TO: CITY COUNCIL
FROM: CITY ADMINISTRATOR
DATE: MARCH 1, 2022
Placentia City Council
SUBJECT: ADOPT RESOLUTION IN OPPOSITION OF THE STATE BALLOT MEASURE
RESTRICTING VOTERS' INPUT AND LOCAL TAXING AUTHORITY
FISCAL
IMPACT: There is no fiscal impact associated with the recommended action.
SUMMARY:
On Jan. 4, 2022, the California Business Roundtable filed the "Taxpayer Protection and Government Accountability Act" or AG# 21-0042A1. This measure is far more detrimental to cities than the a similar measure filed in 2018, because it makes it more difficult for local voters to adopt measures needed to fund local services and infrastructure. In addition, the aforementioned measure would limit voter input by prohibiting local advisory measures by which voters provide direction on how local tax dollars should be spent.
The League of California Cities (Cal Cities), along with a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly oppose this initiative. Staff is requesting City Council adopt a Resolution to oppose Initiative 21- 0042A1 the "Taxpayer Protection and Government Accountability Act" and state ballot measure restricting voters' input and local taxing authority. If adopted, this resolution will be submitted to Cal Cities Ballot Measures Department.
RECOMMENDATION:
It is recommended that the City Council take the following action:
Adopt Resolution R-2022-08, a Resolution of the City Council of the City of Placentia, California, opposing Initiative 21-0042A1 the "Taxpayer Protection and Government Accountability Act," which would limit local revenue authority.
DISCUSSION:
In 2018, the "Tax Fairness, Transparency and Accountability Act" or (AG#17-0050 Amendment #1), was being circulated to qualify for the November 2018 ballot. This initiative would have drastically limited local revenue authority. Through the successful work and advocacy of Cal Cities and its coalition, the measure's proponents withdrew the initiative from the ballot in June 2018.
1. f.
Mar. 1, 2022
City Council Agenda
March 1, 2022
On January 4, 2022, the California Business Roundtable filed the proposed "Taxpayer Protection and Government Accountability Act" or AG# 21-0042A1. This measure is far more detrimental to cities than the measure filed in 2018, because it limits voters' input, adopts new and stricter rules for raising taxes and fees, and makes it more difficult to hold state and local law violators accountable. Cal Cities, along with a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly oppose this initiative.
During its December 2021 meeting, the Cal Cities' Board of Directors voted unanimously to oppose Initiative AG #21-0026A1. Following the Board's unanimous decision, a coalition of public safety, labor, local government, and infrastructure advocates joined together to fight against this measure. A summary of AG# 21-0042A1 is as follows:
Summary: The measure limits the voters' input, adopts new and stricter rules for raising taxes and fees, and makes it more difficult to hold state and local law violators accountable. 1) Limit Voter Authority and Accountability
• Limits voter input. Prohibits local voters from providing direction on how local tax dollars should be spent by prohibiting local advisory measures. ■ Invalidates the Upland decision that allows a majority of local voters to pass special taxes.
Taxes proposed by the Initiative are subject to the same rules as taxes placed upon the ballot by a City Council. All measures passed between January 2022 and November 2022 would be invalidated unless reenacted within 12 months. 2) Restrict Local Fee Authority to Provide Local Services ■ Impacts franchise fees. Sets new standard for fees and charges paid for the use of local and state government property. The standard may significantly restrict the amount oil companies, utilities, gas companies, railroads, garbage companies, cable companies, and other corporations pay for the use of local public property. Rental and sale of local government property must be reasonable, which must be proved by clear and convincing evidence.
■ 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. 3) Restrict Authority of State and Local Governments to Issue Fines and Penalties for Violations of Law
• Requires 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.
4) Restrict Local Tax Authority to Provide Local Services • Requires voter approval to expand existing taxes (e.g., UUT, use tax, TOT) to new territory (e.g., annexation) or expanding the base (e.g., new utility service). ■ City Charters may not be amended to include a tax or fee.
City Council Agenda
March 1, 2022
• New taxes can be imposed only for a specific time period. • Taxes adopted after January 1, 2022, that do not comply with the new rules, are void unless reenacted.
All state taxes require majority voter approval.
• Prohibits any surcharge on property tax rate and allocation of property tax to state. 5) Other Changes
• No fee or charge or exaction regulating vehicle miles traveled can be imposed as a condition of property development or occupancy.
FISCAL IMPACT:
The proposed Taxpayer Protection and Government Accountability Act of 2022 would significantly impact local government municipal finances and services. According to Cal Cities this measure would place billions of dollars currently dedicated to state and local services at risk. In addition, it could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services, and more.
Prepared by:
Jenn tt O e
Ass ant to the City Administrator/
Economic Development Manager
Reviewed and a =od:
Damien R. Arrula
City Administrator
Attachments:
1. Resolution R-2022-08 — Opposition to Ballot Measure
2. Initiative 21-0042A1 "The Taxpayer Protection and Government Accountability Act"
3. Cal Cities' Analysis
4. California Local Government Finance Almanac's Fiscal and Program Effects