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7 FROM: OF
BY: VANIAH DE ROJAS, INTERIM ASSISTANT CITY MANAGER
RESOLUTION TO OPPOSE BALLOTNO. 11 '
PROTECTION AND GOVERNMENT ACCOUNTABILITY
VOTERS'INITIATIVE) WHICH RESTRICTS AND LOCAL
AUTHORITY
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That the City Council adopt
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In 2018, theFairness,.. - . Accountability rr r Arndt.
circulatedfl, was to. • the November 2018ballot.- would have drastically limited local revenue authority. Through the successful work and advocacy of ihe League of California Cities and its coalition of partners, the measure's proponents, the California Business Roundtable (CBRT), withdrew the initiative from the ballot in June 2018.
On 1 the CBRT filed the "Taxpayer r - . and Government
Accountability ' • - 114'CaliforniaAttorney General's
Office. This measure would limit local revenue authority by:
Adopting new and stricter rules for raising state and local taxes, fees, assessments, • property -related
*Creating new ways to challenge or repeal these revenue raising measures that disrupt fiscal certainty.
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RESOLUTION TO OPPOSE BALLOT INITIATIVE NO. 21-0042A1
MARCH 14, 2023
PAGE 2
On -•ruary 1, 2023, the CBRT announced that Ballot- 21-0042AI qualified for the November 1 ballot.
As previously mentioned this measure would limit local revenue authority. More specifically, the ballot measure has the following major provisions:
Fees and Charges:
• Except for licensing and other regulatory fees, fees and charges 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." The burden to prove the fee or charge does not exceed "actual cost" is changed to "clear and convincing" evidence.
Requires fees and charges paid for the use of local and state government property and the amount paid to purchase or rent government property to be "reasonable." These fees and charges are currently allowed to be market - based. Whether the amount is "reasonable" (introducing a new legal standard aiming to force below market fee and charge amounts) must be proved by "clear and convincing evidence." The standard may significantly reduce the amount large companies (e.g., oil, utilities, gas, railroads, garbage/refuse, cable, and other corporations) will pay for the use of local public property. • Prohibits fees on new development based on vehicle miles traveled.
Taxes:
• Taxes and fees adopted after Jan. 1, 2022, that do not comply with the new rules, are void unless reenacted.
• Invalidates Upland decision that allows a majority of local voters to pass special taxes. The measure specifies that taxes proposed by the initiative are subject to the same rules as taxes placed on the ballot by a city council. • Expressly prohibits local advisory measures which allow local voters to express a preference for how local general tax dollars should be spent. • Requires voter approval to expand existing taxes (e.g., Utility, Transient Occupancy) to new territory (e.g., annexations) or to expand the tax base (e.g., new utility service)
• New taxes can only be imposed for a specific time period. • City charters may not be amended to include a tax or fee. • All state taxes require majority voter approval.
RESOLUTION TO OPPOSE BALLOT INITIATIVE NO. 21-0042A1
MARCH 14,2023
PAGE 2
Fines and Penalties:
May require 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.
Due to the wide-ranging negative financial impacts that this ballot initiative would have on cities, the League of California Cities is requesting cities to adopt a city resolution to oppose the ballot initiative and demonstrate how harmful this ballot initiative would be to vital local services in our community. Currently, over 100 cities have passed resolutions.
Fiscal Responsibility
Quality of life, Safety and Infrastructure
There is no financial impact related to this action, however if Ballot Initiative 21- 0042A1 were to pass, it would have significant future financial impacts to the City.
W. E 9,
Attachment A: Resolution
Attachment B: Initiative 21- 0042A1
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WHEREAS, an association representing California's wealthiest corporations and developers is spending millions to push a deceptive proposition aimed for the November 2024 statewide ballot; and
WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and infrastructure, and would limit voter input by prohibiting local advisory measures where voters provide direction on how they want their local tax dollars spent; and
WHEREAS, the 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 local infrastructure and our environment; and
WHEREAS, the measure 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; and
WHEREAS, 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; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES VETEBY TESOLVE• •
SECTION 1. The City of Downey, opposes Initiative 21-0042A1 and 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.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution..
APPROVED AND ADOPTED this 14th day of March, 2023,
MARIA ALICIA DUARTE, CMC
City Clerk
CLAUDIA M. FROMETA, Mayor
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I AEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of thz City of Downey at a Regular meeting held on the 14 th day of March, 2023, by the following vote, to wit:
A
A A
MARIA ALICIA DUARTE, CIVIC
City Clerk
BELL, McANDREWS & IEEILTACHK,
ATTORNEYS AND COUNSELON5 AT LAW
455 CAPITOL MALL, SUITE 600
SACRAMENTO, CALIFORNIA 95014
(Ole) 442-7757
FAX (910) 4-42-7759
www.bmhlaw.com
Anabel Renteria,
Initiative Coordinator
9tate of California
PO Box 994255
Sacramento, CA 94244-255MI
W1111 111V4 Coll 4 1 V4 1
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RECEIVED
JAN 0 4 2022
a-UrjAnVE COOEMINATOR
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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.
