CITY OF SEBASTOPOL
CITY COUNCIL
AGENDA ITEM
Meeting Date: March 7, 2023
To: Honorable Mayor and City Councilmembers
From: Agenda Review Committee
Subject: Opposition Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act. LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT.
Recommendation: It is recommended that the Council adopt a Resolution opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act.
Funding: Currently Budgeted: ______ Yes _________ No __XX___ N/A Net General Fund Cost: None
Account Code/Costs authorized in City Approved Budget (if applicable) AK (verified by Administrative Services Department)
*See Potential Financial Impact if Measure is Adopted at 2025 Election INTRODUCTION:
This item is to request that the City Council Approve and Adopt the Resolution opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act.
BACKGROUND
The League of California Cities (CalCities) monitors policies coming from Sacramento and Washington on behalf of local municipalities. CalCities frequently publishes alerts when policy, legal decisions, or initiatives will positively or negatively impact local government.
On February 1, 2023, California Secretary of State Shirly Weber issued a memo to all county clerks/registrars of voters announcing that proponents of Initiative 21-0042A1, or Initiative 1935 as now numbered by the Secretary of State, had filed the necessary number of valid signatures to make it eligible for the November 5, 2024 General Election ballot. Proponents now have until June 27, 2024 to consider withdrawing the initiative before the Secretary of State officially certifies it for the ballot.
This anti-local control measure will decimate vital local and state services to the benefit of wealthy corporations.
The measure is sponsored by the California Business Roundtable (CBRT) — the lobbying arm of the largest and wealthiest corporations in California.
The title and summary will read as follows on the November 2024 ballot:
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT.
Cal Cities, along with a broad coalition of local governments, labor, public safety, education, and infrastructure advocates, strongly oppose this initiative.
Agenda Item Number: 5 Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
This measure:
• For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. New Language states any change in state statute Jaw 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 to the electorate and approved by a majority 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. • Limits voters’ ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds.
In the November 2022 election, the Council submitted to the voters Measure N which required a majority vote (at least 50% +1) of the votes needed to pass a measure. o The measure was approved by a simple majority of “yes” votes. o Votes in Favor: 3244 83.41%
o Votes Opposed: 645 16.59%
o Total Votes Cast: 3889
• Eliminates voters’ ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax.
• Expands definition of “taxes” to include certain regulatory fees, broadening application of tax approval requirements.
• Requires Legislature or local governing body to set certain other fees. • Requires summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments
• Results in lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.
DISCUSSION:
The League of California Cities, along with a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly opposes this initiative.
The Alliance for a Better California, League of California Cities, California State Association of Counties, California Special Districts Association, California Alliance for Jobs, and the Contract Cities Association joined together to announce strong opposition to the deceptive ballot measure sponsored by the California Business Roundtable (CBRT), the lobbying arm of the largest and wealthiest corporations in California.
The coalition of public safety, education, labor, local government, and infrastructure groups are vocalizing their opposition as the California Secretary of State’s office announced that the initiative has qualified for the November 2024 ballot.
Local government revenue-raising authority is currently substantially restricted by state statute and constitutional provisions, including the voter approved provisions of Proposition 13 of 1978, Proposition 218 of 1996, and Proposition 26 of 2010. The Taxpayer Protection and Government Accountability Act adds and expands restrictions on voters and local government tax and fee authority.
This is the third attempt by deep-pocketed special interest groups to advance an initiative that undermines the rights of local voters to decide what their communities need and jeopardizes the ability of local governments to deliver essential services,” said League of California Cities Executive Director and CEO Carolyn Coleman. “It was a bad idea in 2018, it was a bad idea again in 2022. And it will still be a bad idea in 2024.”
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
If passed, the initiative limits voters’ authority, adopts new and stricter rules for raising taxes and fees, and may make it more difficult to hold violators of state and local laws accountable.
Effective date: All new or increased taxes or fees adopted by the Legislature, a city council, or the local voters after Jan. 1, 2022, must comply with the Act’s new rules. THIS MEASURE IS RETROACTIVE.
State taxes: All new or increased state taxes will require majority voter approval. For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. New Language states any change in state statute Jaw 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 to the electorate and approved by a majority 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.
Local taxes:
New requirements for voter approval:
• when an existing tax is applied to a newly annexed territory. • when an existing tax is applied to a new service or product, for example when a utility user tax is applied to a new service.
• All new or increased taxes adopted after Jan. 1, 2022, must include a sunset date. This would require additional tax measure to extend previously approved taxes. Requires that a tax measure adopted after January 1, 2022 and before the effective date of the initiative that was not adopted in accordance with the measure be readopted in compliance with the measure or will be void twelve months after the effective date of the initiative. If past election patterns and elections in 2022 are an indication, over 200 tax measures approving more than $2 billion annual revenues to support local public services would not be in compliance and would be subject to reenactment. Most will be taxes without a specific end date and special taxes (including parcel taxes). Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, the measures would each require declaration of emergency and unanimous vote of the governing board to be placed on a special election ballot within a year for approval or the tax will be void after that date.
Fees and charges:
• Requires that charges for access, use and rental of government property be “reasonable”. • Fees and charges for services and permits 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.” Examples include planning services, excavation and encroachment permits, preparation of candidate statement, and permit parking.
