CITY OF SAN LEANDRO
CITY COUNCIL ANNUAL PLANNING SESSION
Discussion of San Leandro Revenues
February 25, 2023
Introduction: KNN Public Finance
1 MELISSA SHICK
Director
[email protected]
(510) 208 – 8226
17 years as public agency staff, public finance
banker, and municipal advisor
Diverse city client base – non-transaction
consulting services and various financing
types and structures
42 years experience as city staff, rating
analyst, and municipal advisor
Active in capital planning, alternatives
analysis, revenue analysis, policy
development
DAVID BRODSLY
Managing Director
[email protected]
(510) 208 – 8205
Discussion Objectives
2 1) PROVIDE BACKGROUND OF SAN LEANDRO REVENUES
» Current Revenue Sources
» Prior Voter Approval Successes
2) ESTABLISH LEGAL FRAMEWORK FOR REVENUES IN CALIFORNIA » California Constitution
» Voter Approval
3) REVIEW CALIFORNIA CITY REVENUES
» Basic characteristics and requirements
» Observations specific to San Leandro and its tax base 4) HIGHLIGHT FINANCING TOOLS TO LEVERAGE REVENUES
Background:
San Leandro Revenues
San Leandro General Purpose
Revenue Sources
4 SALES
TAXES
OTHER 42%
REVENUES
21%
UTILITY
USER
TAX
9%
Source: City of San Leandro Annual Comprehensive Financial Report for the year ending June 30,2022.
Sales Tax $54,686
Property Tax 27,773
Property Transfer Tax 14,957
Utility User Tax 11,612
Franchise Fee 5,951
911 Communication 3,388
Cannabis Tax 1,020
TOT 685
Other1 109
TOTAL $120,181
SAN LEANDRO GENERAL REVENUES
FY 2021-22 ($000)
1. Includes various taxes, assessments, charges, and
other income.
SALES TAX
45%
PROPERTY TAX
23%
PROPERTY
TRANSFER TAX
12%
UTILITY USER
TAX
10%
FRANCHISE FEE
5%
911 COMM
3%
CANNABIS TAX
1% TOT
1%
San Leandro Voter Approval Successes
5 MEASURE Z (NOVEMBER 2010):
¼ cent sales tax, 7-year sunset
MEASURE HH (NOVEMBER 2014):
Extended Measure Z at ½ cent rate, 30-year sunset
Maintained existing service levels
MEASURES OO, PP, NN (NOVEMBER 2016):
Small business license tax reduction, parking lot (10% of gross receipts) & warehouse tax ($100/$1,000 square feet) Modified T.O.T. (hotel tax) from 10% to 14%
Cannabis business tax (currently 5% of gross receipts) MEASURE VV (NOVEMBER 2020):
Increased real property transfer tax from $6/$1,000 to $11/$1,000
SAN LEANDRO
VOTERS AUTHORIZED
6 TAX MEASURES
SINCE 2010…
Legal Framework for
New Taxes and Fees
What Is a Tax?
7 A TAX NEED NOT BE
LEVIED IN
PROPORTION TO
SPECIFIC BENEFIT TO
A PERSON OR
PROPERTY
A TAX is a charge imposed to fund public services and facilities
According to the California Constitution, every local agency charge is a “tax,” unless it falls into a list of specified exceptions:
» User fees for specific benefit or service
» Regulatory fees for cost of issuing licenses/permits
» Rental fees for entrance or use of property
» Fines and penalties such as parking and enforcement
» Charge imposed as a condition of property
development
Cities may impose any tax not otherwise prohibited by state law » Cigarettes, alcohol and personal income are prohibited from local taxation (all used for the State’s own purposes)
Types of Taxes
8 GENERAL TAXES
(CITIES AND COUNTIES)
SPECIAL TAXES
(CITIES, COUNTIES, SPECIAL DISTRICTS)
Use of Revenues Unrestricted Specific Purpose
Types of Tax
Sales Tax
Business Tax
Transient Occupancy Tax
Utility Users Tax
Sales Tax
Parcel Tax
Voter Approval1 Majority Two-thirds
California Constitution distinguishes between a general tax and a special tax » GENERAL TAX revenues may be used for any purpose; although ballot measure can suggest the purposes for which it would likely be used, but cannot commit to specific application
» SPECIAL TAX revenues must be used for a specific purpose
1. Required for the implementation of a new tax and an increase or extension to an existing tax.
What is a Fee?
