LEGISLATIVE SUBCOMMITTEE
Staff Report
Meeting Date: June 13, 2023
To: Legislative Subcommittee
From: Jason Haber, Intergovernmental Affairs Director
Staff Contact: Jason Haber, Intergovernmental Affairs Director [email protected], 442-339-2958
Subject: Taxpayer Protection and Government Accountability Act (2024 Ballot Measure)
District: All
Recommended Action
Review and discuss options concerning the city's position on the 2024 Taxpayer Protection and Government Accountability Act ballot measure.
Discussion
On February 21, 2023, the City of Carlsbad received written correspondence from the League of California Cities Executive Director and CEO calling on the city to adopt a resolution formally opposing a 2024 ballot measure being proposed by the California Business Roundtable (Exhibit 1).
The League correspondence referenced a February 6, 2023, letter and fact sheet that was sent from the Californians for Taxpayer Protection and Government Accountability Ad Committee to Mayors and Council Members throughout the state requesting they endorse the Taxpayer Protection and Government Accountability Act ballot measure (Exhibit 2). Additional information, including the group's reasons for pursuing the initiative, is available at https ://taxpaye rp rotectio n. com/.
The League's correspondence also references an Action Alert (available at https://www.calcities.org/advocacy/take-action#O), which characterizes the proposed measure as a "State Ballot Measure Restricting Voters ' Input and Local Taxing Authority." The League's Action Alert requests that cities "make sure your city's voice is heard by adopting a resolution opposing the harmful measure." A sample resolution and a sample letter of opposition, as proposed by Cal Cities, are attached for Subcommittee consideration (Exhibits 3 and 4).
This subject was considered by the Legislative Subcommittee on April 11, 2023. Representatives from the League of California Cities and the California Business Roundtable were notified and invited to address the Subcommittee in advance of the April 11, 2023, Subcommittee meeting. On that date, the Subcommittee received a presentation from the League of California Cities; however, the California Business Roundtable did not have a representative in attendance. As such, this item has been placed on the current agenda to provide an opportunity for a representative of Reform California, a 527 political action committee that supports the California Business Roundtable position regarding this matter, to address the Subcommittee.
June 13, 2023 Item #3 Page 1 of 12
State law allows a public agency to adopt a position on a ballot measure as long as the position is taken at an open meeting where all voices have the opportunity to be heard. However, state law prohibits the use of public resources to campaign for or against a ballot measure. A summary of permissible and impermissible activities is included in Exhibit 5.
Next Steps
If the Subcommittee decides to recommend that the city adopt a position concerning the Taxpayer Protection and Government Accountability Act Ballot Measure, staff will work with the City Manager to place an item on a future City Council agenda for consideration. The language of any proposed resolution will be reviewed and revised, if needed, by the City Attorney's Office to ensure legal compliance.
Public Notification
Public notice of this item was posted in keeping with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. Correspondence from the League of California Cities Executive Director and CEO
2. Endorsement Request from the Californians for Taxpayer Protection and Government Accountability Act Committee
3. Sample resolution of opposition
4. Sample letter of opposition
5. Ballot Measure Activities & Public Resources
June 13, 2023 Item #3 Page 2 of 12
Exhibit 1
February 21, 2023
To: City Managers
From: Carolyn Coleman, Executive Director and CEO, League of California Cities Re: California Business Roundtable
Great to see everyone at the City Managers Conference in Carlsbad! As a follow up to my remarks during the Conference, I wanted to let you know that the California Business Roundtable has mailed a letter and fact sheet to Mayors and Counci l Members throughout the state requesting they endorse the Taxpayer Protection and Government Accountabi lity Act (see attachment).
In anticipation of you receiving ques tions from your elected officials, I want you to know the letter and fact sheet mischaracterize the impacts the measure will have on cities if the voters approve it in November 2024.
Spec ifically, the measure:
1. Does not clear up "confusion" about what a tax is. Rather, it expands what a tax is by converting some fees into taxes.
2. Does not preserve the predictability of tax dollars. It actually creates fiscal uncertainty by making the measure retroactive to Jan. 1, 2022.