• State and cities have burden of proving by “clear and convincing evidence” that a fee/charge is not a tax, that the amount is reasonable, and that it does not exceed the “actual cost.” • No fee or charge or exaction regulating vehicle miles traveled can be imposed on new development.
Fines and penalties [administrative enforcement of state law and municipal codes]:
May require voter approval of fines and penalties 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. Examples include nuisance abatement, organic waste reduction requirements, and failure to maintain a vacant property.
Voters
• Local advisory measures are prohibited. No measure may appear on the ballot asking for approval of a general tax that would express the voters' preference for how the tax revenue should be used.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
• Overturns Upland decision so taxes proposed by initiative are subject to the same rules as taxes placed on the ballot by a city council.
• Voters may not amend a city charter to impose, extend, or increase a tax or fee.
Fiscal:
• Puts approximately $2 billion from fees and charges at risk each year, subject to legal peril. • Puts approximately $2 billion of annual tax revenue at risk. Many tax measures approved between 2022- 2024 will need to be resubmitted to voters to comply and be reapproved.
Analysis
• Jeopardizes vital local and state services
• This far-reaching measure puts at risk billions of dollars currently dedicated to critical state and local services.
• It 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.
Undermines voter rights, transparency, and accountability • This misleading measure changes our Constitution to make it more difficult for local voters to pass measures needed to fund local services and projects.
• It also includes a provision that would retroactively cancel measures that were passed by local voters — effectively undermining the rights of voters to decide for themselves what their communities need. • It would limit voter input by prohibiting local advisory measures, where voters provide direction to politicians on how they want their local tax dollars spent.
Opens the door for lawsuits, bureaucracy, and red tape that will cost taxpayers and hurt our communities • The measure would encourage lawsuits, bureaucracy, and red tape that would cost local taxpayers millions — while significantly delaying and stopping investments in vital services.
Gives wealthy corporations a major loophole to avoid paying their fair share — forcing local residents and taxpayers to pay more
• The measure would create 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 — shifting the burden and making individual taxpayers pay more.
Allows corporations to dodge enforcement when they violate environmental, health, public safety, and other laws • The deceptive scheme may create new loopholes that 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.
As stated above, the “Business Roundtable” ballot measure has qualified for the Nov. 2024 ballot. If passed it would invalidate our UUT measure completely, which represents $700,000/year in tax revenue.
The initiative would 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. It would also reduce funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities. During a time when our children are still recovering from the impacts of the pandemic, our state is experiencing a deluge of extreme weather disasters, and homeless residents are perishing on our streets, our communities cannot afford for these vital services to be eliminated.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
The initiative would steal power away from voters, prohibiting local advisory measures where voters provide direction to politicians on how they want their local tax dollars spent. The measure would make it harder for voters to pass measures needed to fund local services and local infrastructure. It would also retroactively cancel measures already passed by voters, stripping voters of a say in local decisions.
The initiative includes provisions that would retroactively void all state and local taxes or fees adopted after January 1, 2022 if they did not align with the provisions of this initiative. This may also affect indexed fees that adjust over time for inflation or other factors. Effectively, it would allow voters throughout California to invalidate the prior actions of local voters, undermining local control and voter-approved decisions about investments needed in their communities. Over a hundred local measures were approved in 2022 that likely do not comply with the provisions of Initiative 21-0042A1. Nearly $2 billion of annual revenues from these voter approved measures will cease a year after the effective date of the measure, reducing the local public services funded by these measures.
Measure “N” removed our prior UUT “sunset” provision. Without a sunset provision, if the proposed ballot measure passes it would totally invalidate our UUT tax. At this point then we have basically two options: return to the voters and reinstate a sunset provision of some sort or hope the ballot measure fails. As stated above the Proponents now have until June 27, 2024 to consider withdrawing the initiative before the Secretary of State officially certifies it for the ballot.
The loss of $700,000 plus annually to the City of Sebastopol would be devastating. It is highly recommended that the City Council support opposition of this Ballot Measure. It is also recommended that the Budget Committee, Council and community keep this in mind as the upcoming budget is being prepared in case the Ballot Measure is successful.
It is also recommended that the Council consider additional measures as listed below:
1. Do nothing; however if successful, this would invalidate the City’s UUT; or
2. Consideration of Ballot Measure for the 2024 Municipal Election for the UUT with a determined sunset date with costs for a ballot measure to be averaged around $15,000; or
3. Consideration of special election in 2025. If successful the Council will be requested to create a Ballot Measure for the UUT with a sunset date after the November 2024 Election. This would require Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, the measures would each require declaration of emergency and unanimous vote of the governing board to be placed on a special election ballot within a year for approval or the tax will be void after that date.
As of right now, the cost to create new ballot measure with a sunset date and costs for a special election of this measure succeeds as range from $30,000 to $50,000.
CITY COUNCIL AND/OR GENERAL PLAN GOALS:
Goal 5: Provide Open and Responsive Municipal Government Leadership
5.3.3. Encourage and increase public awareness of City Policies, decisions, programs and all public processes and meetings, by investigating effective methods of communication and obtaining feedback from the community.
Goal 6: Maintain a highly qualified Staff that works to provide services to serve and protect the residents, visitors and business of this community.
