DATE: March 18, 2024
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Marlene Subhashini, Assistant City Manager
DEPARTMENT: City Manager
SUBJECT: RESOLUTION OPPOSING A POTENTIAL NOVEMBER 2024
BALLOT MEASURE: THE CALIFORNIA BUSINESS
ROUNDTABLE “TAXPAYER PROTECTION AND GOVERNMENT
ACCOUNTABILITY ACT”
RECOMMENDATION
It is recommended that the City Council adopt a Resolution (Attachment 1) opposing a potential November 2024 statewide ballot measure: The California Business Roundtable’s (CBRT) Taxpayer Protection and Government Accountability Act and find the action exempt under CEQA pursuant to CEQA Guidelines section 15061(b)(3).
EXECUTIVE SUMMARY
The Taxpayer Protection and Government Accountability Act (“CBRT measure”), is an initiative proposed for the November 2024 State Ballot. Sponsored by CBRT, the measure proposes significant new tax and fee limitations on both state and local governments, reversing numerous court decisions, and retroactively voiding any state or local laws, decisions, or administrative actions in conflict with its provisions enacted after January 1, 2022. If passed, the measure would greatly limit the ability of voters and state and local governments to raise revenues to provide government services and fund critical infrastructure projects. The measure would amend the California Constitution with provisions that limit voters’ authority and input, adopt new and stricter rules for raising taxes and fees, and may make it more difficult to impose fines and penalties for violation of state and local laws. The League of California Cities (Cal Cities), along with a broad coalition of local agencies and other partners, strongly oppose this initiative.
Staff presented this item to the City Council on March 4, 2024. The City Council, by Minute Order No. 1966, directed staff to prepare a Resolution in opposition of the measure.
BACKGROUND/ANALYSIS
In 2018, a proposed constitutional initiative, the “Tax Fairness, Transparency and Accountability Act” was circulated to qualify for the November 2018 Ballot. This initiative was supported by the CBRT and would have significantly impacted local revenue authority. The initiative was withdrawn due to strong opposition from Cal Cities, and other coalition partners. On January 4, 2022, the CBRT filed the "Taxpayer Protection and Government Accountability Act" (Initiative No. 21-0042A1). On February 1, 2023, the Secretary of State certified that Initiative #1935 – a measure that would amend the California Constitution to change the rules for how the state and local governments can impose taxes, fees, and other charges is eligible to appear on the ballot at the November 5, 2024, Statewide General Election.
The proposed constitutional initiative is sponsored by CBRT. The CBRT is a non-partisan organization comprised of the senior executive leadership of the major employers throughout the state (and considered to be the lobbying arm of the largest and wealthiest corporations in California).
In September 2023, Governor Gavin Newsom joined the State Legislature and former President pro Tempore of the California State Senate John Burton to file an emergency petition for writ of mandate with the California Supreme Court, asking the court to conduct preelection review of the Taxpayer Protection and Government Accountability Act (Initiative #1935) and prevent the measure from being placed on the November 2024 Ballot. The California Supreme Court did grant a hearing to rule on the petition filed by Newsom, and Burton to withhold the CBRT measure from the ballot. The matter will likely be set for argument in March or April and a decision is likely by the June ballot-printing deadline. While it is uncertain whether the Court will agree with the claims made by the plaintiffs, it is a positive development that the case will be deliberated.
The City of Foster City relies on the use of fees, taxes, and other charges to provide vital core services to the community, including infrastructure and public safety services. The proposed CBRT measure would create detrimental fiscal implications for the City, potentially impacting core services to the community, which would negatively impact the quality of life of Foster City residents and businesses.
For a complete background/analysis, please refer to the March 4, 2024 City Council Meeting Staff Report (Attachment 2). Upon Council approval, staff will email a copy of the adopted resolution to the League of California Cities at [email protected].
Link to the full text of the ballot initiative: Initiative 21-0042 California Environmental Quality Act
This proposed action is not subject to review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.), because it does not involve any commitment to a specific project which could result in a potentially significant physical impact on the environment; and, constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
Passage of the CBRT measure would have a significant fiscal impact to the City.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 – Resolution
Attachment 2 – March 4, 2024 City Council Meeting Staff Report