City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: October 5, 2026
Report #:2606-6510
TITLE
Consideration of City Council Positions on State and Local Measures Presented to Palo Alto Voters on the November 3, 2026 Ballot; CEQA status – not a project
RECOMMENDATION
Staff recommends the City Council review and discuss the November 3, 2026 state and local ballot measures and consider adoption of positions as relevant to the City of Palo Alto or desired by the City Council. Staff recommends that City Council consider taking the following suggested positions based on the Legislative Guidelines and previous City Council action:
• Proposition 1 – Support
• Proposition 37 – Support
• Proposition 43 – Oppose
• Public Transit Revenue Measure District (Measure RTM) – City Council already supported • City of Palo Alto Measure J – Support
BACKGROUND
The City Council regularly considers taking positions in an election year on ballot measures presented to Palo Alto voters. This item is intended to inform Palo Alto voters about the upcoming election and provides the City Council the opportunity to hear from residents, discuss, and take positions on measures if desired.
The Secretary of State has qualified 14 statewide measures for the November 3, 2026 election.
Townsend Public Affairs, the City’s legislative consultant, has summarized the statewide measures in Attachment A. Additional information, including impartial analyses and arguments, may be found in the Secretary of State’s Official Voter Information Guide.1 Additionally, there are two (2) local measures that will be on Palo Alto voters’ ballots. Additional information, including 1 California General Election November 3, 2026 Official Voter Information Guide:
https://voterguide.sos.ca.gov/propositions/
impartial analyses and arguments, may be found at the Santa Clara County Registrar of Voters3 and City4 webpages.
ANALYSIS
The below section summarizes the ballot measures, relevant legislative guideline (if available), and suggested positions. For statewide measures, the official title and summary as prepared by the Attorney General are listed; for local measures, the ballot question as received by the Registrar of Voters is listed. The suggested positions are based on the City Council-approved Legislative Guidelines5 and previous City Council action. Staff only suggested positions where the Legislative Guidelines clearly apply.
Statewide
Title Summary
Suggestion and
Relevant
Guideline
Proposition 1:
Authorizes Bonds
for Housing
Affordability
Programs.
Legislative Statue
• Authorizes $11.25 billion in state general obligation bonds for housing affordability programs, including for California veterans, and to finance housing development projects seeking federal tax credits.
• Allocates funds:
o $5.1 billion to build and rehabilitate multifamily rental housing;
o $2.1 billion to acquire, rehabilitate, or preserve affordable housing units, and provide supportive housing for those experiencing homelessness;
o $1.25 billion for state-funded mortgages for California veterans;
o $1.1 billion for homeownership and downpayment
assistance;
o $1 billion for farmworker, tribal, and student housing; o $500 million for housing infrastructure; and
o $200 million to support local housing programs.
Support.
Guideline:
“Supports
additional state
and federal
funding in support
of affordable
housing”
3 Santa Clara County Registrar of Voters List of Local Measures: https://vote.santaclaracounty.gov/list-localmeasures-4 4 City of Palo Alto Municipal Elections: https://www.paloalto.gov/Departments/City-Clerk/Municipal-Elections 5 City of Palo Alto’s 2026 Federal and State Legislative Guidelines:
https://www.paloalto.gov/files/assets/public/v/2/city-manager/legislation/2026-legislative-guidelines.pdf Title Summary
Suggestion and
Relevant
Guideline
Proposition 2:
Increases the
State’s Rainy Day
Fund.
Legislative
Constitutional
Amendment
• Increases California’s Rainy Day Fund, approved by voters in 2014, to provide funding for education, health care, public safety, and other essential services during economic downturns. • Doubles the budget reserve cap from 10% to 20% of General Fund revenues, requiring savings until Fund’s balance equals 20% of General Fund.
• Requires additional savings in years when tax revenues are high. • Increases budget reserves available for education, state debts, and pension obligations.
None.
Proposition 3:
Provides
Permanent
Funding for
Schools and
Health Care by
Extending Existing
Tax on High
Incomes.
Initiative
Constitutional
Amendment
• Makes permanent the existing 2012 voter-approved tax rates for high-income Californians, currently set to expire in 2031. • Rates apply to income over about $371,000 for single filers, $742,000 for joint filers, and $505,000 for heads of household (2025 levels; adjusted annually for inflation).
• Allocates tax revenues 89% to K–12 schools, 11% to community colleges.
• Allows local school boards to decide how revenues are spent; bars use for administrative costs.
• Increases General Fund revenues available for health care, budget reserves, and other programs.
None.
Proposition 4:
Repeals
Prohibition
Against Public
Funding of
Election
Campaigns.
Legislative Statute
• Current law prohibits state and local governments from using public funds for election campaigns except in charter cities and counties.
• This measure repeals that prohibition and allows state and local governments to establish public campaign financing programs for candidates who agree to specified spending limits and meet eligibility criteria.