Action CHW 5c: Practice an open-door policy in City programs, and actively engage and encourage participation from all individuals regardless of ethnicity, race, religion, class, disability, sexual orientation, and gender.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
PUBLIC COMMENT:
As of the writing of this staff report, the City has not received any public comment. However, if staff receives public comment from interested parties following the publication and distribution of this staff report such comments will be provided to the City Council as supplemental materials before or at the meeting. In addition, public comments may be offered during the public comment portion of the consent calendar.
PUBLIC NOTICE:
This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date.
FISCAL IMPACT:
Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local government fee and charge revenue placed at risk is about $2 billion per year including those adopted since January 1, 2022.
Major examples of affected fees and charges are:
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund
3. community safety, code enforcement, and neighborhood cleanup programs.
4. Emergency response fees - such as in connection with DUI.
5. Advanced Life Support (ALS) transport charges.
6. Business improvement district charges.
7. Fees for processing of land use and development applications such as plan check fees, use permits,
8. design review, environmental assessment, plan amendment, subdivision map changes.
9. Document processing and duplication fees.
10. Facility use charges, parking fees, tolls.
11. Fines, penalties.
12. Fees for parks and recreation services.
The impact just to name a few revenues if Initiative No. 21-0042A1 passes will invalidate the following:
1. Utility User Tax (UUT) $700,000
2. Building Permits Fee $200,000
3. Planning Fees $25,000
4. Fire Service Fee $30,000
5. Encroachment Permits Fee $30,000
Total financial impact $985,000 from fees and charges at risk each year.
In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure financing more difficult and will deter new residential and commercial development.
RECOMMENDATION:
That the City Council Approve and Adopt the Resolution opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act.
ATTACHMENTS:
Resolution
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Letter
League Fiscal Analysis
Ballot Measure
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Resolution Number XXXX-2023
A Resolution of the City Council of the City of Sebastopol Opposing Initiative 21-0042A1 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 THEREFORE, BE IT RESOLVED that the City of Sebastopol City Council opposes Initiative 21-0042A1; BE IT FURTHER RESOLVED, that the City of Sebastopol City Council will join the No on Initiative 21-0042A1 coalition, a growing coalition of public safety, education, labor, local government, and infrastructure groups throughout the state.
We direct staff to email a copy of this adopted resolution to the League of California Cities at [email protected].
PASSED AND ADOPTED, by the CITY COUNCIL of THE CITY OF SEBASTOPOL, COUNTY OF SONOMA, of STATE OF CALIFORNIA on this 7th day of March 2023.
I, the undersigned, hereby certify that the foregoing Resolution was duly adopted by the City of Sebastopol City Council by the following vote:
VOTE:
Ayes:
Noes:
Absent:
Abstain:
APPROVE: Mayor Neysa Hinton
ATTEST: Mary Gourley, Assistant City Manager/City Clerk, MMC APPROVED AS TO FORM: Larry McLaughlin, City Attorney
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
City Council
Mayor Neysa Hinton
Vice Mayor Diana Rich
Sandra Maurer
Jill McLewis
Stephen Zollman
City Manager
Larry McLaughlin
[email protected]
Assistant City Manager/City Clerk, MMC
Mary Gourley
[email protected]
March 8, 2023
Bismarck Obando
Director of Public Affairs, League of California Cities 1400 K Street, Suite 400
Sacramento, CA 95814
RE: Letter Opposing Initiative 21-0042A1
On March 7, 2023, the City Council of the City of Sebastopol voted to oppose Initiative 21-0042A1, a deceptive, developer-sponsored proposition aimed for the November 2024 statewide ballot that would significantly jeopardize cities’ ability to provide essential services and infrastructure for our residents.
The measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and projects and would limit voter input by prohibiting local advisory measures where voters can express a preference on how they want their local tax dollars spent.
This 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 impacts on local infrastructure and our environment.
This measure also 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.
Unless defeated, 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.
Major examples of affected fees and charges from this initiate are listed below.
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund
3. community safety, code enforcement, and neighborhood cleanup programs.
4. Emergency response fees - such as in connection with DUI.
5. Advanced Life Support (ALS) transport charges.
6. Business improvement district charges.
7. Fees for processing of land use and development applications such as plan check fees, use permits,
8. design review, environmental assessment, plan amendment, subdivision map changes.
9. Document processing and duplication fees.
10. Facility use charges, parking fees, tolls.
11. Fines, penalties.
12. Fees for parks and recreation services.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
The impact just to name a few revenues if Initiative No. 21-0042A1 passes will invalidate the following:
1. Utility User Tax (UUT) $700,000
2. Building Permits Fee $200,000
3. Planning Fees $25,000
4. Fire Service Fee $30,000
5. Encroachment Permits Fee $30,000
Total financial impact $985,000 from fees and charges at risk each year.
The measure benefits wealthy corporations and real estate developers while decimating our local communities and neighborhoods.
You may list the City of Sebastopol in formal opposition to Initiative #21-0042A1 and include our city as part of the growing coalition of public safety, labor, local government, infrastructure advocates, and other organizations throughout the state opposed to this deceptive proposition.
For any questions, please contact City Manager Larry McLaughlin at 707 823 1153.