3. Does not preserve local control. It preven ts a city from negotiating the rental and sale of its own property.
4. Cannot "eliminate hidden taxes" because there is no such thing as a hidden tax .
s. Cannot "require truthful descriptions of new tax proposals" because truthfu l descriptions are already required. A general tax can be used for any governmental purpose, and a special tax must be used for the particu lar purpose earmarked by the voters.
6. Falsely argues that "massive increases in taxes and fees" punish hard-working families , when the measure in fact makes it more difficult for a city to punish municipal code violators and protect residents.
No matter how the California Business Roundtable tries to paint a different picture, let me be clear: this measure is one of the biggest threats to local cont rol that we have ever faced.
Why do we all oppose it?
1. This measure calls for stricter rules for raising taxes , fees, assessments, and property- related fees tha t fund critical loca l services.
June 13, 2023 Item #3 Page 3 of 12
2. The measure puts at risk the billions of dollars currently dedicated to funding critical local services by creating new mechan isms to challenge or repeal local revenue-raising measures.
3. It could force cuts to public schools, fire and emergency response , law enforcement, public health, parks, libraries, affordable housing, services that support homeless residents, mental health services, and more.
4. The measure reduces funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities.
Your regional public affairs manager has shared an Ac tio n Alert calling on all cit ies to adopt a resolution formally opposing this measure. Currently , over 100 cities have passed resolutions. If you have not already adopted one, be sure your city is on record opposing this dangerous ballot measure as soon as possible .
Thank you for all you do and for supporting Cal Cities! As always , please do not hesitate to reach out to me if you have any questions.
Carolyn
Carolyn M . Coleman
Executive Direc tor and CEO
League of California Cities
Office : 916.658.8275
Cell: 916.769.5729
[email protected] I www.ca lcities.org
Twitter I Facebook I YouTube I Linked ln
CAUTION: Do not o en attachments or click on links unless ou reco nize the sender an know the content is safe.
June 13, 2023 Item #3 Page 4 of 12
TAXPAYER
PRe TECTION
Accountability Act
February 6, 2023
The Honorable Katherin e Aleman
2870 Clark Ave
Norco, CA 92860-1903
Dear Council Member Aleman :
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RECEIVED
CITY OF NORCO
FEB 1 3 2023
CITY CLERK
Exhibit 2
Five years ago, the wi ll of the vote rs and the decades of tax law they created st arted unraveling in highly mistaken appellate court responses to the Californ ia State Supreme Court 's decision in California Cannabis Coalition v. City of Upland. Two Courts of Appeal took this case beyond its holding to create significant loopholes in estab lished tax law and policy rel ied upon wisely by vote rs and government for over forty years. Combined wit h several other court cases, includin g Ca/Chamber v. California Air Resources Board, the courts have created uncertainty and confusion that must be addressed.
In an effort to close these loopholes and restore the tax policy prior to these decisions, we recently qualified the Taxpayer Protection and Government Accountability Act initi ative for the November 2024 statewide ballot . The Act builds upon decades of popular voter-approved ballo t measures, beginning with Prop. 13 in 1978 and further strength ened by Prop. 218 (1996) and Prop. 26 (2010). In the past decade, each of these ballot measures has been signifi cantly weakened by t he courts, unraveling the status quo and decades of established tax law for citie s, counties, and the enti re state.
The Taxpayer Protection and Government Accountability Act has been enthusiastically supported by voters, as evidenced by the more than 1,430,000 signatures we submi tted to local county registrars to qualify the Act for the 2024 ballot.
