CC - Item 5A - Taxpayer Measure PresentationTAXPAYER
PROTECTION AND
GOVERNMENT
ACCOUNTABILITY ACT
INITIATIVE 21-0042A1
March 14, 2023, City Council Meeting
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Significant threat to local control and decision making.
Calls for stricter rules for raising taxes, fees, and
assessments that fund local government services.
Disrupts fiscal certainty needed for reliable local service
delivery by creating new mechanisms to challenge or
repeal local revenue measures.
Puts at risk billions of dollars dedicated to funding local
services.
Local measures adopted after January 1, 2022, that do
not comply with the new rules are void unless
reenacted.
Taxpayer
Protection
and
Government
Accountability
Act
IMPACT
2
The California Business Roundtable is an
organization that advocates on behalf of the
largest and wealthiest corporation in California.
Who is the
California
Business
Roundtable?
•Albertsons
•Automotive Club of Southern
California
•Blackstone
•Chevron
•Eli Lilly and Company
•Exxon
•Farmers Group Insurance
•Fivepoint (Developer)
•KB Homes
•PepsiCo
•Sempra
Members Include:
•State Farm
•UPS
•United Airlines
•Union Pacific Railroad
•Valero
•Wells Fargo3
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 same rules as taxes placed on the ballot by a
City Council.
New or increased tax or fee
adopted by Legislature, City
Council or local voters after
January 1, 2022, must
comply with the Act’s new
rules.
4
Local & State Taxes
Local Taxes
•Requires voter approval in order
to apply an existing tax:
•To territory that is annexed.
•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.
5
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.
Fees and Charges
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.
6
IMPACT ON
ROSEMEAD
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. 7