Sincerely,
Neysa Hinton
Mayor
City of Sebastopol
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
From: City_managers on behalf of Carolyn Coleman
To: [email protected]
Subject: [City_managers] California Business Roundtable Outreach to City Officials - PLEASE REVIEW Date: Tuesday, February 21, 2023 2:19:48 PM
Attachments: image001.png
Endorsement Request Sent To Council.pdf
ATT00001.txt
February 21, 2023
To: City Managers
From: Carolyn Coleman, Executive Director and CEO, League of California Cities Re: California Business Roundtable
Great to see everyone at the City Managers Conference in Carlsbad! As a follow up to my remarks during Conference, I wanted to let you know that the California Business Roundtable has mailed a letter and fact sheet to Mayors and Council Members throughout the state requesting they endorse the Taxpayer Protection and Government Accountability Act (see attachment).
In anticipation of you receiving questions from your elected officials, I want you to know the letter and fact sheet mischaracterize the impacts the measure will have on cities if the voters approve it in November 2024.
Specifically, the measure:
·
Does not clear up “confusion” about what a tax is. Rather, it expands what a tax is by converting some fees into taxes.
·
Does not preserve the predictability of tax dollars. It actually creates fiscal uncertainty by making the measure retroactive to Jan. 1, 2022. ·
Does not preserve local control. It prevents a city from negotiating the rental and sale of its own property.
·
Cannot “eliminate hidden taxes” because there is no such thing as a hidden tax.
·
Cannot “require truthful descriptions of new tax proposals” because truthful descriptions are already required. A general tax can be used for any governmental purpose, and a special tax must be used for the particular purpose earmarked by the voters.
·
Falsely argues that “massive increases in taxes and fees” punish hardworking families, when the measure in fact makes it more difficult for a city to punish municipal code violators and protect residents.
No matter how the California Business Roundtable tries to paint a different picture, let me be clear: this measure is one of the biggest threats to local control that we have ever faced.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Why do we all oppose it?
This measure calls for stricter rules for raising taxes, fees, assessments, and property-related fees that fund critical local services.
The measure puts at risk the billions of dollars currently dedicated to funding critical local services by creating new mechanisms to challenge or repeal local revenue-raising measures.
It could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services that support homeless residents, mental health services, and more.
The measure reduces funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities.
Your regional public affairs manager has shared an Action Alert calling on all cities to adopt a resolution formally opposing this measure. Currently, over 100 cities have passed resolutions. If you have not already adopted one, be sure your city is on record opposing this dangerous ballot measure as soon as possible.
Thank you for all you do and for supporting Cal Cities! As always, please do not hesitate to reach out to me if you have any questions.
Carolyn
Carolyn M. Coleman
Executive Director and CEO
League of California Cities
Office: 916.658.8275
Cell: 916.769.5729
[email protected] | www.calcities.org
Twitter │ Facebook │ YouTube │ LinkedIn
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
From:
Subject:
Date:
Attachments:
Importance:
Nancy Hall Bennett
ACTION ALERT: CA Business Roundtable Ballot Measure qualifies for the 2024 Ballot Wednesday, February 15, 2023 1:00:40 PM
image002.png
Members of the North Bay Division:
In 2022, when the initiative below was cleared for circulation for signatures to qualify for the ballot, I asked your city to pass a resolution opposing the measure.
Many of you answered that call, with over 100 other cities doing the same. If you did not pass a resolution in 2022 -please consider doing so now.
ACTION ALERT
State Ballot Measure
Restricting Voters’ Input and Local Taxing Authority
*** CITY RESOLUTIONS NEEDED ***
ACTION:
The anti-local control California Business Roundtable measure has qualified for the November 2024 ballot. Cal Cities requests cities adopt a city resolution to educate how harmful this measure would be to their community and the people of California.
Send adopted city resolutions to [email protected] and [email protected] as soon as possible. A sample city resolution, oppose letter, and staff report are attached.
BACKGROUND
On Feb. 1, 2023, the “Taxpayer Protection and Government Accountability Act,” or AG# 21-0042A1, qualified for the November 2024 ballot. This anti-local control measure will decimate vital local and state services to the benefit of wealthy corporations. The measure is sponsored by the California Business Roundtable (CBRT) — the lobbying arm of the largest and wealthiest corporations in California.
Cal Cities, along with a broad coalition of local governments, labor, public safety, education, and infrastructure advocates, strongly oppose this initiative.
The title and summary will read as follows on the November 2024 ballot:
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE
CONSTITUTIONAL AMENDMENT. For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters’ ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds. Eliminates voters’ ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax. Expands definition of “taxes” to include certain regulatory fees, broadening application of tax approval requirements. Requires Legislature or local governing body set certain other fees. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts. (21-0042A1.)
SUMMARY
If passed, the initiative limits voters’ authority, adopts new and stricter rules for raising taxes and fees, and may make it more difficult to hold violators of state and local laws accountable.
Effective date
All new or increased taxes or fees adopted by the Legislature, a city council, or the local voters after Jan. 1, 2022, must comply with the Act’s new rules- yes, the measure is retroactive.
State taxes
· All new or increased state taxes will require majority voter approval.
Local taxes
· New requirements for voter approval:
o when an existing tax is applied to a newly annexed territory. o when an existing tax is applied to a new service or product, for example when a utility user tax is applied to a new service.
· All new or increased taxes adopted after Jan. 1, 2022, must include a sunset date.
Fees and charges
· Requires that charges for access, use and rental of government property be “reasonable”.