Prop. 218 was sett led law-un disput ed by cities and counti es-a nd created a clear framewo rk that provided taxpayers certainty on new and higher taxes, while giving local jurisdictions the ability to raise both general and special taxes. In fact, local governm ents were so comfo rtable with the framewo rk of Prop. 218, and the ir ability t o raise necessary revenue under its provisions , that the League of Cities defended Prop. 218's taxpayer protection provisions in an Amicus Curiae brief filed in the California Cannabis Coalition v. City of Upland case:
"The core issue in this case is whether a local tax measure proposed by a citizen of a municipa l corporation (or other local government agency) through an initiative is subject to the same constitutional requiremen ts as one proposed by the municipal corporation 's governing body. The trial court held yes, but in an unprecedented Ad paid for by Californians for Taxpayer Protection and Government Accountability . sponsored by Californ ia homeowne rs. taxpayers. and businesses
Ad Committee's Top Funders
California Business Roundtable
AMR Holdco
Kilroy Realty LP
Funding details at www.fppc.ca.g ov
Jun e 13, 2023 Item #3 Page 5 of 12 00003 28
opinion the Court of Appeal held that article XIII C's requirements do not apply to taxes imposed through the initiative process. As a result, the League finds itself ironically aligned in this case with the Howard Jarvis Taxpayers Association, proponents of Propositions 218 and 26, in arguing that a proper interpretation of the Constitution does not countenance different treatment for local tax measures, regardless of their origin, and certainly does not create an exemption for initiatives that swallows all the rules created by Proposition 218 ." (emphasis added)
So, what does the Taxpayer Protection and Government Accountability Act do? In short, at the local level it restores the key provisions of Prop. 218, requiring special taxes placed on the ballot by citizen initiative to obtain a two-thirds vote of the electorate once again.
In addition, the Act clearly clarifies the existing definition of what is a 'tax,' and require s either voters, or the local governing body, to approve all taxes and exempt charges. Despite the clear intent of the voters when they passed Prop. 13, Prop. 218, and Prop. 26, the courts have, for the last decade, created significant loopholes that directly contradict what voters approved at the ballot box.
Lastly, to preserve local control and predictability of tax dollars, the Act requires local property tax revenue to stay in the county in which it is collected. There have been repeated attempt s to direct this revenue to the state for redist ribution back to the counties, forcing some counties to lose millions of dollars in local property tax revenue. Thanks to Prop. 13, local property tax revenue is one of the most predictable and stable funding sources for a county. The Taxpayer Protection and Government Accountability Act ensures these dollars-and the certainty they provide-stay within the county in which they were generated.
The Act also applies many of these same provisions at the state level, requiring voters to approve all statewide taxes passed by the Legislature and requ iring the Legislature to approve all fees and other charges, as defined by the measure.
Attached please find a fact sheet on the measure, which gives additional information on the key provisions of the Act. Please do not hesitate to reach out if you have any questions regarding the measure or its provisions.
Thank you,
Robert C. Lapsley
President
California Business Roundtable
June 13, 2023
Matthew Hargrove
President and CEO
California Business Properties
Association
Jon Coupal
President
Howard Jarvis Taxpayers Asso
ciation
Item #3 Page 6 of 12
TAXPAYER
PR6'TECTION
and Government Accountability Act
TaxpayerProtection.com
California has the highest tax rates in America. Massive increases in taxes and fees over the past decade only add to the state's already sky-high cost of living - punishing hard-working families who are now struggling with soaring inflation.
Even still, politicians, bureaucrats and special interests continue to make it harder for Californians to make ends meet. In 2022 alone, they considered nearly $200 billion in higher taxes and fees.
THE SOLUTION
The Taxpayer Protection and Government Accountability Act is a simple measure that gives voters the final say on new and higher taxes and closes court-created loopholes that have made it easier for special interests and politicians to raise taxes. ✓ Gives voters the final say on all new and higher taxes Requires all new taxes passed by the Legislature to be approved by voters.
Restores two-thirds voter approval for all new local special tax increases. ✓ Eliminates all "hidden taxes"
Clearly defines what is a tax or fee - addressing recent court decisions that overturned decades of established taxpayer protections.
Prevents unelected boards and commissions from passing hidden taxes or fees without approval from elected officials or voters.
✓ Requires truthful descriptions of new tax proposals
Holds politicians accountable by requiring they clearly identify how revenue will be spent before any tax or fee is enacted and ensures it is not diverted to other purposes.
Ensures that the tax rate and length oftime a new or higher tax will be in effect is listed on the ballot.
With families across California struggling and the cost of living continuing to skyrocket, we must act now.
The Taxpayer Protection and Government Accountability Act will guarantee voters, not politicians, have the final say on whether or not to raise taxes, while maintaining current revenue and spending.
