding its application to a new territory or class of payor or expanding the base to which its rote is
applied.
LrLW "General tax" means any tax imposed for general governmental purposes.
(d) "Impose" means adopt, enact, reenact create, establish, collect, increase, or extend.
(eL(W "Local government" means any county, city, city and county, including a charter city or county, any
special district, or any other local or regional governmental entity, or an elector pursuant to Article 11 or
the initiative power provided by a charter or statute.
(fl "Local law" includes, but is not limited to, any ordinance, resolution, regulation, ruling, opinion letter,
or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local
government.
&J_(e) "Special district" means an agency of the State, formed pursuant to general law or a special act, for
the local performance of governmental or proprietary functions with limited geographic boundaries
including, but not limited to, school districts and redevelopment agencies.
(hL(4) "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific
purposes, which is placed into a general fund.
(i2 (e! As used in this article, and in Section 9 of Article Il. "tax" means every any -levy, charge, or exaction
of any kind, imposed by a local geveMpent low that is not an exempt charie.; emeept the fellowinW.
(i) As used in this section, "exempt charge" means only the following:
1..,.,..-...., ....,......,... -e.._, _ - .,..._.. --" ..__ _..____ ,.- . .__._ ---" __ _.._ ._-. a_._......_.._
(24 A reasonable charge (rnpesed for a specific local government service or product provided directly
to the payor that is not provided to those not charged, and which does not exceed the Masenable actual
costs to the local government of providing the service or product.
(2) W A charge impesed for the reasonable regulatory costs to a local government for issuing licenses and
permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and
the administrative enforcement and adjudication thereof.
(31(4J A reasonable charge impesed for entrance to or use of local government property, or the purchase,
rental, or lease of local government property.
i4J W A fine; or penalty, OF etheF FAeAetaFy e including any applicable interest for nonpayment
thereof imposed by the judicial branch of government or a local government administrative enforcement
agency pursuant to adiudicatory due process, asp result of to Punish a violation of law.
M W A charge imposed as a condition of property development. No levy, charge, or exaction reaulatina
or related to vehicle miles traveled may be imposed as a condition of Property development or occupancy.
(6) JA An Assessme^•^ and pFopeF"• ^^late•' `• es assessment fee, orcharae'
the pm%Olsiens of subjectto Article XI I I D, Oran assessment imposed upon a business in a tourism marketing
district a parking and business improvement area or a property and business improvement district.
(7) A charge imposed for a specific health care service provided directly to the savor and that is not
provided to those not charged, and which does not exceed the reasonable costs to the local government
of providing the health care service. As used in this paragraph, a "health care service" means a service
licensed or exempt from licensure by the state pursuant to Chapters 1.1.3, or 2 of Division 2 of the Health
and Safety Code.
,
481 ether exai;41en Is not a W7 that the ameimt ii; A8 FARM th;IR seeessapt is eeveF the "W" �131- 69-15 Of
Section 6. Section 2 of Article XIII C of the California Constitution is amended to read:
Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) Every levy, charge, or exaction of any kind imposed by local law is either a tax or an exempt charge. All
taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special
purpose districts or agencies, including school districts, shall have no power to levy general taxes.
(b) No local law eoveFAMSK whether proposed by the governing body or by an elector, may impose,
extend, or increase any general tax unless and until that tax is submitted to the electorate and approved
by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not
higher than the maximum rate so approved. The election required by this subdivision shall be consolidated
with a regularly scheduled general election for members of the governing body of the local government,
except in cases of emergency declared by a unanimous vote of the governing body.
(c)
OF afteF jaRU8Pt 1, 199S, and pFier te the eflesthw date of thin aFtiele, shall remii;ue to be imposed ORP,'
if a ed by a majerity vote of the ,.t,. voting in an eleetle an the issue of the iffiPOSWEIA, .,ho&
eleetmeR shall be he'd wMin twe YeaFs ez ` "ve date ef this aFtme'e and iR eampliai:ise wkk
subdivisien(b)-(d) No local low geveFRFnePA whether Proposed by the governing body or by an elector,
may impose, exteAd, BF iAGFeaSS any special tax unless and until that tax is submitted to the electorate
and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is
imposed at a rate not higher than the maximum rate so approved.
(d) The title and summary and ballot label or question required for a measure Pursuant to the Elections
Code shall, for each measure providing for the imposition of a tax, include:
(1) The type and amount or rate of the tax.,
(2) the duration of the tax, and
(3) The use of the revenue derived from the tax. If the proposed tax is a general tax, the phrase "for general
government use" shall be reguired and no advisory measure may appear on the some ballot that would
indicate that the revenue from the general tax will could or should be used for a specific Purpose
(e) Only the governing body of a local government other than an elector pursuant to Article Il or the
initiative Power provided by a charter or statute shall have the authority to impose any exempt charoe.
The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charoe
as provided in Section i(i) and the amount or rate of the exempt charge to be imposed, and passed by the
governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (p of
Section 1.
(f) No amendment to a Charter which Provides for the imoosition, extension, or increase of a tax or exempt
charge shall be submitted to or approved by the electors, nor shall any such amendment to a Charter
hereafter submitted to or approved by the electors become effective for any purpose.
(a) Any tax or exempt ch urge adopted after January 1 2022 but prior to the effective date of this act that
was not adopted in compliance with the requirements of this section is void 12 months after the effective
date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this
section.
(h)(1) The local government bears the burden of proving by clear and convincing evidence that a levy,
charoe or exaction is an exempt charge and not a tax. The local government bears the burden of Proving
by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount
charged does not exceed the actual cost of Providina the service or product to the pavor.
(2) The retention of revenue by, or the payment to, a non-governmental entity of levy, charoe, or exaction
of any kind imposed by a local law. shall not be a factor in determining whether the levy. charoe, or
exaction is a tax or exempt charge.
(3) The characterization of a levy, charge, or exaction of any kind imposed by a local law as being paid in
exchange for a benefit, privilege, allowance, authorization, or asset, shall not be factors in determining
whether the levy, charoe, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether
the levy, charge, or exaction is a tax or exempt charge.
Section 7. Section 3 of Article X111 D of the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited
(a) No tax, assessment, fee, eF charge, orsurcharge, including a surcharge based on the value of Property.
shall be assessed by - any agery y upon any parcel of property or upon any personas an incident of property
ownership except:
(1) The ad valorem property tax impesed PUFSMaRt to described in Section Ila) of Article XIII and Section
1(a) ofArticle Xlll A and described and enacted pursuant to the voter approval requirement in Section 1(b)
oLArticle XIII A.