• Prohibits public funding programs from using funds earmarked for education, transportation, or public safety.
• Prohibits candidates from using public funds for legal defense costs, fines, or repayment of personal loans to campaigns. • Triples maximum fine for campaign contributions by foreign entities.
None.
Title Summary
Suggestion and
Relevant
Guideline
Proposition 5:
Changes Recall
Election Process
For Statewide
Officers.
Legislative
Constitutional
Amendment
• Under current law, voters decide at the same election whether (1) to recall a state officer, and (2) who will replace that officer if recalled.
• Under this measure:
o if the Governor is recalled, the Lieutenant Governor
becomes Governor for the remainder of the term or until a successor is elected;
o for all other recalled officers, the office will remain vacant until filled by a subsequent special election or appointment as specified in existing law; and
o a recalled officer may be a candidate in a special election to fill the office.
None.
Proposition 37:
Creates Loan
Program For
Middle-Income
Buyers of
Qualified New
Homes.
Initiative Statute
• Authorizes up to $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of the purchase price of a “qualified new home” (new construction or first sale of converted nonresidential property, priced below about $1 million–$1.5 million, depending on county, adjusted annually). • Borrowers must be California residents for one year, occupy the home, earn less than twice the area’s median income, and pay at least 3% down.
• Requires that bonds be repaid by homeowners’ mortgage payments, not the State.
Support.
Guideline:
“Promotes the
development and
enhancement of
safe and
affordable housing
and accessible
housing within the
City for all
economic
segments of the
population”
Proposition 38:
Authorizes Bonds
For Immunology
Medical Research.
Initiative Statute.
• Authorizes $8.4 billion in state general obligation bonds for immunology and immunotherapy research (technologies that use body’s immune system to treat disease), with half dedicated to cancer, heart disease, and Alzheimer’s disease.
• Allocates funds equally between (1) a single University of California-affiliated nonprofit medical research institute, and (2) research grants for public or nonprofit universities and institutions.
• Requires funding recipients to sell technology and drugs derived from research in California for 20% below national average price.
• Appropriates money from General Fund to repay bonds;
General Fund receives 10% of licensing royalties until bonds are repaid.
None.
Title Summary
Suggestion and
Relevant
Guideline
Proposition 39:
Prohibits Citizens
From Voting
Unless They
Present
GovernmentIssued
Identification.
Initiative
Constitutional
Amendment
• Prohibits voting by mail unless voter designates a governmentissued identification number for their voter registration. • Invalidates mail ballots if envelope does not include last four digits of a government-issued identification number matching the number designated in the voter’s registration (e.g., if voter designates Social Security number for registration, but provides driver’s license number on envelope, their ballot would not count).
• Prohibits voting in person without presenting governmentissued identification. • Requires elections officials to annually report percentage of each county’s voters whose citizenship status they have verified.
None.
Proposition 40:
Imposes One-Time
Tax on Certain
Taxpayers.
Initiative
Constitutional
Amendment and
Statute
• Imposes one-time tax of up to 5% on certain taxpayers with covered assets valued over $1 billion; covered assets include businesses, securities, art, collectibles, and intellectual property, but exclude real property and some pensions and retirement accounts.
• Allocates 90% of these tax revenues for health care, 10% for food assistance or education-related programs; prohibits using revenues to replace existing funding for these purposes. • Exempts such tax revenues from constitutional requirements for school funding, budget reserves, and state spending limit.
None.
Proposition 41:
Prohibits New
State Taxes That
Exclude Revenues
From State
Spending Limit.
Requires Audits
For New State
Special Taxes.
Initiative
Constitutional
Amendment
• Prohibits any new state taxes that exclude their revenues from the state spending limit approved by voters in 1979.
• For statewide special taxes, requires (1) a pre-election audit of programs that would receive funding from a voter-proposed special tax, and (2) recurring audits of programs funded by special taxes enacted after January 1, 2026.
• It states that other voter-approved measures appearing on the same ballot are void if they conflict with this measure and this measure receives more affirmative votes.
None.
Title Summary
Suggestion and
Relevant
Guideline
Proposition 42:
Prohibits New
State Personal
Property Taxes
and Certain
Retroactive State
Taxes.
Initiative
Constitutional
Amendment
• Prohibits new state taxes on personal property, including business interests, intellectual property, and financial assets (including assets in retirement and investment accounts). • Prohibits new state taxes that apply retroactively based on the taxpayer’s conduct, activities, or a status that occurred before the new tax’s effective date.
• Applies to new taxes that are enacted or take effect on or after January 1, 2026.
• States that other voter-approved measures appearing on the same ballot are void if they conflict with this measure and this measure receives more affirmative votes.
None.
Proposition 43:
Limits Voters’
Ability To Raise
Revenues For
Local Government
Services.
Legislative
Constitutional
Amendment
• Currently, local governments must obtain two-thirds voter approval to impose, extend, or increase special taxes (taxes dedicated to a specific purpose) that they place on the ballot.