Join our coalition to protect taxpayers and hold the government accountable! Ad paid for by Californians for Taxpayer Protection and Government Accountabiljty. sponsored by California homeowners. taxpayers. and businesses Ad Committee's Top Funders
California Business Roundtable
AMR Holdco
Kilroy Realty LP
June 13, 023 Funding details atwww.fppcca.gov Item #3 Pa e 7 of 12 Exhibit 3
Sample Resolution to Oppose Initiative 21-0042A 1
WHEREAS, an association representing California's wealthiest corporations and deve lopers is spending millions to push a decep tive proposition aimed for the November 2024 stat ewide ballot; and
WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund loca l services and infrastruc ture, and would limit voter input by prohibiting loca l advisory measures where voters provide directi on on how they want their local tax dollars spen t; and
WHEREAS, the measure c reates new constitutio nal loopholes that allow corpo rati ons to pay far less than their fair share for the impacts they have on our commun ities, including loca l infra structure and our environment; and WHEREAS, the measure may make it mu ch more difficu lt for state and local regulators to issue fines and levies on corpora tions that viola te laws inte nded to protect our envi ron ment, public heal th and safe ty, and our neighborhoods ; and WHEREAS, the measure puts billions of dollars currently dedicated to local services at risk and cou ld force cuts to fire and emergency response, law enfo rceme nt, pub lic health, parks, libraries, affordable housing, services to suppor t homeless residents, mental health services, and more; and THEREFORE, BE IT RESOLVED that the City/Town of [NAME] opposes Initia tive 21- 0042A 1;
BE IT FURTHER RESOLVED, that the City/Town of [NAME] will join the No on Initia tive 21-0042A 1 coalition, a growing coa lition of public safety, educa tion, labor, loca l government, and infrastructure groups throughout the state .
We direct staff to email a copy of this adopted resolution to the League of California Cities at [email protected].
PASSED, APPROVED, AND ADOPTED this day _ _ of __ , 2023.
June 13, 2023 Item #3 Page 8 of 12
SAMPLE OPPOSE LETTER
Email a copy to BallotMeasures @calcities.org as well as your Regional Public Affai rs Manager.
***C ITY LETTERHEAD***
DATE
Bismarck Obando
Director of Public Affa irs, League of California Cities 1400 K Street, Suite 400
Sacramento, CA 958 14
RE: Lette r Oppo sing Initiative 21-0042A 1
Exhibit 4
On DA TE, the City /Town of ____ voted to oppose Initiative 2 l -00 42A l, a deceptive, developer-sponso red 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 undemocra tic provisions that would make it more difficul t for loca l 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 loopho les that allow corporation s to pay far less than their fair share for the impacts they have on our communities, inc luding impacts on local infrastruc ture 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 enfo rcement, public health, parks, libraries, affordable housing , services to suppor t homeless reside nts, mental health services, and more.
PLEASE CITE SPECIFIC IMPACTS TO YOUR CITY THAT WOULD RESULT FROM THIS INITIATIVE.
June 13, 2023 Item #3 Page 9 of 12
The measure bene fits wealthy corporations and real estate deve lopers while decimating our local communi ties and neighbo rhoods.
You may list the City/Town of ____ ~ in formal opposi tion to Initiative #21-0042A 1 and include our city as part of the growing coalitio n of public safety, labor, local government, infrastructure advocates, and other organ izations throughout the state opposed to this deceptive proposition.
Sincerely,
NAME
TITLE
CITY /TOWN of -------'
June 13, 2023 Item #3 Page 10 of 12
Exhibit 5
1 111!!11 I NST ITUTE 1oiz
~ LOCAL GOVERNMENT "
Ballot Measure Activities & Public Resources
A
s important as ballot measures are to
policymaking, public agencies and officials face
important restrictions and requirements related to ballot measure activities.
The basic rule is that public resources may not be used for ballot measure campaig n activities. Public resources may be used, however, for informational activities .
The key difference between campaign activities and
informat ional activities is that campaign activities
support or oppose a ballot measure, while informational activities provide accurate context and facts about a
ballot measure to voters.