(2) Any special non -ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4
of Article XIII A or after receiving a two-thirds vote of those authorized to vote in a community facilities
district by the Legislature pursuant to statute as it existed on December 31, 2021.
(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article.
(b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed
charges or fees imposed as an incident of property ownership.
Section 8. Sections 1 and 14 of Article XIII are amended to read:
Sec.1 Unless otherwise provided by this Constitution or the laws of the United States:
(a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value
standard other than fair market value is prescribed by this Constitution or by statute authorized by this
Constitution, the same percentage shall be applied to determine the assessed value. The value to which
the percentage is applied, whether it be the fair market value or not, shall be known for property tax
purposes as the full value.
(b) All property so assessed shall be taxed in proportion to its full value.
(c) All proceeds from the taxation of Property shall be apportioned according to law to the districts within
the counties.
Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district
in which it is situated. Notwithstanding any other provision of law. such state or local property taxes shall
be apportioned accordina to law to the districts within the counties
Section 9. General Provisions
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (1) In the event that this initiative measure and another initiative measure or measures relating to state
or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other
revenue measures shall appear on the same statewide election ballot, the other initiative measure or
measures shall be deemed to be in conflict with this measure. In the event that this initiative measure
receives a greater number of affirmative votes, the provisions of this measure shall prevail in their
entirety, and the provisions of the other initiative measure or measures shall be null and void.
(2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the
provisions of the "Housing Affordability and Tax Cut Act of 2022" and `The Tax Cut and Housing
Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain
real property, and where the revenue derived from the tax is provided to the State, rather than retained
in the county in which the property is situated and for the use of the county and cities and districts within
the county, in direct violation of the provisions of this initiative.
(3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other
conflicting initiative measure approved by the voters at the same election, and such conflicting initiative
is later held invalid, this measure shall be self-executing and given full force and effect.
C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause,
sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any
court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this
Act. The People of the State of California hereby declare that they would have adopted this Act and each
and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not
declared invalid or unconstitutional without regard to whether any portion of this Act or application
thereof would be subsequently declared invalid.
D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal
challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse
to defend this Act, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 of Title 2 of the
Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully
and vigorously defend this Act on behalf of the State of California.
(2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise
due diligence in determining the qualifications of independent counsel and shall obtain written
affirmation from independent counsel that independent counsel will faithfully and vigorously defend this
Act. The written affirmation shall be made publicly available upon request.
(3) A continuous appropriation is hereby made from the General Fund to the Controller, without regard
to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully
and vigorously defend this Act on behalf of the State of California.
(4) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association,
from intervening to defend this Act.
Attachment C
CBRT Measure Opposition
Summary Sheet
LEAGUE OF
CALIFORNIA
CITI ES
The Taxpayer Protection and Government Accountability Act
Initiative No. 21-0042A1
Feb. 1, 2023
Effective date: Any new or increased tax or fee adopted by the Legislature, a
city council, or the local voters after January 1, 2022, must comply with the Act's
new rules.
Voters
• Local advisory measures are prohibited. No measure may appear on the
ballot asking for approval of a general tax that would allow the voters to
express a preference for how the revenue from the general tax will, could, or
should be used.
• Overturns Upland decision which upheld a special tax that had been placed
on the ballot by the voters to be approved by a majority vote. Taxes
proposed by initiative will be subject to the some rules as taxes placed on the
ballot by a city council.
Voters may not amend a city charter to impose, extend, or increase a tax or
fee.
Local taxes
• Requires voter approval in order to apply an existing tax:
o to territory that is annexed.
o to a new service or product, for example when a utility user tax is
applied to a new service.
• All new or increased taxes adopted after Jan. 1, 2022, must include a sunset
date.
State taxes
• All new or increased state taxes require statewide voter approval.
• Prohibits a property tax "surcharge" (increase). Prohibits any allocation of
property tax to the state.
I This is a summary of some of the more significant provisions of the Act. Please review the Act for
a complete understanding of the changes it makes to the Constitution.
LEAGUE OF
CALIFORNIA
CITIES
Fees and charges
• Fees and charges for services and permits may not exceed the "actual cost"
of providing the product or service for which the fee is charged. "Actual
cost" is the "minimum amount necessary." Examples include planning
services, excavation and encroachment permits, preparation of candidate
statement, and permit parking.
• State and cities have the burden of proving by "clear and convincing
evidence" that a fee/charge is not a tax, that the amount is reasonable, and
that it does not exceed "actual cost."
• Franchise fees — historically considered fees, not taxes — will more likely be
considered taxes due to the elimination of an existing category of "fee" and
the requirement that charges to entrance, purchase, rental, or lease of
government property be "reasonable." The state and cities issue franchises to
oil companies, utilities, gas companies, railroads, garbage companies, cable
companies, and other corporations.
• No fee or charge or exaction regulating vehicle miles traveled can be
imposed as a condition of property development or occupancy.
Fines and penalties (administrative enforcement of state law and municipal
codes)
• May require voter approval of fines and penalties for corporations and
property owners that violate state and local laws unless a new, undefined
adjudicatory process is used to impose the fines and penalties. Examples
include nuisance abatement, organic waste reduction requirements, and
failure to maintain a vacant property.
Attachment D
CBRT Fiscal and Program Analysis
Ca I I I 0 rn aCI't y FI na nc e.Co m Rev. January 14, 2023
Fiscal and Program Effects of
Initiative 21-0042A1 on Local Governments
If Initiative 21-0042A1 is placed on the ballot and passed by voters, it will result in:
• Over $20 billion of local government fee and charge revenues over 10 years placed at heightened legal
peril. Related public service reductions across virtually every aspect of city, county, special district, and
school services especially for drinking water, sewer sanitation, and public health and safety.
• About $2 billion of revenues each year from fees and charges adopted after January 1, 2021 subject to
legal peril.'
• Over $2 billion dollars of annual revenues from dozens of tax measures approved by voters between
January 1, 2022 and the effective date of the act2 subject to additional voter approval if not in compliance
with the initiative.
• Indeterminable legal and administrative burdens and costs on local government from new and more
empowered legal challenges, and bureaucratic cost tracking requirements.
• The delay and deterrence of municipal annexations.
• Substantially higher legal and administrative cost of public infrastructure financing which will delay and
deter new residential and commercial development.
• Service and infrastructure declines including in fire and emergency response, law enforcement, public
health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing,
homelessness prevention and mental health services.