· Fees and charges for services and permits 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.” Examples include planning services, excavation and encroachment permits, preparation of candidate statement, and permit parking.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
·
State and cities have burden of proving by “clear and convincing evidence” that a fee/charge is not a tax, that the amount is reasonable, and that it does not exceed the “actual cost.”
·
No fee or charge or exaction regulating vehicle miles traveled can be imposed on new development.
Fines and penalties [administrative enforcement of state law and municipal codes]
·
May require voter approval of fines and penalties 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. Examples include nuisance abatement, organic waste reduction requirements, and failure to maintain a vacant property.
Voters
·Local advisory measures are prohibited. No measure may appear on the ballot asking for approval of a general tax that would express the voters' preference for how the tax revenue should be used.
·Overturns Upland decision so taxes proposed by initiative are subject to the same rules as taxes placed on the ballot by a city council.
·Voters may not amend a city charter to impose, extend, or increase a tax or fee.
Fiscal
Puts approximately $2 billion from fees and charges at risk each year, subject to legal peril.
Puts approximately $2 billion of annual tax revenue at risk. Many tax measures approved between 2022-2024 will need to be resubmitted to voters to comply and be reapproved.
TALKING POINTS
Jeopardizes vital local and state services
·
This far-reaching measure puts at risk billions of dollars currently dedicated to critical state and local services.
·
It 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.
Undermines voter rights, transparency, and accountability This misleading measure changes our Constitution to make it more difficult for local voters to pass measures needed to fund local services and projects.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
It also includes a provision that would retroactively cancel measures that were passed by local voters — effectively undermining the rights of voters to decide for themselves what their communities need.
It would limit voter input by prohibiting local advisory measures, where voters provide direction to politicians on how they want their local tax dollars spent.
Opens the door for lawsuits, bureaucracy, and red tape that will cost taxpayers and hurt our communities
· The measure would encourage lawsuits, bureaucracy, and red tape that would cost local taxpayers millions — while significantly delaying and stopping investments in vital services.
Gives wealthy corporations a major loophole to avoid paying their fair share — forcing local residents and taxpayers to pay more
· The measure would create 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 — shifting the burden and making individual taxpayers pay more.
Allows corporations to dodge enforcement when they violate environmental, health, public safety, and other laws
· The deceptive scheme may create new loopholes that 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.
Nancy Hall Bennett (Ms./She/Her)
Public Affairs Manager, North Bay Division
League of California Cities
(415) 302-2032
[email protected] | www.calcities.org
Twitter │ Facebook │ YouTube │ LinkedIn
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023
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Fiscal and Program Effects of
Initiative 21-0042A1 on Local Governments
If Initiative 21-0042A1 is placed on the ballot and passed by voters, it will result in:
Over $20 billion of local government fee and charge revenues over 10 years placed at heightened legal peril. Related public service reductions across virtually every aspect of city, county, special district, and school services especially for drinking water, sewer sanitation, and public health and safety. About $2 billion of revenues each year from fees and charges adopted after January 1, 2021 subject to legal peril.
1 Over $2 billion dollars of annual revenues from dozens of tax measures approved by voters between January 1, 2022 and the effective date of the act2 subject to additional voter approval if not in compliance with the initiative.
Indeterminable legal and administrative burdens and costs on local government from new and more empowered legal challenges, and bureaucratic cost tracking requirements. The delay and deterrence of municipal annexations.
Substantially higher legal and administrative cost of public infrastructure financing which will delay and deter new residential and commercial development.
Service and infrastructure declines including in fire and emergency response, law enforcement, public health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing, homelessness prevention and mental health services.
1. Local Government Taxes and Services Threatened
With regard to taxes, Initiative 21-0042A1:
Prohibits advisory, non-binding measures as to use of tax proceeds on the same ballot. o Voters may be less informed and more likely to vote against measures. Eliminates the ability of special tax measures proposed by citizen initiative to be enacted by majority voter approval (Upland).3
o Because the case law regarding citizen initiative special taxes approved by majority vote (Upland) is so recent, it is unknown how common these sorts of measures might be in the future. This initiative would prohibit such measures after the effective date of the initiative. Any such measures adopted after January 1, 2022 through the effective date of the Act should it pass would be void a year after the effective date of the initiative. Requires that tax measures include a specific duration of time that the tax will be imposed. This seems to require that all tax increases or extensions contain a sunset (end date). o This would require additional tax measures to extend previously approved taxes. A city charter may not be amended to impose, extend, or increase a tax might interfere with the ability of cities that do not already have such authority in their charters to adopt Property Transfer Taxes. o There are no more than a few of these every few years, but it is a valuable tax for those that adopt it.
1 Assumes fee increases since January 1, 2022 would be subject to possible legal challenge if not adopted in compliance with the Initiative.
2 The effective date of the initiative would be sometime in December 2024, the date the California Secretary of State certifies the election results of the November 5, 2024 election.
3 Unlike the initiative 17-0050, this initiative does not eliminate that ability of cities and counties to adopt general taxes by majority voter approval.