9 A FEE MAY NOT
EXCEED THE
ESTIMATED
REASONABLE COST
OF PROVIDING THE
SERVICE OR
PRODUCT FOR
WHICH THE FEE IS
CHARGED, PLUS
OVERHEAD
A fee is a charge imposed on an individual for
a service that the person chooses to receive
Cities have the general authority to impose
fees, charges, and rates granted by the
California Constitution (Article XI, Sections 7
and 9)
State law sets specific procedures for fee and
rate adoption
» Proposition 218 provides special rules
for property- related fees used to fund
property-related services
Limitations for Raising Local Revenues
in California
10 PRIMARY LIMITATIONS ON RAISING LOCAL
REVENUES:
Property taxes may not be increased except with a twothirds vote to pay debt service on general obligation bonds
The allocation of local property tax among a county and cities, special districts and school districts within each county is controlled by the Legislature and based on preProposition 13 historic allocation Voter approval is required prior to enacting, increasing or extending any type of local tax
Assessments to pay for public facilities limited to strict benefit analysis and require property owner approval
Fees for services such as water, sewer and trash
collection are subject to property owner majority protest OPTIONS AVAILABLE
TO LOCAL OFFICIALS
FOR RAISING
REVENUES TO
PROVIDE NECESSARY
SERVICES ARE LIMITED
BY CALIFORNIA
CONSTITUTION’S
REQUIREMENTS FOR
VOTER APPROVAL
California City Revenues
City Revenue Categories
12 Municipal revenues can generally be separated into two broad categories:
GENERAL PURPOSE REVENUES:
Can be used for any legitimate public purpose
General purpose taxes, including property taxes and sales taxes, account for most general city revenues statewide SPECIAL REVENUES:
Restricted by law to a particular use
Include funds derived from fees or rates that the local agency charges for public services, including municipal utilities such as water, sewer, and garbage collection, airports, marinas, harbors and water ports
Also includes most state or federal grants as they are usually restricted for specific programs
WHEN A CITY
CONSIDERS REVENUE
RAISING STRATEGIES
TO MEET
COMMUNITY AND
BUDGETARY NEEDS,
GENERAL PURPOSE
REVENUES TEND TO
BE THE PRIMARY
TARGET FOR
ENHANCING OR
EXPANDING ITS
REVENUE
FRAMEWORK
California City Revenue Sources
13 Source: A Primer on California City Revenues, Part One: Revenue Basics; November 16; www.californiacityfinance.com.
TOT 2%
THE MIX OF SERVICE
RESPONSIBILITIES
AND LOCAL
CHOICE
REGARDING
SERVICE LEVELS
AFFECTS THE
AMOUNT AND
COMPOSITION OF
REVENUES FROM
CITY TO CITY
Revenue Raising Strategies
14 ENHANCE EXISTING REVENUE SOURCES:
Property Taxes: Voter approved ad valorem tax (for capital only) Sales Taxes: Incremental general tax or special tax
Other Taxes and Fees: Utility User Tax, Transient Occupancy Tax, Cannabis Tax, or Franchise Fees through increases to existing rate
Most recently, in November 2020, voters approved an increase to San Leandro’s Property Transfer Tax Rate to $11 per $1,000 from $6 per $1,000 ESTABLISH NEW REVENUE SOURCES:
Other Taxes
» Parcel Tax, Business License Tax (above current regulatory rate) » “Innovative Taxes”…Vacant Property, Property Transfer Wealth Tax, Card Clubs Other Fees & Charges
» Benefit Assessment, User Fees
Property Taxes
>>Enhance Existing Revenue Sources
15 PROPERTY TAX: imposed on “real property” (land and buildings) and tangible personal property (movable property such as boats, aircraft and business equipment)
The property tax rate is applied to the assessed valuation (AV) of the property » The property tax rate levied for general purposes is 1% of AV plus voterapproved incremental rates to fund indebtedness (general obligation bonds) AV of real property is the “full cash value” of the property in 1975-76 or at change of ownership, whichever is more recent
» Adjusted annually by CPI, not to exceed an annual increase of 2% » AV becomes the new purchase price upon change in ownership Property tax allocations among local agencies vary due to differences in the service responsibilities among agencies serving different areas and differences in the tax rates enacted by those agencies prior to Proposition 13 in 1978