1. Local Government Taxes and Services Threatened
With regard to taxes, Initiative 21-0042A1:
• Prohibits advisory, non-binding measures as to use of tax proceeds on the same ballot.
o Voters may be less informed and more likely to vote against measures.
• Eliminates the ability of special tax measures proposed by citizen initiative to be enacted by majority voter
approval (Upland).'
o Because the case law regarding citizen initiative special taxes approved by majority vote (Upland)
is so recent, it is unknown how common these sorts of measures might be in the future. This
initiative would prohibit such measures after the effective date of the initiative. Any such
measures adopted after January 1, 2022 through the effective date of the Act should it pass
would be void a year after the effective date of the initiative.
• Requires that tax measures include a specific duration of time that the tax will be imposed. This seems to
require that all tax increases or extensions contain a sunset (end date).
o This would require additional tax measures to extend previously approved taxes.
• A city charter may not be amended to impose, extend, or increase a tax might interfere with the ability of
cities that do not already have such authority in their charters to adopt Property Transfer Taxes.
o There are no more than a few of these every few years, but it is a valuable tax for those that
adopt it.
I Assumes fee increases since January 1, 2022 would be subject to possible legal challenge if not adopted in compliance with the
Initiative.
2 The effective date of the initiative would be sometime in December 2024, the date the California Secretary of State certifies the
election results of the November 5, 2024 election.
3 Unlike the initiative 17-0050, this initiative does not eliminate that ability of cities and counties to adopt general taxes by majority
voter approval.
2217 Isle Royale Lane • Davis, CA • 95616-6616
Phone: 530.758.3952 • Fax: 530.758.3952
-2— rev January 14, 2023
• Requires that a tax measure adopted after January 1, 2022 and before the effective date of the initiative
that was not adopted in accordance with the measure be readopted in compliance with the measure or
will be void twelve months after the effective date of the initiative.
If past election patterns and elections in 2022 are an indication, over 200 tax measures approving
more than $2 billion annual revenues to support local public services would not be in compliance
and would be subject to reenactment. Most will be taxes without a specific end date and special
taxes (including parcel taxes). Because there is no regularly scheduled election within the 12
months following the effective date of the initiative, the measures would each require declaration
of emergency and unanimous vote of the governing board to be placed on a special election
ballot within a year for approval or the tax will be void after that date. I would expect most to
succeed, but some will not, in particular citizen initiative majority vote special taxes which would
have to meet a higher voter approval threshold to continue.
• Requires voter approval to expand an existing tax to new territory (annexations). This would require
additional tax measures and would deter annexations and land development in cities.
o If a tax is "extended" to an annexed area without a vote after January 1, 2022, it will be void 12
months later until brought into compliance. Because there is no regularly scheduled election
within the 12 months following the effective date of the initiative, such extensions would each
require unanimous vote of the agency board to be placed on a special election ballot or would be
void a year later.
1.a. Number of Measures and Value of Local Taxes at Risk`
Over a hundred local measures were approved in 2022 that likely do not comply with the provisions of Initiative
21-0042A1. Nearly $2 billion of annual revenues from these voter approved measures will cease a year after the
effective date of the measure, reducing the local public services funded by these measures. We can expect a
similar volume of measures in 2024 and a similar volume of non-compliance. So the combined total of annual
local funding directly affected by Initiative 21-0042A1 due to its retroactivity provision is about $4 billion.
Citizen Initiative Special Taxes in 2022.
Special taxes placed on the ballot by citizen initiative and approved after January 1, 2022 by a majority but less
than two-thirds of the voters are out of compliance with Initiative 21-0042A1.
On June 7, 2022, there were three local special tax measures placed on the ballot by citizen initiative. Two failed
to get majority voter approval. A one percent transactions and use tax (sales tax) for the John C. Fremont
Healthcare District in Mariposa County received 69.6 percent approval, over the two thirds needed for any special
tax under California Constitution Article XIIIC. So this measure was passed in compliance with Initiative 21-
0042A1.
June 2022 Initiative Special Taxes - majority voter approval
Estimated
Agency Name Court Tax/Fee Rate Annual Revenue Use Sunset YES%
John C. Fremont Mariposa MeasureN Transactions I cent $ 150,000 hospital 40yrs 69.6% PASS
Healthcare District & Use Tax
County of Kings Kings Measure F Transactions 1/2 cent $ 11,700,000 the none 37.6% FAIL
& Use Tax
Manhattan Beach Los Angeles Measure A School Parcel $1095/yr $ 12,000,000 schools 12yrs M.2% FAIL
USD Tax
On November 8, 2022, there were 14 local special taxes placed on the ballot by citizen initiative. Seven of these
4 Source: Compilation and summary of data from County elections offices.
CaliforniaCityFinancexo m
-3— rev January 14, 2023
measures failed with less than majority voter approval. The other seven measures received majority, but less than
two-thirds, voter approval. These measures passed under current law but are out of compliance with Initiative 21-
0042A1. Taken together these seven taxes will provide estimated annual revenues of from $900,000 to $1.4
billion in support of parks and recreation, zoo, library, affordable housing, transportation, homelessness
prevention, and schools in these communities.
November 2022 Initiative Special Taxes - majority voter approval
Estimated
Agency Name County Tax/Fee Rate Annual Revenue Use Sunset YES%
Crockett Cot
Services District Contra Costa Measure L Parcel Tax S50/parcel $60,000 parks/recr none 62.8% PASS
Oakland Alameda MeasureY Parcel Tax $68/parcel $12,000,000 zoo 20yrs 625% PASS
County of Mendocino Measure O
Transactions
1/8 cent then 1/4
$ 4,000,000
libran
none
60.8% PASS
10yrs
& Use Tax
cent in 2027
County
Measure0
Tax/Fee
Rate
Los Angeles Los Angeles Measure ULA
Property
4%if>$5m, 5.5%
$600 in to$1.1b
affordable
none
573% PASS
Transactions
Transfer Tax
1f>$]Om
fire
housing
49.4% FAIL
Morro Bay
County of Sacramento Measure
Transactions
same l/2 cent
$212,512,500
transportati
40yrs
553% PASS
36.0°/FAIL
& Use Tax
San Mateo
Measure DD
School Parcel
$2 50/sf
$ 55,900,000
San Francisco PropositionM
Business
$2500-$5000/Operations
(for Schools)
housing
30yrs
545% PASS
$020/s
Tax vacant resid unit
fire
none
27.o^/O FAIL
CountyofFresno (for
CSU)
Measure
Transactions
1/5 ct,
schools,
schools,
Calif State
20yrs
Santa Monica Los Angeles Measure GS
Property
$56/$1000 if
homelessne
none
533% PASS
Univ
Transfer Tax
>S8111S50'�'�
Santa Cruz
ss, afford.