2217 Isle Royale Lane • Davis, CA • 95616-6616
Phone: 530.758.3952 • Fax: 530.758.3952
Rev. January 14, 2023
Agenda Item Number: 5
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Requires that a tax measure adopted after January 1, 2022 and before the effective date of the initiative that was not adopted in accordance with the measure be readopted in compliance with the measure or will be void twelve months after the effective date of the initiative. o If past election patterns and elections in 2022 are an indication, over 200 tax measures approving more than $2 billion annual revenues to support local public services would not be in compliance and would be subject to reenactment. Most will be taxes without a specific end date and special taxes (including parcel taxes). Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, the measures would each require declaration of emergency and unanimous vote of the governing board to be placed on a special election ballot within a year for approval or the tax will be void after that date. I would expect most to succeed, but some will not, in particular citizen initiative majority vote special taxes which would have to meet a higher voter approval threshold to continue. Requires voter approval to expand an existing tax to new territory (annexations). This would require additional tax measures and would deter annexations and land development in cities. o If a tax is "extended" to an annexed area without a vote after January 1, 2022, it will be void 12 months later until brought into compliance. Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, such extensions would each require unanimous vote of the agency board to be placed on a special election ballot or would be void a year later.
1.a. Number of Measures and Value of Local Taxes at Risk4 Over a hundred local measures were approved in 2022 that likely do not comply with the provisions of Initiative 21-0042A1. Nearly $2 billion of annual revenues from these voter approved measures will cease a year after the effective date of the measure, reducing the local public services funded by these measures. We can expect a similar volume of measures in 2024 and a similar volume of non-compliance. So the combined total of annual local funding directly affected by Initiative 21-0042A1 due to its retroactivity provision is about $4 billion.
Citizen Initiative Special Taxes in 2022.
Special taxes placed on the ballot by citizen initiative and approved after January 1, 2022 by a majority but less than two-thirds of the voters are out of compliance with Initiative 21-0042A1.
On June 7, 2022, there were three local special tax measures placed on the ballot by citizen initiative. Two failed to get majority voter approval. A one percent transactions and use tax (sales tax) for the John C. Fremont Healthcare District in Mariposa County received 69.6 percent approval, over the two thirds needed for any special tax under California Constitution Article XIIIC. So this measure was passed in compliance with Initiative 21- 0042A1.
On November 8, 2022, there were 14 local special taxes placed on the ballot by citizen initiative. Seven of these 4 Source: Compilation and summary of data from County elections offices.
June 2022 Initiative Special Taxes - majority voter approval Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
John C. Fremont
Healthcare District Mariposa Measure N Transactions & Use Tax 1 cent $ 150,000 hospital 40yrs 69.6% PASS County of Kings Kings Measure F Transactions
& Use Tax 1/2 cent $ 11,700,000 fire none 37.6% FAIL
Manhattan Beach
USD Los Angeles Measure A School Parcel Tax $1095/yr $ 12,000,000 schools 12yrs 31.2% FAIL Agenda Item Number: 5
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measures failed with less than majority voter approval. The other seven measures received majority, but less than two-thirds, voter approval. These measures passed under current law but are out of compliance with Initiative 21- 0042A1. Taken together these seven taxes will provide estimated annual revenues of from $900,000 to $1.4 billion in support of parks and recreation, zoo, library, affordable housing, transportation, homelessness prevention, and schools in these communities.
Non-Specific Tax Durations in 2022
Voters approved 106 measures in June 2022 (10) and November 2022 (96) that do not provide a specific duration of time that the tax will be imposed (end date). Typically, the ballot titles for these measures state that the tax would be imposed “until ended by voters.” Four of these measures also did not include any estimate of the annual revenues that the tax would generate, another violation of initiative 21-0042A1. Taken together, these approved local measures generate $561 million per year that will expire a year after the effective date of the initiative if Initiative 21-0042A1 passes.
November 2022 Initiative Special Taxes - majority voter approval Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
Crockett Community
Services District Contra Costa Measure L Parcel Tax $50/parcel $ 60,000 parks/recr none 62.8% PASS Oakland Alameda Measure Y Parcel Tax $68/parcel $ 12,000,000 zoo 20yrs 62.5% PASS County of Mendocino Measure O Transactions
& Use Tax
1/8 cent then 1/4
cent in 2027 $ 4,000,000 library none 60.8% PASS
Los Angeles Los Angeles Measure ULA Property
Transfer Tax
4% if >$5m, 5.5%
if >$10m $600 m to $1.1 b affordable housing none 57.3% PASS County of Sacramento Measure A Transactions
& Use Tax same 1/2 cent $ 212,512,500 transportati
on
40yrs 55.3% PASS
San Francisco Proposition M Business
Operations Tax
$2500-$5000/
vacant resid unit $ 20,000,000 housing 30yrs 54.5% PASS Santa Monica Los Angeles Measure GS Property
Transfer Tax
$56/$1000 if
>$8m $ 50,000,000
schools,
homelessne
ss, afford.