SAN LEANDRO ASSESSED VALUATION
San Leandro Property Tax Base and Rates
16 SAN LEANDRO PROPERTY TAX RATE
(PER $1,000 OF AV)
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Billions
FISCAL
YEAR
TOTAL AV
($000s)
%
CHANGE
2014 $ 10,560,253 -
2015 $ 10,524,399 -0.34%
2016 $ 11,295,832 7.33%
2017 $ 11,795,464 4.42%
2018 $ 12,516,114 6.11%
2019 $ 13,315,575 6.39%
2020 $ 14,205,470 6.68%
2021 $ 14,848,485 4.53%
2022 $ 15,407,010 3.76%
2023 $ 16,409,373 6.51%
SAN LEANDRO
HISTORICAL AV San Leandro’s 10-year
compound average
growth in AV is 5.09%
Revenue grows as a
result of a growing tax
base
BASIC CITY AND COUNTY
City of San Leandro 0.157525
County of Alameda 0.150052
School Districts 0.634383
Special Districts 0.058041
Total Basic Levy 1.000000
OVERRIDE ASSESSMENTS
County GO 0.003600
K-14 GO 0.198400
Transportation and Parks GO 0.015300
Total Override Rate 0.217300
TOTAL TAX RATE 1.217300
Ad Valorem Property Taxes for GO Bonds
17 REQUIREMENTS
Date of Election Any Tuesday (except within 45 days of a State-wide election unless at the same time)
Eligible Issuers Any local governmental entity with statutory authority and the power to tax real property
Eligible Purposes Acquisition and improvement of real property Governing Board Approval Two-thirds vote for cities
Voter Approval Two-thirds
AD VALOREM PROPERTY TAX Only mechanism for increasing tax rate is with two-thirds voter approval and only to acquire or improve real property through the issuance of General Obligation Bonds
» Article XVI, Section 18 (Second California Constitution, 1879): two-thirds favorable vote required for bonds of cities, counties, and school districts » Article XIIIA, Section 1(b) (Proposition 46, 1986): exception from 1% real property tax limit for taxes to pay voter-approved general obligation bonds Property tax revenue is levied and used to pay debt service on the GO Bonds Sales & Use Taxes
>> Enhance Existing Revenue Sources
18 SALES & USE TAXES: A sales tax is imposed on the total retail price of any tangible personal property; a use tax is imposed on the purchaser for transactions for which the sales tax is not collected
Comprised of a state sales tax, the 1% Bradley-Burns sales tax for cities, and several other components
Cities may impose additional sales and use taxes in increments of 0.125% with certain approvals:
» Two-thirds City Council approval
» Majority voter approval for a general tax
» Two-thirds voter approval for a special tax
The combined rate of the city and county transaction and use taxes is capped at 2% in most counties (Alameda County is 3.5%)
Source: A Primer on California City Revenues, Part One: Revenue Basics; November 16; www.californiacityfinance.com.
San Leandro Sales & Use Taxes
19 STATE BASE SALES AND USE TAX RATE = 7.25%
LOCAL AD-ON SALES AND USE TAXES IN SAN LEANDRO = 3.50%
Of the State’s base sales
tax rate of 7.25%, 1% is
allocated for cities and the
remaining 6.25% is
directed toward State and
countywide uses
San Leandro and other
cities within Alameda
County have the highest
sales tax rate in the State
at 10.75%
Increases to the City’s
sales tax rate would
require State legislation
TAX AREA DISTRICT NAME RATE
EFFECTIVE
DATE
Children’s Health and Child Care 0.50% 7/1/2021
Essential Health Care Services 0.50% 7/1/2004
Alameda County 0.50% 7/1/2021
Alameda County Transportation Commission 0.50% 4/1/2015 Alameda County Transportation Commission 0.50% 4/1/2022 Bay Area Rapid Transit District 0.50% 4/1/1970
SAN LEANDRO City of San Leandro 0.50% 4/1/2015
TOTAL LOCAL ADD-ON SALES TAX 3.50%
TOTAL STATE + LOCAL ADD-ON SALES TAX 10.75%
ALAMEDA
COUNTY
Other Taxes
>> Enhance Existing Revenue Sources
20 UTILITY USER TAX (UUT)
Imposed by a city on the consumption of utility services, including (but not limited to) electricity, gas, water, sewer, telephone (including cell phone and long distance), sanitation, and cable television
PROPERTY TRANSFER TAX
Imposed by a city or county when the ownership of a property changes hands
CANNABIS ADD-ON TAX