This document summarizes some of the key
applications of these principles. The law, however, is not always clear and the stakes are high. Missteps in this
area are punishable as both criminal and civil offenses.
Always check with agency counsel for guidance on how
these rules apply in any specific situation.
Public Agency Resources May
Be Used To
0 Draft and place a measure on the ballot.
0 Pay for polling to determine whethe r to place a
measure on the ballot.
0 Prepare and distribute an objective and fact-based
analysis on the effect a ballot measure may have
on the agency and those the agency serves.
0 Express the agency's views about the effect of
the measure on the agency and its programs,
provided the agency is exceedingly careful not to
advocate for or against the measure's passage.
0 Adopt a position on the measure, as long as
that position is taken by the gove rning body
at an open meeting where all voices have the
opport unity to be heard.
0 Respond to inquiries about the ballot measure in
an objective and fact-based manner.
Considerations
0 Agency communication s about ballot measu res
should not contain inflammatory language or
argumentative rhetoric, or urge any partic ular
vote.
0 Public employees and elected officials may, on
their own time and with their own resources,
engage in the following activities:
» Work on ballot measure campaigns or attend
campaign-related events on personal time (for
example, evenings, weekends and lunch hours).
» Make campaign contributions to ballot measures,
using one's own money or campaign funds (while
observing campaign reporting rules).
» Send and receive campaign related emails or text
messages using one's personal (non-agency)
account or device.
» Personally endorse or oppose a measure.
BALLOT MEASURE ACTIVITIES & PUBLIC RESOURCES I A PRIL 2022 Jun e 13, 2023 Item #3 Page 11 of 12
1 11111 I NST ITUTE IOR
ll!I LOCAL GOVERNMENT '
Public Officials Should Not
l!l Engage in campaign activities while on agency
time, in uniform , or with agency resources.
l!l Use agency resources (including office
equipment, supplies, staff time, vehicles or public
funds) to engage in advocacy-related activities ,
including producing campaign-type materials or
performing campaign tasks.
l!l Use public funds to pay for campaign-related
expenses (for example, television , radio, digital
advertising, bumper stickers or signs) or make
campaign contributions.
l!l Use agency devices or email addresses for
campaign communication activities.
Best Practices
0 Inform agency employees and public officials
about these legal restriction s, particularly once a
ballot measure affecting the agency has qualified
for the ballot.
0 Include language on informational materials that
clarifies that they are for informational purposes
only. For example, "these statements shall not
be construed in support of or against XX ballot
measure."
WHEN DO THESE RESTRICTIONS
KICKIN?
The rules against the use of public resources for
campaign activities certainly are triggered once
a measure has qualified for the ballot. However,
the rules also may apply while a clearly identified
measure is in the qualification process. Agencies
should always consult with agency counsel
regarding the permissibility of specific activities.
DISCLOSURE REQUIREMENTS
Ballot measure expenditures that cross the line
into advocacy are also subject to disclosure
(transparency) requirements under California's
Political Reform Act (Government Code sections
81000 et seq.).
Thank You to Our Partners
The Institute for Local Government would like to
thank the following partners for their support and
contributions to this publication:
Best Best & Krieger, LLP
Burke Williams & Sorensen, LLP
Colantuono, Highsmith & Whatley
Hanson Bridgett
Kronick Moskovitz Tiedemann & Girard
Liebert Cassidy Whitmore
Renne Public Law Group
Richards Watson & Gershon
/LG is the non-profit training and education affiliate of the League of California Cities, California State Association of Counties and the California Special Districts Association which represent 1000s of local agencies across the state. /LG helps local officials and staff navigate the constantly changing landscape of their jobs by offering training, technical assistance , written resources and facilitation services specifically designed for local agencies. From leadership to public engagement to housing and workforce, /LG can help with a wide range of issues. Visit www.ca-ilg.org for more infonnation.
© 2022 Institute for Local Government . All rights reserved . 2 BALLOT MEASURE ACTIVITIES & PUBLIC RESOUR CES I APRIL 202 2 June 13, 2023 Item #3 Page 12 of 12