housing
none 53.3% PASS
Total $900,000 to
$1.4 billion
Agency Name County Tax/Fee Rate
Estimated
Annual Revenue Use Sunset YES%
County of Calaveras Measure A Transactions
& Use Tax 1 cent $ 5,000,000 fire none 49.4% FAIL
South San Francisco
(for Schools) San Mateo Measure DD School Parcel Tax $2.50/sf $ 55,900,000 schools none 47.2% FAIL County of Fresno (for CSU ) Measure E Transactions
& Use Tax
1/5 ct,
1/40 ct (Reedley) $ 36,000,000 Calif State Univ 20yrs 46.9% FAIL Santa Cruz Santa Cruz Measure N Parcel Tax $6k/vacant SFU xxx vacant property
xxx 44.2% FAIL
County of Monterey Measure Q Parcel Tax $49/parcel $ 5,500,000 childcare 10yrs 41.1% FAIL San Francisco City
College
San
Francisco Measure O School Parcel Tax $150/sfu $ 37,000,000 schools 10yrs 36.7% FAIL Morro Bay San Luis
Obispo Measure B Parcel Tax $120+/parcel $ 680,000 harbor none 36.0% FAIL Inverness Public
Utility District Marin Measure O Parcel Tax $0.20/sf, $150/vacant $ 276,000 fire none 27.0% FAIL Agenda Item Number: 5
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Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Oakland Alameda Measure T Business Tax
General various $ 20,900,000 none 71.4% PASS
Culver City Los Angeles Measure BL Business Tax
General various $ 10,000,000 none 60.5% PASS
El Segundo Los Angeles Measure BT Business Tax
General various $ 3,000,000 none 51.2% PASS
Pico Rivera Los Angeles Measure AB Business Tax
General various $ 5,800,000 none 75.5% PASS
Santa Ana Orange Measure W Business Tax
General various neutral none 64.8% PASS
Tracy San Joaquin Measure B Business Tax
General various $ 3,200,000 none 72.6% PASS
Burlingame San Mateo Measure X Business Tax
General various $ 2,500,000 none 75.1% PASS
Los Gatos Santa Clara Measure J Business Tax
General various $ 1,100,000 none 53.4% PASS
Santa Clara Santa Clara Measure H Business Tax
General
$45/employee,
$15/rental unit $ 6,000,000 none 59.5% PASS
Brisbane San Mateo Measure O Business Tax
lodging busn $2.50/rm/day $ 250,000 none 69.2% PASS
East Palo Alto San Mateo Measure L Business Tax
resid. rentals
2.5%
grossRcpts $ 1,480,000 none 69.9% PASS
County of Santa Cruz Unincorporated Measure C Busn Tax - disp cups 12.5cents/cup $ 700,000 none 68.2% PASS
South Lake Tahoe El Dorado Measure G Busn Tax
Cannabis
6% retail,
manufacturing $ 950,000 none 62.9% PASS
McFarland Kern Measure O Busn Tax
Cannabis
8% of gross
receipts retail, $ 1,800,000 none 63.5% PASS
Avenal Kings Measure C Busn Tax
Cannabis
$25+/sf or
15% gr rcpts $ 600,000 none 61.8% PASS
Baldwin Park Los Angeles Measure CB Busn Tax
Cannabis
4%
grossRcpts $ 300,000 none 51.3% PASS
Claremont Los Angeles Measure CT Busn Tax
Cannabis
4%-7% gr
rcpts, $1- $ 500,000 none 61.1% PASS
County of Los Angeles Unincorporated Measure C Busn Tax Cannabis
4% gross
receipts retail, $ 15,170,000 none 60.1% PASS
Cudahy Los Angeles Measure BA Busn Tax
Cannabis
15%
grossRcpts $ 3,600,000 none 54.0% PASS
El Segundo Los Angeles Measure Y Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 72.8% PASS
Hermosa Beach Los Angeles Measure T Busn Tax
Cannabis
10%
GrossRcpt, $ 1,500,000 none 67.6% PASS
Lynwood Los Angeles Measure TR Busn Tax
Cannabis 5%to10% $ 3,000,000 none 66.4% PASS
Santa Monica Los Angeles Measure HM Busn Tax
Cannabis
10% gross
Rcpts $ 5,000,000 none 66.4% PASS
South El Monte Los Angeles Measure CM Busn Tax
Cannabis
6% special
excise tax on $ 126,000 none 53.7% PASS
Monterey Monterey Measure J Busn Tax
Cannabis 6% grossRcpt $ 1,300,000 none 65.2% PASS
Pacific Grove Monterey Measure N Busn Tax
Cannabis 6% grossRcpt $ 300,000 none 70.8% PASS
Huntington Beach Orange Measure O Busn Tax
Cannabis
6% retail, 1%
other $ 600,000 none 54.7% PASS
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Notes
?= Ballot measure title did not include an estimate of annual revenues, also not in compliance with Initiative 21-0042A1. n/a*= Arcadia Measure SW passed but sports betting remains illegal after the failure of Propositions 26 and 27 on the November statewide ballot.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Laguna Woods Orange Measure T Busn Tax
Cannabis
4%-10% of
gross receipts $ 750,000 none 61.1% PASS
Corona Riverside Measure G Busn Tax
Cannabis
9% of gross
receipts for $ 5,000,000 none 61.6% PASS
Montclair San Bernardino Measure R Busn Tax