However, this two-thirds vote requirement does not currently apply to special taxes put on ballot by voter signature gathering. • This measure would limit voters’ ability to pass voter-proposed local special taxes by raising the percentage of votes needed to approve such ballot measures from a simple majority (over 50%) to a new two-thirds threshold.
• Applies to voter-proposed ballot measures approved after January 1, 2027.
Oppose.
Guideline:
“Supports the
lowering or
maintaining of
voter thresholds
for local revenue
measures”
Proposition 44:
Requires
Community
Health Clinics
Spend 90% Of
Revenue On
Program Services.
Initiative Statute
• Imposes penalties on nonprofit Federally Qualified Health Centers (community clinics providing primary care to medically underserved areas and populations) that spend less than 90% of revenue on “program services” advancing their charitable purpose, including but not limited to patient services.
Department of Public Health may waive spending requirements in exceptional circumstances.
• Authorizes Attorney General to publish guidance defining qualifying expenditures.
• Monetary penalties may be refunded if centers become
compliant within five years.
• Authorizes criminal charges for false reports or artificially increasing spending ratio.
None.
Title Summary
Suggestion and
Relevant
Guideline
Proposition 45:
Modifies
Environmental
Review for Certain
Projects.
Initiative Statute
• Amends California Environmental Quality Act (CEQA) to expedite environmental review for specified project categories (including most housing, transportation, water, health, wildfire mitigation, educational facility, internet access, and clean energy projects). For these types of projects, this measure:
o Sets deadlines for public agencies to complete
environmental review and take required actions.
o Allows expedited review of environmental impacts,
limiting public agencies’ current obligation to consider a range of feasible project alternatives to reduce
environmental impacts.
o Establishes deadlines for filing and resolving lawsuits challenging project approvals; limits evidence courts may consider and relief courts can order.
None.
Local Measures
Title Summary Suggested Position
Public Transit
Revenue Measure
District (Measure
RTM) – Connect
Bay Area Transit
Initiative
To prevent major service cuts to BART and other transit, avoid increased traffic, and reduce pollution by: Preserving BART, Caltrain, VTA, SamTrans, AC Transit, Muni, other transit for everyone, including workers, students, seniors, persons with disabilities; Supporting transit safety, cleanliness,
affordability, reliability; Repairing targeted roads/potholes; Requiring financial transparency, oversight, accountability; shall the measure enacting a 0.5% (Alameda, Contra Costa, San Mateo, Santa Clara counties) and 1% (San Francisco) sales tax for 14 years generating approximately $980,000,000
annually, be adopted?
Support
Prior City Council
Action:
The City Council
endorsed this measure
on March 2, 20269.
9 City Council, March 2, 2026; Agenda Item #4; SR# 2601-5865 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86659&dbid=0&repo=PaloAlto&searchid=4ac36678 -93df-47e6-8ba6-05de931a117d
Title Summary Suggested Position
City of Palo Alto –
Measure J –
Transactions and
Use Tax
City of Palo Alto Community Safety/Services Measure. To provide general city services including repairing Cubberley Community Center for current safety, earthquake,
accessibility standards; upgrading deteriorating electrical systems, wiring, plumbing; acquiring outdoor space/sites; maintaining streets, safe, clean downtown/commercial cores; preparing for natural disasters; repairing deteriorating community spaces, libraries, shall City of Palo Alto’s measure enacting a 0.5% (1/2¢) sales tax, providing approximately $15,600,000 annually until ended by voters, with published financial audits, all funds used locally, be adopted?
Support.
Prior City Council
Action:
Cubberley acquisition
and renovation funding
is a 2026 City Council
Priority11 and City
Council voted to place
the measure on the
ballot.12
FISCAL/RESOURCE IMPACT
There is no financial impact associated with adopting support or oppose positions on ballot measures. The City Council annually budgets for legislative advocacy services, and these efforts are led by staff in the City Manager and City Clerk’s Office with stakeholder support across departments.
STAKEHOLDER ENGAGEMENT
Staff from multiple departments are involved in the City’s legislative advocacy process. Staff meet regularly with the City’s legislative consultants to review pending state activity, including legislation, grant opportunities, and ballot measures with potential impacts to the City.
Departments reviewed this list of ballot measures and propositions.
ENVIRONMENTAL REVIEW
The City’s legislative advocacy activities are not a project under section 15378(b)(5) of the California Environmental Quality Act Guidelines (administrative activities that will not result in direct or indirect physical change in the environment).
ATTACHMENTS
Attachment A: TPA Ballot Initiatives Memo
APPROVED BY:
Mahealani Ah Yun, City Clerk
Ed Shikada, City Manager
11 City Council January 24, 2026 Action Minutes:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85782&dbid=0&repo=PaloAlto 12 City Council. June 8, 2026; Agenda Item #14; SR# 2603-6081 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=887096&dbid=0&repo=PaloAlto