Measure
Parcel Tax
S6k/vacant SFU
xxx
vacant
xxc
housing
County of Monterey
Measure Q
Parcel Tax
$49/parcel
Estimated
childcare
10yrs
41.1% FAIL
Agency Name
County
Measure0
Tax/Fee
Rate
Annual Revenue
Use
Sunset
YES%
County of Calaveras
Francisco
Measure A
Transactions
(cent
$5,000,000
fire
none
49.4% FAIL
Morro Bay
San Luis
MeasureB
&Use Tax
$120+/parcel
$680,000
harbor
none
36.0°/FAIL
South San Francisco
San Mateo
Measure DD
School Parcel
$2 50/sf
$ 55,900,000
schools
none
47.2% FAIL
(for Schools)
Marin
MeasureO
Tax
$020/s
$276,000
fire
none
27.o^/O FAIL
CountyofFresno (for
CSU)
Measure
Transactions
1/5 ct,
$36000000
Calif State
20yrs
46.9% FAIL
&Use Tax
1/40 ct(Reedley)
Univ
Santa Cruz
Santa Cruz
Measure
Parcel Tax
S6k/vacant SFU
xxx
vacant
xxc
44.2% FAIL
County of Monterey
Measure Q
Parcel Tax
$49/parcel
$ 5,500,000
childcare
10yrs
41.1% FAIL
San Francisco City
San
Measure0
School Parcel
$I50/sfu
$37,000,000
schools
]Oyrs
36.7% FAIL
College
Francisco
Tax
Morro Bay
San Luis
MeasureB
Parcel Tax
$120+/parcel
$680,000
harbor
none
36.0°/FAIL
Obispo
Inverness Public
Marin
MeasureO
Parcel Tax
$020/s
$276,000
fire
none
27.o^/O FAIL
Utility District
$150/vacant
Non -Specific Tax Durations in 2022
Voters approved 106 measures in June 2022 (10) and November 2022 (96) that do not provide a specific duration
of time that the tax will be imposed (end date). Typically, the ballot titles for these measures state that the tax
would be imposed "until ended by voters." Four of these measures also did not include any estimate of the annual
revenues that the tax would generate, another violation of initiative 21-0042A1. Taken together, these approved
local measures generate $561 million per year that will expire a year after the effective date of the initiative if
Initiative 21-0042A1 passes.
CaliforniaCityFinance.com
-4—
Measures in 2022 with Non -Specific Durations
rev January 14, 2023
E Segundo
Los Angeles
Measure BT Business Tax
various
Annual
none 51.2% PASS
Agency Name
County
Tax/Fee Rate
Revenue
Use Sunset YES%
Oakland
Alameda
Measure Business Tax
various
$20,900,000
none 71.4% PASS
$2,50/mi/day
$ 250,000
General
Measure O
Busn Tax
Culver City
Los Angeles
Measure BL Business Tax
various
$10,000,000
none 60.5% PASS
Measure L
Business Tax
General
$ 1,480,000
none 69.90/. PASS
E Segundo
Los Angeles
Measure BT Business Tax
various
$ 3,000,000
none 51.2% PASS
none 59.5% PASS
none
General
General
$15/rental unit
Pico Rivera
Los Angeles
Measure AB Business Tax
various
$5,800,000
none 75.5°/ PASS
$2,50/mi/day
$ 250,000
neral
Measure O
Busn Tax
Santa Ana
Orange
Measure Business Tax various
neutral
none 64.8% PASS
Tracy
San Joaquin
Measure Business Tax
various
$3,200,000
none 72.6% PASS
none 59.5% PASS
none
Gene al
General
$15/rental unit
BurlingameBusiness
San Mateo
Tax
Measure various
$2,500,000
none 75.1% PASS
$2,50/mi/day
$ 250,000
General
Measure O
Busn Tax
Los Gatos
Santa Clara
Measure J Business Tax various
$ 1,100,000
none 53.4% PASS
Santa Clara Santa Clara
Measure
Business Tax
S45/employee,
$6,000,000
none 59.5% PASS
none
62.9% PASS
General
$15/rental unit
Cannabis
Brisbane San Mateo
Measure OBusiness
Tax
$2,50/mi/day
$ 250,000
none 69.2% PASS
Measure O
Busn Tax
lodghrg busn
$1,800,000
none
63.5% PASS
Fast Palo Alto San Mateo
Measure L
Business Tax
2.5%
$ 1,480,000
none 69.90/. PASS
resid. rentals
gross Rcpts
Measure
Busn Tax
County of Santa Cruz Unincorporated
Measure
Busn Tax-
12.5cents/cup
$700,000
none 68.2% PASS
South Lake Tahoe
BI Dorado
Measure G
Busn Tax
6%retail,
$ 950,000
none
62.9% PASS
Cannabis
manufacturing
McFarland
Kern
Measure O
Busn Tax
8% of gross
$1,800,000
none
63.5% PASS
Cannabis
receipts retail,
Avenal
Kings
Measure
Busn Tax
$25+/sfor
$600,000
none
61.8% PASS
Cannabis
15% at rcpts
Baldwin Park
Los Angeles
Measure CB
Busn ax41/'o
$ 300000
none
51.3% PASS
Cannabis
gross Rcp[s
Clarermnt
Los Angeles
Measure CT
Busn Tax
4%-7%gr
$500,000
none
61.1% PASS
Cannabis
rcpts,$1-
County of Los Angeles Unincorporated Measure
Busn Tax
4%gross
$15,170,000
none
60.1% PASS
Cannabis
receipts retail,
Cudahy
Los Angeles
Measure BA
Busn Tax
15°/
$ 3,600,000
none
54.0% PASS
Cannabis
grossRcpts
FJ Segundo
Los Angeles
Measure Y
Busn a
0
$ 1 500,000
none
72.8% PASS
Cannabiss
GrossRcpt,
Hennosa Beach
Las Angeles
Measure T
Busn Tax
I0%
$ 1500,000
none
67.6% PASS
Cannabis
Gross Rcpt,
Lynwood
Los Angeles
Measure TR
Busn Tax
50/oto 10%
$ 3,000,000
none
66.4% PASS
Cannabis
Santa Monica Las Angeles Measure HBusn Tax 10%grossM $ 5,000,000 none 66.4% PASS
South FJ Monte Los Angeles Measure CM Busn Tax 6% special $ 126,000 none 53.7% PASS
Cannabis euise taxon
Monterey Monterey Measure) Busn Tax
69/. $1,300,000 none 65.2% PASS
Pacific Grove Monterey Measure Busn Tax 6%grossRcpt $300,000 none 70.8% PASS
Cannabis
Huntington Beach Orange Measure O Busn Tax 6%retail, 1%$600,000 none 54.7% PASS
Cannabis other
Ca f ifo rniaCity Fivtance.co m
-5— rev January 14, 2023
Measures in 2022 with Non -Specific Durations
Measure
ParcelTax
$600+/yr
$24,000
roads
none
73.2% PASS
South Pasadena
Los Angeles
Annual
ParcelTax
xxx
?