The state imposes an excise tax of 15% and a state retail tax of 7.25% on gross receipts
Municipalities can add on as much as 15% more in local cannabis business taxes
TRANSIENT OCCUPANCY TAX (TOT)
Imposed by most cities on persons staying thirty days or less in hotels, motels and similar lodgings, including mobile homes
San Leandro Other Tax Revenues &
Tax Rates
21 Source: CaliforniaCityFinance.com from League of Calif Cities and UUTINFO.ORG Survey Data. Maximum California City tax rates based on various points in time; TOT as of November 2020; UUT as of February 2021; Property Transfer Tax as of March 2022. San Leandro could consider increasing the rate structure for existing tax revenues
» The Property Transfer Tax rate was recently increased in November 2020 » TOT is near the maximum rate charged by cities and does not generate meaningful revenues for the City
» Increases to UUT would likely provide the biggest impact to City revenues, but not typically popular among voters
FY 2022
REVENUES
($000)
SAN
LEANDRO
TAX RATE
CA CITY
MAX
TAX RATE
PROPERTY TRANSFER TAX $14,957 $11/$1,000 $13/$1,000
UTILITY USER TAX $11,612
Phone, Electricity, Gas 6.0% 11.0%
Telecom, Cable 5.7% 11.0%
Prepaid Wireless 5.5% 11.0%
CANNABIS ADD-ON TAX $1,020
Dispensaries 5.0% 15.0%
Manufacturers 3.0% N/A
Lab Testing 2.0% N/A
TRANSIENT OCCUPANCY TAX $685 15.0% 15.5%
TOTAL OTHER TAX REVS: $28,274
Parcel Taxes
>>Establish New Revenue Sources
22 PARCEL TAX: tax on property levied on a basis other than value
» Must be a special tax requiring two-thirds voter
approval
Most useful for operations and services where GO Bonds, which are limited to capital, are not an available option Local parcel taxes can be structured in a variety of ways
1. Flat tax for all parcels
2. Taxes based on square footage of improvements
» Tax for vacant property
3. More complicated tax structures may have legal hurdles
SAN LEANDRO PARCEL
COUNT
RESIDENTIAL: 22,730
COMMERCIAL: 2,277
TOTAL: 25,007
Other Taxes and Assessments
>>Establish New Revenue Sources
23 BUSINESS LICENSE TAX (BLT)
The City currently imposes a Business License for regulatory purposes but could charge at a higher rate to raise revenues for general municipal purposes (i.e. a “tax”)
VACANT PROPERTY TAX
Oakland is first city in California to adopt such a tax (Measure W) Applies to properties in use <50 days/year; $6,000 per parcel; $3,000 for condominiums, townhouses & duplexes
SPECIAL BENEFIT ASSESSMENTS
Charges levied to pay for public improvements or services within a predetermined district or area, according to the benefit the parcel receives from the improvement or services
The state Constitution requires strict demonstration of benefit and propertyowner approval to impose a benefit assessment 24 Summary
Raising significant new revenues would require voter approval » All practical options require taxes
» Non-tax measures such as assessments have legal and practical barriers Taxes for restricted uses (special taxes) require two-thirds voter approval » A general tax, most likely a local sales tax measure, can be passed with 50% approval
» Recent court rulings have suggested that a “special tax” initiative by citizen petition can be approved with 50% approval (may still be subject to challenge)
Primary two-third voter approval options
» General obligation bonds, for which ad valorem property tax is raised to finance improvements and service the debt
» Parcel tax on property on a basis other than ad valorem » “Special” supplemental local sales tax
Leveraging Revenue Sources
26 California Constitution
What is “Debt” and What is Not
CALIFORNIA CONSTITUTION
DEBT LIMIT
Article 16, Section 18
(2/3 vote generally required)
EXCEPTIONS TO THE
DEBT LIMIT
EXCEPTION 1
Current Fiscal Year
(eg. TRANs)
EXCEPTION 2
Contingent Obligations
(eg. COPs, LRBs)
EXCEPTION 3
Special Fund
Obligations
(eg. Revenue Bonds)
EXCEPTION 4
Obligations Imposed by
Law
(eg. POBs)
GENERAL OBLIGATION BONDS
True Indebtedness
Most likely financing approach for San Leandro
27 Types of Revenues and
Financing Mechanisms
REPAYMENT SOURCE TYPE OF FINANCING VOTERAPPROVED?
