Item 8.3: Statewide Initiative 21-0042A1
Adrianna Hernandez, Special Projects & Legislative Manager
2 Background
2018
• Ballot measure titled, “Tax
Fairness, Transparency and
Accountability Act” was
circulated to qualify for the
November 2018 ballot
• Due to immense opposition,
the measure’s proponents
withdrew the initiative
2021
Similar ballot measure
was circulated for
signature gathering but
failed to meet the
required amount by
deadline.
2023
• Ballot measure titled, “Taxpayer
Protection and Government
Accountability Act” or Initiative No. 21-
0042A1, sponsored primarily by the
California Business Roundtable qualified
for the November 5, 2024 General Election
ballot
• June 27, 2024 deadline to withdraw
Background
3 Background
Initiative Sponsor
4 Background
Initiative Opposition
5 Background
Measure’s Major Provisions
Effective Date
• Any new or increased tax or fee
adopted by the Legislature, a city
council, or the local voters after
January 1, 2022.
State & Local Government Taxes
• Amends State Constitution to
expand and define all state and
local levies, charges, and fees as a
tax or exempt charge.
• Increases requirements for voter
approval of new or increased state
and local taxes.
• New or increased taxes must
include sunset date.
• Local advisory measures would be
prohibited.
• Requires voter approval to expand
existing taxes to new territory or
to expand the tax base.
State & Local Government Fees
• Fees and charges may not exceed
the “actual cost” of providing the
product or service for which the
fee is charged.
• Fees and charges paid for the use
of local and state government
property and the amount paid to
purchase or rent government
property must be “reasonable”.
• No fee or charge or exaction
regulating vehicle miles traveled
can be imposed as a condition of
property development.
• May require voter approval of
fines, penalties, and levies for
corporations and property owners
that violate state and local laws.
Local
Government
Impacts
Fees and Taxes
Examples of affected fees and charges:
Charges and fees such as for code enforcement
Commercial franchise fees
Emergency response fees
Advanced Life Support (ALS) transport charges
Document processing and duplication fees
Facility use charges, fees for parks and recreation services, classes, or activities.
Revenue at risk is approximately $2 billion per year including those adopted since Jan. 1, 2022.
Over ten years, $20 billion of local government fee and charge revenues will be at heightened legal peril.
6 Local
Government
Impacts
Fines and Penalties
The initiative converts administratively imposed fines and penalties into taxes unless a new, undefined, and ambiguous “adjudicatory due process” is followed.
This provision jeopardizes the City’s current authority to impose fines and penalties for violations of state and local law. 7 Ongoing Fiscal Impacts
• Limit ability to recover costs
• Reduction in services levels in areas that
are currently revenues offset (e.g., gazebo
rentals, recreational programming,
development permitting and inspections,
ambulance transport, etc.)
• Reduction in community services and
programs, development services staffing
resulting in additional permitting and
inspection delays, and a return to
contracting out medical transport services
• Reduction in ability to generate lease
revenues
• Future tax measures put forward by the
City Council would be subject to increased
approval thresholds and reduced
transparency for voters
8 2023-2024 Legislative Platform Guiding Principles
• Maintaining Local Control
• Promoting Fiscal
Responsibility
• Promoting Economic
Development
• Supporting Funding
Opportunities
9 Legislative Program
Recommended Action:
Approve resolution opposing Initiative 21-
0042A1, “Limits Ability of Voters and State
and Local Governments to Raise Revenues
for Government Services. Initiative
Constitutional Amendment.”