Agency Name
County
86.2% PASS
Tax/Fee
Rate
Revenue
Use
Sunset
YES%
Laguna Woods
Orange
Measurer
Busn Tax
4%-10%of
$750,000
$15/$1000 T$lrn>$2m,
none
61.1% PASS
none
71.6% PASS
San Mateo
Cannabis
gross receipts
by I%to 1.5%
if>$IOm
$4.800000
none
Corona
Riverside
Measure
Busn Tax
9%ofgross
$5000000
$910,000
none
61.6% PASS
59.2% PASS
Clovis
Fresno
Cannabis
receipts for
by 2% to 12°/
$ 500,000
none
Montclair
San Bernardino Measure R
Busn Tax
7°/0
$ 3,500,000
10%
none
70.3% PASS
none
62.3% PASS
Trinidad
Cannabis
grossRcpts
TOT
by 4% to 12%
$ 65,000
County of San Diego Unincorporated
Measure A
Busn Tax
6% retail, 3%
$ 5,600,000
TOT
none
57.4% PASS
none
56.2% PASS
Cannabis
distribution
Measure HT
TOT
by 2% to 12%
$ 730,000
Encinitas
San Diego
Measure L
Busn Tax
4% to 7% of
$ 1,400,000
TOT
none
65.1% PASS
none
73.7% PASS
Cannabis
gross receipts
Healdsburg
Sonorm
Measure
Busn Tax
8%grossRcpt
$500,000
none
72.7% PASS
Cannabis
Exeter
Tulare
Measure B
Busn Tax
IN. retail and
?
none
66.5% PASS
Cannabis
other, $10/sf
Tulare
Tulare
Measure Y
Busn Tax
10% retail and
?
none
65.2% PASS
Cannabis
otlrer, $10/sf
Woodland
Y010
Measure
Busn Tax
10%
9
none
66.2% PASS
Cannabis
grossRcpts
Redlands
San Bernardino Measure
Busn Tax
from$0.047/sf
$530,000
none
53.5% PASS
Distrib centers
to 50.105/sf
Arcadia
Los Angeles
Measure SW
Busn Tax
5%
n/a*
none
63.9% PASS
Sports Betting
gmssRcpts
Albany
Marrieds
Measure K
ParcelTax
$0.074+/sf
$ 1,950,000
fire/IMS
none
76.0% PASS
Cameron Park Airport
El Dorado
Measure
ParcelTaxby
$600 to
$117900
airport/
none
78.2% PASS
District
$900/parcel
streets
Highlands Village
EI Dorado
Measure L
ParcelTax
$140}/parcel
$ 10,920
streets
none
86.3% PASS
Lighting Benefit Zone
Knolls Property
El Dorado
Measure
ParcelTax
by $300,+ to
$8,400
streets
none
75.5% PASS
Sundance Trail Zone of El Dorado
Benefit
Measure
ParcelTax
$600+/yr
$24,000
roads
none
73.2% PASS
South Pasadena
Los Angeles
Measure LL
ParcelTax
xxx
?
library
none
86.2% PASS
River Delta Fire District Sacratrento
Measure H
ParcelTax
$90/yr
$ lX000
fire
none
72.1% PASS
Emeryville
Alarreda
Measure
PropTmnsffax
$15/$1000 T$lrn>$2m,
$5,000,000
none
71.6% PASS
San Mateo
San Mateo
Measure CC PropTmnsflax
by I%to 1.5%
if>$IOm
$4.800000
none
71.8% PASS
Alarreda
Alameda
Measure
TOT
by4%to 14%
$910,000
none
59.2% PASS
Clovis
Fresno
Measure B
TOT
by 2% to 12°/
$ 500,000
none
69.7% PASS
Kemrnn
Fresno
Measure G
TOT
10%
$40,000
none
62.3% PASS
Trinidad
Humboldt
Measure P
TOT
by 4% to 12%
$ 65,000
none
77.6% PASS
Inperial
Imperial
Measure G
TOT
by 4% to 12%
$ 600,000
none
56.2% PASS
Arcadia
Los Angeles
Measure HT
TOT
by 2% to 12%
$ 730,000
none
54.1% PASS
Santa Monica
Los Angeles
Measure CS
TOT
by 1%, 3%
home shares
$4,100,000
none
73.7% PASS
Notes
?= Ballot measure title did not include an estimate of annual revenues, also not in compliance with Initiative 21-0042A1.
n/a*= Arcadia Measure SW passed but sports betting remains illegal after the failure of Propositions 26 and 27 on the November
statewide ballot.
