Written Communications — Legislative Review Committee, April 6, 2026

LRC 4-06-2026
#4
Legislative Update
Written Communications
From: Liang Chao
To: City Clerk
Subject: Written Communication for the first LRC meeting Date: Monday, April 6, 2026 1:11:10 PM
Attachments: image.png
2026 Rev & Tax_March_Policy Committee Slides.pdf
Please enter this into the written communication for the first LRC meeting.

I attended the March 26 Cal Cities Revenue Taxation Policy Committee.

There are the bills, including one upcoming ballot measure, considered by the committee.

Attached is the presentation slides for your reference. ===========
Initiative 25-0006 “Local Taxpayer Protection Act to Save Proposition 13” - voted to oppose
The committee voted to oppose the "Taxpayer Protection Act" ballot measure with a big margin - 31 (oppose) 7 (support) 3 (abstain), even though the staff analysis/recommendation is pretty biased towards supporting it.

Proponent Guest Speaker:Susan ShelleyVice President of Communications, Howard Jarvis Taxpayers
===========
SB 922 (Laird) Vehicles: local agency charges: use of streets or highways This measure would clarify and reaffirm local authority related to the recovery of street maintenance and repair costs associated with providing essential public services.

Cal Cities Position: Sponsor
Payment rounding
SB 1005 (Caballero) Local agency: payment: rounding amount This measure would provide clarity to public agencies following the end of penny production by the federal government.

Cal Cities Position: Co-Sponsor
SB 1349 (Gonzalez) Taxation: tax expenditures: California Tax Expenditure Review Board This measure would establish the California Tax Expenditure Review Board as an independent advisory body to assess major tax expenditures and make recommendations to the Legislature.

Cal Cities Position: Support (letter pending)
SB 1172 (Hurtado) Sales and use taxes: local agencies: administration This measure looks to limit the compensation that a consultant can receive for negotiating a sales tax sharing agreement between a local agency and a private retailer.

Cal Cities Position: Pending
AB 2192 (Gonzalez) Sales and use taxes: farm equipment and machinery.

This measure would exempt farm equipment and machinery from the Bradley Burns local sales tax, as well as any locally approved transaction and use tax. The bill appropriates $200 million, one-time, to offset fiscal impacts to local agencies.

Cal Cities Position: Pending
SB 1415 (Arreguín) Real property tax: welfare exemption: moderate-income housing This measure would create a new property tax welfare exemption for developers who build market-rate housing.

Cal Cities Position: Pending
AB 2214 (Jackson) Taxation: tax expenditures: California Tax Expenditure Review Board This measure would require the State Treasurer to allocate 5-10% of the Local Agency Investment Fund to fund a community reinvestment account for financial institutions to fund specified projects.

Cal Cities Position: Pending
AB 1953 (Lowenthal) Short-term rentals: emergencies and special events This bill seeks to raise the caps of allowed short-term rentals in areas impacted by natural disasters or other limited events (Olympics).

Cal Cities Position: Pending
Liang Chao
Vice Mayor
City Council
[email protected]
408-777-3192
Strengthening California Cities
through Advocacy and Education
Policy Committee Meeting
Revenue and Taxation
March 26, 2026
Ben Triffo
Legislative Affairs, Lobbyist
Leila Romero
Policy and Legislative Affairs Analyst
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Welcome and Introductions
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Welcome and Introductions
• Chair Joe Vinatieri
Mayor, City of Whittier
Housekeeping
• Please raise your hand or tent card to ask a
question or make a comment.
• A Cal Cities staff member will bring you a
microphone.

Committee Ground Rules
• Please give a “thumbs-up” or use another silent
indicator if you agree or want to emphasize a point
someone else has made.
• Please be mindful of time to allow the opportunity for everyone to speak. Try to limit comments to three
minutes where appropriate.
• As always, please remain respectful of one another over the course of the conversation.

Committee Ground Rules
• Remember to state your name and city when you first
address the committee. This helps make sure everyone
knows who you are and what city you represent.
• Wait for the Chair to recognize you to speak.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Agenda Overview
• Public Comment
• Initiative 25-0006
• Update on City Manager Sales Tax Working Group
• State Legislation and Budget Update and Roundtable
• Economic Development and Attracting New Businesses
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Committee Introductions
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Public Comment
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Upcoming 2026 Events
April 22-24, 2026 Sacramento, CA
City Leaders SUMMIT

CONFERENCE

THE MUNICIPAL REVENUE

SOURCES HANDBOOK
New edition!
The definitive guide to navigating municipal finance in California.