PAID FROM
GENERAL FUND
Lease Revenue Bonds/Certificates of
Participation (COPs)
Pension Obligation Bonds
Tax and Revenue Anticipation Notes
(TRANS)
No
PAID FROM
ENTERPRISE REVENUES
(WATER, WASTEWATER,
ETC.)
Enterprise Revenue Bonds
Installment Purchase COPs
No
PAID FROM SPECIAL
TAXES
General Obligation Bonds (GO Bonds)
Limited Tax Bonds (Sales Tax Revenue
Bonds)
Special Tax or Assessment Bonds
Yes
28 Illustrative Debt Sizing Analysis
>> Lease Revenue Bonds – No Voter Approval
The City receives Measure BB sales tax revenues (through ACTC) to support local paratransit, streets and roads, and bike/ped programs A bond program supported by Measure BB revenues can be implemented in two ways:
i. GENERAL FUND BONDS: Bonds secured by the City General Fund utilizing the City’s annual Measure BB direct allocation to pay debt service ii. REVENUE BONDS: Bonds secured solely by the Measure BB annual direct allocation
1. Estimated term of the Bonds assumes issuance in 2023 and a final term of 2045, consistent with the Measure BB sales tax term.
2. Based on FY 2021-22 revenues reported in the Measure BB Special Revenue Fund.
MEASURE BB DEBT SIZING AND CAPACITY ANALYSIS
BOND ASSUMPTIONS
Bond Term1 22 22 22
Interest Rate 5% 5% 5%
Cost of Issuance and Reserves 1% 1% 1%
CAPACITY ANALYSIS
Leverage Constraint 1.2x 1.5x 2.0x
Measure BB Revenues2 $5,900,000 $5,900,000 $5,900,000
Maximum Debt Service $4,916,667 $3,933,333 $2,950,000
Measure BB PAYGO $983,333 $1,966,667 $2,950,000
Bonding Capacity $64,718,096 $51,774,477 $38,830,858
Net Proceeds to City $64,070,915 $51,256,732 $38,442,549 29 Illustrative Debt Sizing Analysis
>> General Obligation Bonds – Voter Approval
The City could seek voter approval to acquire or improve real property through the issuance of GO Bonds
GO Bond authorization would be based on project needs and tax-payer affordability
Incremental property tax revenues would be levied and used to pay principal and interest on the GO Bonds
GO BOND DEBT SIZING AND CAPACITY ANALYSIS
BOND ASSUMPTIONS
Bond Term1 20 25 30
Interest Rate 5% 5% 5%
Cost of Issuance and Reserves 0.5% 0.5% 0.5%
CAPACITY ANALYSIS
Assumed Annual Debt Service2 $5,616,981 $5,676,197 $5,854,629 Bonding Capacity $70,000,000 $80,000,000 $90,000,000
Net Proceeds to City $69,650,000 $79,600,000 $89,550,000
PROPERTY TAX LEVY
FY 2022-23 Asssed Valuation
($000) $16,409,373 $16,409,373 $16,409,373
Tax Rate Per $100,000 AV $34.23 $34.59 $35.68
1. Bond terms assumed typical of GO authorizations.
2. Based on illustrative assumed property tax revenues and debt service consistent with lease example on prior slide. 30 Types of Revenues and
Financing Mechanisms
MAJOR REVENUE OPTIONS AND FINANCING MECHANISMS
TYPE OF TAX BASIS FOR LEVY VOTER APPROVAL
REQUIREMENT
FINANCING
MECHANISM
GENERAL FUND
SUPPORTED?
TAX ON PROPERTY
Ad Valorem
Property Tax
City-wide. A levy on property based
on the properties’ assessed value
and used for voter approved debt.
Two-thirds General Obligation Bonds No
Parcel Tax
City-wide or local. A levy on parcels
of property, typically set at some
fixed amount per parcel. Cannot be
based on a property’s value.
Two-thirds Special Tax Bonds No
GENERAL TAXES
Sales Tax
(General)
City-wide. A levy on the retail sale of
tangible goods. Majority Pay-go or lease obligation Yes Business Tax City-wide. A levy on operators of
businesses. Majority Pay-go or lease obligation Yes
Hotel Tax
City-wide; primarily to visitors. A levy
on the occupancy of hotels, motels,
or other short-term lodging.