Cal ifo rniaCityFinance.co m
rev January 14, 2023
Measures in 2022 with Non -Specific Durations
Agency Name Court Tax/Fee Rate
Anaheim Orange Measure TOT online travel
conpanies
Annual
Revenue
$3000000
Use Sunset
none
YES%
59.2% PASS
La Pahm
Orange Measure
TOT
by4%to 12%
$200,000
none
71.1% PASS
Colfax
Placer Measure
TOT
by2%to10°/
$29,000
none
73.5% PASS
Rocklin
Placer Measure F
TOT
by 2% to 10%
$ 300,000
none
59.8% PASS
Roseville
Placer Measure
TOT
by4%to 10%
$3,000,000
none
73.0% PASS
Big Bear Lake
San Bernardino Measure P
TOT
by 2% to 10%
$ 1300,000
none
54.4% PASS
Grand Tenace
San Bernardino Measure M
TOT
new 10%
$ 250,000
none
51.9% PASS
Yucca Valley
San Bernardino Measure K
TOT
by 5% to 12%
$ 1.300,000
none
71.9% PASS
Imperial Beach
San Diego Measure R
TOT
by 4% to 14%
$ 400,000
none
67.4% PASS
D Paso de Robles
San Luis Obispo Measure F
TOT
byl%toll%
$750,000
none
61.2% PASS
Belmont
San Mateo Measure K
TOT
by 2% to 14%
$ 600.000
none
79.3% PASS
Millbrae San Mateo
Measure N
TOT
by 2% to 14%
$ 1,500,000
none
75.8% NA55
County of Humboldt Unincorporated
Measure
TOT
by2%to
12%
$3,080,000
none
63.3% PASS
County of Placer-
Measure
TOT
by2%to
10%
$4,000,000
none
90.0%PASS
North Tahoe TOT Area
County of Kern unincorporated areas
Measure
TrUT
Icent
$54,000,000
none
50.8% PASS
County of Santa Cruz Un in corporated
Measure
TOT
by1%to
12%
$2,300,000
none
69.2% PASS
County of El Dorado-
Measure
TOT 2/3
by4%to
14%
$2,500,000
none
81.8% PASS
East Slope Tahoe
Kings
Measure A
TrUT
1 cent
$ 500,000
none
72.5% PASS
Chico Butte
Measure
TrUT
TrUT
Icent
$24,000,000
none
52.4% PASS
Mendota
Fresno
Measure
TrUT
LIS cent
$493,498
none
57.2% PASS
Blue Lake
Humboldt
Measure
TrUT
Icent
$30,000
none
55.4% PASS
Rio Dell
Humboldt
Measure
TrUT
3/4cent
$400,000
none
53.3% PASS
County of Kern unincorporated areas
Measure
TrUT
Icent
$54,000,000
none
50.8% PASS
McFarland
Kem
Measure M
TrUT
l cent
$ 579,662
none
62.2% PASS
Tehachapi
Kem
Measure S
TrUT
1 cent
$ 4,000,000
none
57.2% PASS
Avenal
Kings
Measure A
TrUT
1 cent
$ 500,000
none
72.5% PASS
Susanvi0e
Lassen
Measure P
TrUT
I cent
$ 1,750,000
none
54.7% PASS
Baldwin Park
Los Angeles
Measure BP
TrUT
3/4 cent
$6,000,000
none
58.1% PASS
Malibu
Los Angeles
Measure MC
TrUT
1/2 cent
$3000,000
none
52.6% PASS
Monterey Park
Los Angeles
Measure MP
TrUT
3/4 cent
$ 6,000,000
none
58.5% PASS
Torrance
Los Angeles
Measure SSI
TrUT
1/2 cent
$ 18,000,000
none
55.0% PASS
Larkspur
Marin
Measure G
TrUT
1/4 cent
$ 700,000
none
59.4% PASS
Sand City
Monterey
Measure L
TrUT
by , 1/2cent to �
$ 1,400,000
none
68.7% PASS
Hemet
Riverside Measure H
TrUT
same 1 cent
$ 15,000,000
none
58.0% PASS
Elk Grove
Sacramento Measure E
TrUT
1 cent
$ 21,000,000
none
54.1% PASS
Celt
Sacramento Measure Q
TrUT
I cent
$ 3,600,000
none
52.4% PASS
Colton
San Bernardino Measure S
TrUT
1 cent
$ 9,500,000
none
66.8% PASS
Ontario
San Bernardino Measure Q
TrUT
1 cent
$ 95,000,000
none
53.2% PASS
Solana Beach
San Diego Measure S
TrUT
I cent
$ 3,000,000
none
66.7% PASS
Brisbane
San Mateo Measure U
TrUT
1/2 cent
$ 2,000,000
none
63.9% PASS
Goleta Santa Barbara Measure B TrUT I cent $ 10,600,000 none 64.7% PASS
Solvang
Santa Barbara
Measure U
TrUT I cent $ 1,600,000
none 63.1% PASS
Ca IiforninCity Finance.com
-7— rev January 14, 2023
Measures in 2022 with Non -Specific Durations
Modesto Stanislaus Measure H TrUT l cent $ 39,000,000 none 62.8% PASS
County ofColusa
MeasureA TrUT 2/3 1/2 cent
$2,400,000
LMS none
Annual
Atwater Merced
Agency Name
County
TaxlFee
Rate
Revenue
Use Sunset YES%
Watsonville
Santa Cruz
Measure R TrUT
I/2 cent
$ 5,000,000
none 64.4% PASS
Vallejo
Solano
Measure P TrUT
7/8 cent
$ 18,000,000
none 54.7% PASS
Modesto Stanislaus Measure H TrUT l cent $ 39,000,000 none 62.8% PASS
County ofColusa
MeasureA TrUT 2/3 1/2 cent
$2,400,000
LMS none
69.4% PASS
Atwater Merced
Measure B TrUT 2/3 same l cent
$ 4,000,000
police/fire none
73.7% PASS
Truckee Nevada
Measure U TrUT 213 by 1/4 cent to
$3,000,000
open space none
76.4% PASS
Palo Alto
Santa Clava
Measurel-
UtilityTrans Par
180/ gas
$7,000,000
none
77.7% PASS
Santa Clara
Santa Clara
MeasureG
UtilityTtansfer
5%
$30,000,000
none
84.2% PASS
Hercules
Contra Costa
MeasureN
UUT
8%
$3,600,000
none
69.3% PASS
Carson
Los Angeles
Measure UU
UUT
2%electr, gas
$ 8,000,000
none
78.4% PASS
Sebastopol
Sonoma
Measure N
UUT
375%(same)
$ 700,000
none
83.5% PASS
Co -temporal Advisory Measures in 2022
At the November 2022 election, there was just one local general tax measure that was accompanied by an
advisory measure as to the use of funds. The City of Santa Monica's Measure DT property transfer tax failed with
just 34 percent approval as voters instead chose the citizen initiative Measure GS.
There was also just one such tax use advisory measure on the June 2022 election. Susanville's voters passed
Measure P, a 1 percent transactions and use (sales) tax that generates $1.75 million per years for general city
services. The measure was accompanied by advisory Measure Q, accompanied the city's It asked, "If Measure P
passes, should the revenues be used to balance the budget to maintain and enhance existing public safety
services (police and fire), and provide funding to support street infrastructure improvements and provide funding
to support economic development efforts designed to increase businesses, jobs and visitors to Susanville?" Both
measures passed. Under Initiative 21-0042A1, the tax will expire a year after the effective date of the initiative
(i.e., in December 2025).
1.b. Additional Costs and Public Service Effects of the Tax Provisions
Assuming a similar volume of local measures through 2024 as we saw in 2022, there will be over 200 local
measures that will need to be redrafted to comply with the Initiative and placed back on the ballot for the taxes to
continue after December 2025. The costs of re -drafting, re -placing and re -voting on these measures, previously
legally approved by voters, will be in the tens of millions in total statewide.