Purchase your copy today!
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Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Initiative 25-0006
“Local Taxpayer Protection
Act to Save Proposition 13”
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Initiative 25-0006A1
• Proposed Constitutional Amendment
• Titled: Local Taxpayer Protection Act to Save Proposition 13 • Sponsors:
 California Business Roundtable
 Howard Jarvis Taxpayers Association
 California Business Properties Association
 Spent $10+ million to qualify this measure; over $70 million since 2018 sponsoring similar measures.
• Status: Proponents submitted 1.34 million signatures; pending qualification with the California Secretary of State for the November 2026 statewide ballot.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Key Terms
• Real Property Transfer Tax (RPTT)
 27 charter cities have adopted RPTTs.
 A city that imposes a RPTT may not also impose a
Documentary Transfer Tax (DTT).
 There is currently no limit to the RPTT rate a charter city can charge.
 General law cities cannot impose a RPTT.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Key Terms
• Parcel Tax
 “Special” non-ad valorem tax.
 Generally, either a flat per-parcel rate or a variable rate depending on the size, use and/or number of
units on the parcel.
• Citizens’ Initiative/“Upland Loophole”
 Voter-initiated local special tax measure passed by
a simple majority.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Provisions of Initiative 25-0006A1
• Requires special taxes adopted via citizens’ initiative to pass with a 2/3 majority (closing the “Upland
Loophole”).
• Prohibits Real Property Transfer Taxes.
• Requires all parcel taxes to pass with a 2/3 majority. • Makes null and void taxes not in compliance with the
measure on December 31, two years following the
passage of this measure.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Statewide Impacts
• Annual loss of $2 - 3 billion of local government revenues due to invalidated taxes.
• 27 cities and 2 counties directly impacted.
• Impacted charter cities could go to the ballot to adopt the Documentary Transfer Tax authorized by R&T Code
11911 (.11%).
• Any charter city could not impose a real property transfer tax going forward.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org These taxes can vary…
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org These taxes can vary…
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Impacted Cities
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Initiative 25-0006
Proponent Guest Speaker:

Susan Shelley
Vice President of
Communications, Howard Jarvis
Taxpayers

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Initiative 25-0006
Opponent Guest Speakers:

Lisa Soghor, Assistant City Manager, City
of Culver City
Culver City Real Property Transfer Tax
Measure RE
• Approved by voters Nov. 3, 2020
• Implemented a marginal tax rate with four tiers
• Allows City to adjust the tiers by CPI
• Special provisions for affordable and multi-family housing • Effective April 1, 2021
Marginal Tax Rates
Tax Tiers approved by voters:
• 0.45% on amounts from $0 to $1,499,999*
• 1.5% on amounts from $1,500,000 to $2,999,999
• 3.0% on amounts from $3,000,000 to $9,999,999
• 4.0% on amounts $10,000,000 and above
*Tax rate remains unchanged for properties sold below $1.5 million Special Provisions
Affordable and Multi-Family Housing
The entire value of the sale is taxed at the pre-existing 0.45% rate in the following cases:
• 100% deed-restricted affordable housing
• First transfer of newly constructed multi-family housing Local Development Activity
Increased Post-Measure RE
Housing applications have increased 1080% while Measure RE is in effect City’s Current Development Pipeline
There are currently 69 projects in development in Culver City:
• Residential
• 41 Projects in Development
• 4,473 Residential Units
• 660 Affordable Housing Units
• Commercial
• 28 Projects in Development
• Over 1 million square feet of commercial space
Housing Increases Service Costs
As a result of Measure RE, the City’s Real Property Transfer Tax revenue increased from $3-4 million to $8-9 million annually
helping to off-set increased services costs
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Initiative 25-0006
Opponent Guest Speakers:

Evan McLaughlin, Political Director, CA
Professional Firefighters
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Update on City Manager Sales Tax
Working Group
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Board Action Overview
• Overview: After a robust discussion, the Cal Cities Board of Directors took the following actions on recommendations from the Revenue and Taxation Policy Committee which originated from the City Managers Sales Tax Working Group.
• The Board rejected policy related to:
 A 50/50 split of Bradley-Burns sales tax revenues generated from ecommerce transactions.
 A plus or minus 5% flexibility band.
 Prospective application, excluding revenues from existing sales tax sharing agreements from any split.
 Five-year phase-in following CDTFA implementation.
 A plus or minus 20% volatility band shall be used when reallocating revenues, whereby revenues gained by a city in excess of 20% would be used to mitigate revenue losses greater than 20% for cities negatively impacted by the reallocation of the Bradley-Burns.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Next Steps/Ongoing Work
• Board Direction: Pursue statutory change to reallocate county pool use tax from out-of-state e-commerce transactions to destination cities.
 Noted the need for additional data.
• Ongoing Work: Continue exploring broader tax reform to increase revenue for all cities.
 This includes digital goods.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org 2026 Advocacy Priorities
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org 2026 Cal Cities Advocacy Priorities

1. Protect and enhance local revenues and
expand economic development tools.

2. Strengthen partnerships with the state to
improve public safety.

3. Secure investments to prevent and reduce
homelessness and increase the supply of
affordable housing.

4. Strengthen climate change resiliency and
disaster preparedness.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Legislative and Budget
Update/Roundtable
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Cal Cities Bill Search
The Cal Cities bill search feature on our website will give you all the information you need on pending legislation.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org State Legislative Process
The Committees We Work With
Assembly Revenue and
Taxation Committee
• Chair: Mike Gipson (Carson)
• Vice Chair: Kate Sanchez
(Temecula)
• Asm. Michelle Rodriguez (Chino)
• Asm. Carl DeMaio (Valley
Center)
• Asm. Robert Garcia (Colton)
• Asm. Tina McKinnor (Inglewood)
• Asm. Sharon Quick-Silva
(Fullerton)
Senate Revenue and Taxation
Committee
• Chair: Jerry McNerney
(Pleasanton)
• Vice Chair: Marie Alvardo-Gil
(Jackson)
• Senator Angelique Ashby
(Sacramento)
• Senator Tim Grayson (Concord)
• Senator Thomas Umberg (Santa
Ana)
The Committees We Work With
Assembly Local Government
Committee
• Chair: Juan Carrillo (Palmdale)
• Vice Chair: Tri Ta (Westminster)
• Asm. Natasha Johnson (Lake
Elsinore)
• Asm. Blanca Pacheco (Downey)
• Asm. James Ramos (Highland)
• Asm. Blanca Rubio (Baldwin Park)
• Asm. Catherine Stefani (San
Francisco)
• Asm. Chris Ward (San Diego)
• Asm. Lori Wilson (Suisun City)
Senate Local Government
Committee
• Chair: María Durazo (Los Angeles)
• Vice Chair: Steven Choi (Irvine)
• Senator Jesse Arreguín (Oakland)
• Senator Angelique Ashby
(Sacramento)
• Senator Sabrina Cervantes (Riverside)
• Senator John Laird (Santa Cruz)
• Senator Kelly Seyarto (Murrieta)
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org FY 2026-27 State Budget
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org A trip down memory lane…
The last few years have been a
rollercoaster:
• 2022 – $90 billion surplus.
• 2023 – $31 billion deficit.
• 2024 – $47 billion deficit.
• 2025 - $18 billion deficit
Governor’s proposed budget
• $348.9 billion balanced
budget.
• $23 billion in reserves.
• $2.9 billion deficit.
• Outyear deficits north of
$20 billion.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org How are we paying for this?
But what does the LAO say?
• The LAO forecasts a
$18 billion deficit for FY
2026-27.
• Outyear deficits north of
$35 billion.
• Notes economic
headwinds.
• Newsom Administration
acknowledges
challenges but doesn’t
address them.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Revenues have improved
• Up $6.1 billion over January Budget assumptions
(December through February).
• Potential surplus this year or next.
 LAO notes AI boom unlikely to last.
• May Revision will contain additional solutions to solve for future deficits.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Uncertainty ahead…
• “Iran War” impact on the stock market.
 Still up from a year ago.
• Worldwide oil shock.
• Short-term revenue surge continues.
 Revenues lag the stock market by six to twelve months. • Future structural deficits remain.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Uncertainty ahead…
• GDP growth seems to be slowing
 2025 Q4 revised down to 0.7%
• Inflation in California is greater than the national rate.  U.S. – 2.4%
 CA – 3.2%
• Unemployment rate increased.
 4.4%, up 0.1%
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Revenues and the stock market
Source: LAO
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Revenue and Taxation Bills
Road repair
SB 922 (Laird) Vehicles: local agency charges: use of streets or highways
This measure would clarify and reaffirm local authority related to the recovery of street maintenance and repair costs associated with providing essential public services.