Majority Pay-go or lease obligation Yes
Utility Tax
City-wide. A levy on the use of
utilities, such as electricity, gas, or
telecommunications.
Majority Pay-go or lease obligation Yes
SPECIAL TAXES
Sales Tax
(Special)
City-wide. A levy on the retail sale of
tangible goods. Two-thirds Sales Tax Revenue Bonds No
Benefit
Assessment
Local. A levy on property within a
benefit assessment district. Based
on calculation of the special benefit.
50% of
property owners Assessment Bonds No
Appendix I:
Revenue Measures in Practice
32 California City Finance, a website maintained by Michael Coleman, tracks results of local revenue measures in California since 2001 (last updated in 2019 for the period of 2002 through November 2018)
California Revenue Measure
Election Results
BOND AND REVENUE MEASURES: 2002 THROUGH NOVEMBER 2018
CITIES, COUNTIES AND SPECIAL DISTRICTS
TYPE OF MEASURE TOTAL MEASURES PASS PASSING %
GO Bonds 135 73 54.1%
Parcel Tax 670 322 48.1%
General Sales Tax 389 296 76.1%
Special Sales Tax 128 61 47.7%
Business Tax 284 237 83.5%
Transient Occupancy Tax 277 186 67.1%
Utility Users Tax 102 35 34.3%
Property Transfer Tax 23 12 52.2%
Source: CaliforniaCityFinance.com “An Overview of Local Revenue Measures Since 2001.” Through November 2018; updated publication dated October 30, 2019.
33 The California City Finance survey of local revenue measures in California provides some noteworthy observations:
» A proposal to increase a general purpose tax is more likely to succeed than a special tax – the additional hurdle of the two-thirds vote exceeds the appeal of dedicating a tax to a specific purpose
» Generally speaking, special taxes for broad based public safety services (law enforcement, fire, emergency medical) are more likely to garner twothirds voter approval than other purposes » For cities and counties, add-on sales (transactions & use), transient occupancy (hotel), and business license tax increase measures all succeed more often than proposals to increase utility user taxes » Most extensions and revisions of existing taxes that do not increase the rate are successful
California Revenue Measure
Election Results
Source: CaliforniaCityFinance.com “An Overview of Local Revenue Measures Since 2001.” Through November 2018; updated publication dated October 30, 2019.
34 Case Study: City of Oakland
TAX MEASURE TAX TYPE
2021-22
BUDGETED REVENUES
($MILLIONS)
EXPIRATION
Public Safety and Services Violence Prevention
(Measure Z) Parcel tax and 8.5% parking tax $26.40 2024 Transient Occupancy Tax for Tourism and Cultural
Facilities (Measure C) 3% special transient occupancy tax $4.60 None Library Services Retention and Enhancement
(Measure Q ) Parcel Tax $18.00 2024
Library Services (Measure D) Parcel Tax $13.40 2038
Parks & Recreation Preservation, Litter Reduction,
and Homelessness Support (Measure Q ) Parcel Tax $27.50 2040 Paramedic Services on Fire Trucks (Measure N) Parcel Tax $1.90 None Vacant Property, Homelessness, and Illegal
Dumping (Measure W) Parcel Tax $7.00 2040
Emergency Medical Services (Measure M) Parcel Tax $2.40 None Landscaping & Lighting Assessment District Parcel Tax $19.20 None
VOTER-APPROVED SPECIAL TAX REVENUES TO ENHANCE SERVICES Source: City of Oakland General Obligation Bonds, Series 2022C-1 and Series 2022C-2 Official Statement; Table 13 page A-2-24.
Appendix II:
Legal Framework
Key Constitutional Amendments
Restricting Local Revenues
36 A series of amendments to the California Constitution have impacted the ability of local governments to generate revenues to fund services or pay debt service:
PROPOSITION 13 (1978)
» Limited basic ad valorem tax to 1% of assessed valuation, limited growth in assessed valuation to 2% growth or value at sale, gave the State Legislature responsibility for allocating property taxes, and imposed requirement for twothird voter approval of special taxes PROPOSITION 218 (1996):
» Addressed perceived loopholes with Prop 13, requiring simple majority voter approval for general taxes, new requirements and procedures for “property related fees” such as for sewer service, and limited the use of assessment financing
PROPOSITION 26 (2010)
» In order to restrict the ability to mitigate externalized societal and environmental costs, expanded the types of revenues classified as “taxes,” thereby requiring voter approval