2. "Exempt Charges" (fees and charges that are not taxes) and Services Threatened
With regard to fees and charges adopted after January 1, 2022, Initiative 21-0042A1:
• Subjects new fees and charges for a product or service to a new "actual and reasonable test."
• Subjects fees and charges for entrance to local government property; and rental and sale of local
government property to a new, undefined, "reasonable" test.
• Allows legal challenge to any tax adopted before the effective date of the initiative and after January 1,
s The Susanville measure also did not include a specific end dare and so is included in the list and totals of those measures.
Ca lifo rniaCityFinance.cotvt
-8— rev January 14, 2023
2022. Such a lawsuit could enjoin (stop) the enactment of the tax pending the outcome of the legal
challenge.
• Subjects a challenged fee to new, higher burdens of proof if legally challenged.
2.a. Value on New Local Government Fees and Charges at Risk'
Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and
charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to
new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges
imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local
government fee and charge revenue placed at risk is about $2 billion per year including those adopted since
January 1, 2022. Of $2 billion, about $900 million (45 percent) is for special districts, $800 million (40
percent) is cities, and $300 million (15 percent) is counties.'
Major examples of affected fees and charges are:
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund
community safety, code enforcement, and neighborhood cleanup programs.
3. Emergency response fees - such as in connection with DUI.
4. Advanced Life Support (ALS) transport charges.
5. Business improvement district charges.
6. Fees for processing of land use and development applications such as plan check fees, use permits,
design review, environmental assessment, plan amendment, subdivision map changes.
7. Document processing and duplication fees.
8. Facility use charges, parking fees, tolls.
9. Fines, penalties.
10. Fees for parks and recreation services.
2.b. Additional Costs and Public Service Effects of the Fee/Charge Provisions
In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there
would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure
financing more difficult and will deter new residential and commercial development.
F
G Source: California State Controller Annual Reports of Financial Transactions concerning cities, counties and special districts,
summarized with an assumed growth due to fee rate increases (not population) of 2 percent annually.
7 School fees are also affected but the amount is negligible by comparison.
CaliforniaCity Finance. co m
Attachment E
LOA Fiscal Analysis
LAO
January 19, 2022
Hon. Rob Bonta
Attorney General
1300 I Street, 17's Floor
Sacramento, California 95814
Attention: Ms. Anabel Renteria
Initiative Coordinator
Dear Attorney General Bonta:
21-0042 Amdt. 1
RECEIVED
Jan 19 2022
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional
Taxpayer Protection and Government Accountability Act initiative (A.G. File No. 21-0042,
Amendment #1).
Background
State Government
Taxes and Fees. This year's state budget spends over $255 billion in state funds. Over
90 percent of the state budget is funded with revenues from taxes. These include, for example,
sales taxes paid on goods and income taxes paid on wages and other sources of income. Much of
the rest of the state budget is funded by fees and other charges. Examples include: (1) charges
relating to regulatory activities; (2) charges for specific government services or products, like
fees charged to drivers to improve roads; (3) charges for entering state property, such as a state
park; and (4) judicial fines, penalties, and other charges. The State Constitution requires the state
to set fees at a reasonable level, generally reflecting the costs of the services or benefits provided.
The state uses revenue from taxes and fees to fund a variety of programs and services, including
education, health care, transportation, and housing and homelessness services.
Current Requirements to Approve Taxes and Fees. Under the State Constitution, state tax
increases require approval by two-thirds of each house of the Legislature or a majority vote of
the statewide electorate. The Legislature can reduce taxes with a majority vote of each house,
provided the change does not result in an increase in taxes paid by any single taxpayer. In many
cases, the Legislature has enacted statutes that delegate its authority to adjust fees and other
Legislative Analyst's Office
California Legislature
Gabriel Petek. Legislative Analyst
925 L Street. Suite 1000. Sacramento, CA 95814
(916)445-4656
Hon. Rob Bonta
January 19, 2022
charges to administrative entities, like state departments. In these cases, these charges can be
increased or changed by the department within certain limits.
Local Government
Taxes and Fees. The largest local government tax is the property tax, which raises roughly
$75 billion annually. Other local taxes include sales taxes, utility taxes, and hotel taxes. In
addition to these taxes, local governments levy a variety of fees and other charges. Examples
include parking meter fees, building permit fees, regulatory fees, and judicial fines and penalties.
In order to be considered a fee, the charge cannot exceed the reasonable costs to the local
government of providing the associated product or service. Local governments use revenues
from taxes and fees to fund a variety of services, like fire and police, public works, and parks.
Current Requirements to Approve Taxes and Fees. State law requires increases in local
taxes to receive approval of the local governing body—for example, a city council or county
board of supervisors—as well as approval of voters in that local jurisdiction. Most proposed
taxes require a two-thirds vote of the local governing board before being presented to the voters.
Special taxes (those used for a specific purpose) require a two-thirds vote of the electorate while
other types of taxes require a majority vote of the electorate. The majority -vote general taxes can
be used for any purpose. Recent case law suggests that citizen initiative special taxes may be
approved by majority vote, rather than a two-thirds vote. Currently, local governing bodies have
the ability to delegate their authority to adjust fees and other charges to administrative entities,
like city departments. In these cases, these charges can be increased or changed by the
department within certain limits.
Proposal
This measure amends the State Constitution to change the rules for how the state and local
governments can impose taxes, fees, and other charges.
State and Local Government Taxes
Expands Definition of Tax. The measure amends the State Constitution to expand the
definition of taxes to include some charges that state and local governments currently treat as
fees and other charges. For example, certain charges imposed for a benefit or privilege granted to
a payer but not granted to those not charged would no longer be considered fees. As a result, the
measure could increase the number of revenue proposals subject to the higher state and local
vote requirements for taxes discussed below.
Requires Voter Approval for State Taxes. The measure increases the vote requirements for
increasing state taxes. Specifically, the measure requires that legislatively proposed tax increases
receive approval by two-thirds of each house and a majority vote of the statewide electorate.
Voters would still be able to increase taxes by majority vote of the electorate without legislative
action, however. Any state tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Requirements forApproving Local Taxes. Whether sought by the local governing body or
the electorate, the measure establishes the same approval requirements for increasing local
Hon. Rob Bonta
January 19, 2022
special taxes. Any local tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Allowable Uses and Duration of State and Local Tax Revenues Must Be Specified. The
measure requires state and local tax measures to identify the type and amount (or rate) of the tax
and the duration of the tax. State and local government general tax measures must state that the
revenue can be used for general purposes.
State and Local Government Fees
Requires the Legislature and Local Government Bodies to Impose State and Local Fees.