Cal Cities Position: Co-Sponsor
Sales tax
SB 1172 (Hurtado) Sales and use taxes: local agencies:
administration
This measure looks to limit the compensation that a consultant can receive for negotiating a sales tax sharing agreement between a local agency and a private retailer.

Cal Cities Position: Pending
Sales tax
AB 2192 (Gonzalez) Sales and use taxes: farm equipment and machinery.

Cal Cities Position: Pending
Property tax
SB 1415 (Arreguín) Real property tax: welfare exemption:
moderate-income housing
This measure would create a new property tax welfare exemption for developers who build market-rate housing.

Cal Cities Position: Pending
Taxes generally
SB 1349 (Gonzalez) Taxation: tax expenditures: California Tax Expenditure Review Board
This measure would establish the California Tax Expenditure Review Board as an independent advisory body to assess major tax expenditures and make recommendations to the Legislature.

Cal Cities Position: Support (letter pending)
Financial reporting
AB 2214 (Jackson) Taxation: tax expenditures: California Tax Expenditure Review Board
This measure would require the State Treasurer to allocate 5-10% of the Local Agency Investment Fund to fund a community reinvestment account for financial institutions to fund specified projects.

Cal Cities Position: Pending
Short-term rentals
AB 1953 (Lowenthal) Short-term rentals: emergencies and special events
This bill seeks to raise the caps of allowed short-term rentals in areas impacted by natural disasters or other limited events (Olympics).

Cal Cities Position: Pending
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org High Speed Rail Authority
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org HSRA Business Plan
• Gain authority to enter and lead a tax increment
financing district.
 Half mile radius of planned stations
 Sales and property tax increment at risk
 Land use authority
• Likely included in budget.
• Constitutional and legal concerns.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Property transfer tax reform
• Vehicle may be AB 698 (Wicks).
• Looking to modify transfer taxes:
 Cap rates
 Limit applicability
 Convert to a “net” tax
 Retroactive
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Tax Exemptions
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Local agencies and sales tax
• Should local agencies be exempt from paying sales
tax?
• Currently, do not pay property tax.
• Precedent in other states.
• Are there risks?
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org LAO Tax Reform Report
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Published on 3/24/26
• The LAO report “Comparing Options to Raise and Lower Taxes” put forward a range of options for the Legislature to consider:
 Tax Increase Options
 Major Tax Increase Options
 Tax Decrease Options
• The report took into consideration:
 Budgeting (Growth, Stability, and Predictability)
 Economy
 Taxpayer Experience
 Progressivity
 Fairness
• Many proposals had little to no direct impact on cities, other could result in dramatic change.

Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Tax Increase Options
• 13 options that raise taxes between $1 and $3 billion annually.
• Some proposals that could impact cities:
 Quarter-cent sales tax increase
 Tax digital goods
 Soda tax
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Major Tax Increase Options
• 8 options that raise taxes between $10 and $15 billion annually.
• Some proposals that could impact cities:
 1.25 percentage point sales tax increase
 Increase “Big Three” Taxes (income, corporation, and sales taxes)
 Tax consumer services
 Eliminate tax expenditures and broaden the base
 “Split Roll” property tax
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Tax Decrease Options
• 9 options that lower taxes between $1 and $3 billion
annually.
• Some proposals that could impact cities:
 Quarter-cent sales tax decrease
 Expand sales tax exemptions for business equipment
 Reduce gas and diesel taxes
 Exempt $10,000 of value from vehicle license fee
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Thoughts?
Strengthening California Cities through Advocacy and Education @calcities @calcities @calcities.org Economic Development and
Attracting New Businesses
Guest Speaker:

Timothy Kelly, President, Imperial
Valley Economic Development
Corporation
Strengthening California Cities
through Advocacy and Education @calcities @calcities @calcities.org THANK YOU!
The next Revenue and Taxation Policy Committee meeting is June 4, 2026, • 9:30 am – 12:30 pm, Virtual.

Strengthening California Cities
through Advocacy and Education @calcities @calcities @calcities.org

CONNECT
Ben Triffo
Legislative Affairs, Lobbyist
[email protected]

Legislative Review CommitteeApril 6, 2026

Legislative Review Committee
April 6, 2026