, I . . is . I .
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The Taxpayer Protection and Government Accountability Act 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 "fee' 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 how taxes 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. City 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. 31d) Every levv, chaMe., or gt2gign of an kind i e_d state low is either a tax or an exeMD chgr ge.
LWL11 fe4 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 tQ,thggkgtgrot ,and approved by a moicritv 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. Loch ct shall include.-
0) A sgggcffl k dALoation —of tim—e that the tax will be j!rgosed and _on e _Coote of the annual am un to be derived from the tog.
18) A sDeci ftc gad enforceable limitation on how the revenue from the tax can be spent.
I the rev—e—nuae- Lro_mthe tax care,�§Aen sent unres ricdaneralrevenjLte�h n a statetntthot the tax revenue can beMgnt,fgar "unrestricted eneral revenue gyLposes" shall be included in a se orate p
stand-alone section. An It 0 ;ed cyan to the t -PC g4MLed by X_gro e SqLqe As_e_oL_he revenue from the tax shall a
se orate act that Is passed b not less than two-thirds of all members lected to each pf Lhg_tWo hoy5e of the Legistat Wo yy�� and s to the g!�
Code shall, for each measurgmvi in for the i o ition of a taxincluding a measu_�ropqs_i elector Dursuant to Article 11, include:
MLMe tVe grad amount or rote of he tax,
jg�e duration of tax* and
PA
As used in this section x" means every" levy, charge, or exactior. "ta
of any kind imposed by the exomotchoxom*bw Pt the MION, fe) As used in Ws secr •t Chme trwaft cWthe Mn6wh!W
LU 44 A Bond charge for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the feasomWe 17CtUOI costs to the State of providing the service or product to the payor.
LU W 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. 0 M
of state property, except charges governed by Section 15 of Article XI. imposed by the judicial branch of government
!Ln&Ment oDMMt a violation of law.
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1 kornmCgggavidi w inq•EALt 4.7 of Division 3 of Title 2 of the Government Code. &WAxytz?s���hirOiad.i,;t,ted-t,rterJaivaDv, 1,ZfZZ;040, but pilortotte efective date of tWis arst. tkat was Tot adonted in comoliance with the reauirements of this section is void 12 months after the in compliance with the requirements of this section,
that a levy, charge, or other exaction is an gMLrptxhg62gAad not a tax. Me Sote bggq.Lhg Aqtgkn o VY I'll ,
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Section 5. Section I of Article X111 C of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
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LqLW "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.
L�L44� "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.
fl2WAs used in this article, qndkik�tlon9q(Attk� #� "tax" means eve an�-Ievy, charge, or exaction of any kind, imposed by a local 4oVefm*tefA k�k jhkil �go ggftLchartl $-I# (il As used ih this seq6qM: 2�K�
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LU (24 A reasonable charge ,inVosW 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 feasenabW actual costs to the local government of providing the service or product.
LVW A charge Unposed 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. rental, or lease of local government property.
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Section 6. Section 2 of Article X111 C of the California Constitution is amended to read; Sec.2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) 11
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 low wdterfrer ro e b tla v rti od o r 1 _r, 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)
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sub ivisio"41 No local low
may lmposere*teAd—,of4wease 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.
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Section 7. Section 3 • Article XIII D • the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, of charge, orsurchorqe.,tySfy_d_ing,osurChcar Q!Lbased _on the v-j2Lu-q—Ofor. M-e-rh& shall be assessed byenyne" upon any parcel of property or upon any person as an incident of property ownership except:
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(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article. 7 (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. 0 Allgroceeds frorn the tax � shaft be lina to low to the _d1stdCLsjMith1n -gLg WA��� _Igned
the couaties.
Sec. 14. All property taxed by Itote or local government shall be assessed in the county, city, and district in which it is situated. Notwithstan_din -on thgr r al"o gqyMVssh V ovision of low. such state or 12c Le,gogrtione4oc o jr to low to the distrAtsjgi :thin 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 P
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 ♦, the voters • the State of California and thereafter subjected to a legal T%fefWOW-x4 P71
to defend this Act, then the following actions shall •- taken:
and vigorously defend this Act • behalf • the State • California. #in!F WpqnpArtaw-ra
due diligence in • the qualifications • independent counsel and shall •a written Act. The written • shall be made publicly available upon • 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.
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