Fees would have to be imposed by a majority vote of both houses of the Legislature or local
governing bodies. The measure would restrict the ability of state and local governments to
delegate fee changes to administrative entities. The extent of these restrictions would depend on
future court decisions. Any fee approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Some New State and Local Fees Could Not Exceed Actual Costs. For some categories of
fees, if the Legislature or a local governing body wished to impose a new fee or make changes to
an existing fee, the measure generally would require that the charge be both reasonable and
reflect the actual costs to the state or local government of providing the service. The measure
also specifies that actual cost should not exceed "the minimum amount necessary." In many
cases, existing fees already reflect the government's actual costs. In other cases, some fees would
have to more closely approximate the payer's actual costs in order to remain fees. If a fee payer
challenged the charge, the state or local government would need to provide clear and convincing
evidence that the fee meets this threshold. State and local governments also would bear the
burden of providing clear and convincing evidence that the levy is a fee—which is not subject to
a vote by the electorate—and not a tax under the new definition.
Fiscal Effects
Lower State Tax and Fee Revenue. By expanding the definition of a tax, increasing the vote
requirements for approving taxes, and restricting administrative changes to fees, the measure
makes it harder for the Legislature to increase nearly all types of state revenues. The extent to
which revenues would be lower under the measure would depend on various factors, most
notably future decisions made by the Legislature and voters. For example, requirements for
legislative approval of fee increases currently set administratively could result in lower fee
revenues, depending on future votes of the Legislature. That lower revenue could be particularly
notable for some state programs largely funded by fees. Due to the uncertainty of these factors,
we cannot estimate the amount of reduced state revenue, but it could be substantial.
Lower Local Government Tax and Fee Revenue. Compared to the state, local governments
generally face greater restrictions to raising revenue. By expanding the definition of taxes and
restricting administrative changes to fees, the measure would make it somewhat harder for local
governments to raise revenue. Consequently, future local tax and fee revenue could be lower
than they would be otherwise. The extent to which revenues would be lower is unknown, but
Hon. Rob Bonta
January 19, 2022
fees could be more impacted. The actual impact on local government revenue would depend on
various factors, including future decisions by the courts, local governing bodies, and voters.
Possible Increased State and Local Administrative Costs to Change Some Fee Levels. In
some cases, state and local departments would need to develop methods for setting fees to reflect
actual costs if the Legislature or local governing bodies wanted to change those fees in the
future. Estimating actual costs by program and fee source could involve some added workload
for those state and local departments, which likely would be supported by fee revenue. The
extent of these administrative costs would depend on (1) whether the state and local governments
determine a fee increase is needed in order to maintain their current level of programs and
services funded through fee revenue and (2) future court decisions.
Summary of Fiscal Effects. We estimate that this measure would have the following major
fiscal effects:
• Lower annual state and local revenues, potentially substantially lower, depending on
future actions of the Legislature, local governing bodies, voters, and the courts.
Sincerely,
for Gabriel Petek
Legislative Analyst
for Keely Martin Bosler
Director of Finance
Attachment F
CBRT Board Members
Business Roundtable Board
Aera Energy
Albertsons
Altria (tobacco)
Anthem Blue Cross
Automobile Club of Southern California
Bittle Enterprises (Enterprise
Rent -a -car)
Blackstone
Caruso Management (Rick Caruso)
Chevron
C.J. Segerstrom & Sons
Dart Container
DLA Piper (Law Firm)
Douglas Emmett
Eli Lilly & Company
Exxon
Farmers Group (Insurance)
Fivepoint (Developer)
Global Medical Response Solution
Grimmway Farms
Irvine Company
KB Homes
Kilroy Realty
LevatoLaw
Majestic Realty
Marathon Petroleum Corp.
McKinsey & Company
National CORE
Sempra
State Farm
Sutter Health
Union Pacific Railroad
United Airlines
UPS
Valero
Western National Group
Wells Fargo
Wellpoint (insurance)
Western National Group
Attachment G
Letter of Opposition
MAYOR:
SEAN DANG
MAYOR PRO TE\1:
STEvEN LY
COUNCIL MEMBERS:
SANDRA AR NTA
MARGARET CLARK
PoLLv Low
February 28, 2023
Bismarck Obando
City of &semead
8838 E. VALLEY BOULEVARD
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569-2100
Director of Public Affairs, League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814
RE: Letter Opposing Initiative 21-0042A1
On February 28, 2023, the City of Rosemead voted to oppose Initiative 21-0042A1, a
deceptive, developer -sponsored proposition aimed for the November 2024 statewide
ballot that would significantly jeopardize cities' ability to provide essential services and
infrastructure for our residents.
The measure includes undemocratic provisions that would make it more difficult for local
voters to pass measures needed to fund local services and projects and would limit voter
input by prohibiting local advisory measures where voters can express a preference on
how they want their local tax dollars spent.
This measure creates new constitutional loopholes that allow corporations to pay far less
than their fair share for the impacts they have on our communities, including impacts on
local infrastructure and our environment.
This measure also may make it much more difficult for state and local regulators to issue
fines and levies on corporations that violate laws intended to protect our environment,
public health and safety, and our neighborhoods.
Unless defeated, the measure puts billions of dollars currently dedicated to local services
at risk, and could force cuts to fire and emergency response, law enforcement, public
health, parks, libraries, affordable housing, services to support homeless residents, mental
health services, and more.
The City of Rosemead's adopted annual budget includes the expenditure of revenues
collected via fees, and a variety of taxes derived from local sales taxes, property taxes,
etc. As a general law city, the City imposes fees and approves new taxes following the
laws of the State of California. In the case of fees associated with the provision of
services, the City adopts and revises such fees, annually, via the approval of an annual
fee resolution. Fees are closely associated with the City's prorated costs of providing a
service or benefit to a user that is not otherwise provided to everyone. If some of the fees
included in the annual fee resolution were to be challenged, the City would be required
to provide clear and convincing evidence that the levy is a fee and not a tax, which
would otherwise be subject to new requirements mandated by the initiative.
The measure benefits wealthy corporations and real estate developers while decimating
our local communities and neighborhoods.
You may list the City of Rosemead in formal opposition to Initiative #21-0042A1 and
include our city as part of the growing coalition of public safety, labor, local government,
infrastructure advocates, and other organizations throughout the state opposed to this
deceptive proposition.
Sincerely,
S
Sean Dang
Mayor
City of Rosemead
CC: Los Angeles County CEO
Los Angeles County Division, League of California Cities
California Contract Cities Association