Cannabis
7%
grossRcpts $ 3,500,000 none 70.3% PASS
County of San Diego Unincorporated Measure A Busn Tax
Cannabis
6% retail, 3%
distribution, $ 5,600,000 none 57.4% PASS
Encinitas San Diego Measure L Busn Tax
Cannabis
4% to 7% of
gross receipts $ 1,400,000 none 65.1% PASS
Healdsburg Sonoma Measure M Busn Tax
Cannabis 8% grossRcpt $ 500,000 none 72.7% PASS
Exeter Tulare Measure B Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 66.5% PASS
Tulare Tulare Measure Y Busn Tax
Cannabis
10% retail and
other, $10/sf ? none 65.2% PASS
Woodland Yolo Measure K Busn Tax
Cannabis
10%
grossRcpts
? none 66.2% PASS
Redlands San Bernardino Measure J Busn Tax
Distrib centers
from $0.047/sf
to $0.105/sf $ 530,000 none 53.5% PASS
Arcadia Los Angeles Measure SW Busn Tax
Sports Betting
5%
grossRcpts
n/a* none 63.9% PASS
Albany Alameda Measure K ParcelTax $0.074+/sf $ 1,950,000 fire/EMS none 76.0% PASS Cameron Park Airport
District El Dorado Measure J ParcelTax by $600 to $900/parcel $ 117,900 airport/ streets none 78.2% PASS Highlands Village
Lighting Benefit Zone El Dorado Measure L ParcelTax $140+/parcel $ 10,920 streets none 86.3% PASS Knolls Property
Owners CSD El Dorado Measure P ParcelTax by $300+ to $600+/parcel $ 8,400 streets none 75.5% PASS Sundance Trail Zone of
Benefit El Dorado Measure C ParcelTax $600+/yr $ 24,000 roads none 73.2% PASS South Pasadena Los Angeles Measure LL ParcelTax xxx ? library none 86.2% PASS River Delta Fire District Sacramento Measure H ParcelTax $90/yr $ 130,000 fire none 72.1% PASS Emeryville Alameda Measure O PropTransfTax $15/$1000 if $1m-$2m, $ 5,000,000 none 71.6% PASS
San Mateo San Mateo Measure CC PropTransfTax by 1% to 1.5% if >$10m $ 4,800,000 none 71.8% PASS
Alameda Alameda Measure F TOT by 4% to 14% $ 910,000 none 59.2% PASS Clovis Fresno Measure B TOT by 2% to 12% $ 500,000 none 69.7% PASS Kerman Fresno Measure G TOT 10% $ 40,000 none 62.3% PASS Trinidad Humboldt Measure P TOT by 4% to 12% $ 65,000 none 77.6% PASS Imperial Imperial Measure G TOT by 4% to 12% $ 600,000 none 56.2% PASS Arcadia Los Angeles Measure HT TOT by 2% to 12% $ 730,000 none 54.1% PASS Santa Monica Los Angeles Measure CS TOT by 1%, 3%
home shares $ 4,100,000 none 73.7% PASS
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Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Anaheim Orange Measure J TOT online travel
companies $ 3,000,000 none 59.2% PASS
La Palma Orange Measure P TOT by 4% to 12% $ 200,000 none 71.1% PASS Colfax Placer Measure B TOT by 2% to10% $ 29,000 none 73.5% PASS Rocklin Placer Measure F TOT by 2% to 10% $ 300,000 none 59.8% PASS Roseville Placer Measure C TOT by 4% to 10% $ 3,000,000 none 73.0% PASS Big Bear Lake San Bernardino Measure P TOT by 2% to 10% $ 1,300,000 none 54.4% PASS Grand Terrace San Bernardino Measure M TOT new 10% $ 250,000 none 51.9% PASS Yucca Valley San Bernardino Measure K TOT by 5% to 12% $ 1,300,000 none 71.9% PASS Imperial Beach San Diego Measure R TOT by 4% to 14% $ 400,000 none 67.4% PASS El Paso de Robles San Luis ObispoMeasure F TOT by 1% to 11% $ 750,000 none 61.2% PASS Belmont San Mateo Measure K TOT by 2% to 14% $ 600,000 none 79.3% PASS Millbrae San Mateo Measure N TOT by 2% to 14% $ 1,500,000 none 75.8% PASS County of Humboldt Unincorporated Measure J TOT by 2% to 12% $ 3,080,000 none 63.3% PASS County of Placer -
North Tahoe TOT Area Measure A TOT by 2% to 10% $ 4,000,000 none 90.0% PASS County of Santa Cruz Unincorporated Measure B TOT by 1% to 12% $ 2,300,000 none 69.2% PASS County of El Dorado -
East Slope Tahoe Measure S TOT 2/3 by 4% to 14% $ 2,500,000 none 81.8% PASS Chico Butte Measure H TrUT 1 cent $ 24,000,000 none 52.4% PASS Mendota Fresno Measure H TrUT 1.25 cent $ 493,498 none 57.2% PASS Blue Lake Humboldt Measure R TrUT 1 cent $ 30,000 none 55.4% PASS Rio Dell Humboldt Measure O TrUT 3/4cent $ 400,000 none 53.3% PASS County of Kern unincorporated areas Measure K TrUT 1 cent $ 54,000,000 none 50.8% PASS McFarland Kern Measure M TrUT 1 cent $ 579,662 none 62.2% PASS Tehachapi Kern Measure S TrUT 1 cent $ 4,000,000 none 57.2% PASS Avenal Kings Measure A TrUT 1 cent $ 500,000 none 72.5% PASS Susanville Lassen Measure P TrUT 1 cent $ 1,750,000 none 54.7% PASS Baldwin Park Los Angeles Measure BP TrUT 3/4 cent $ 6,000,000 none 58.1% PASS Malibu Los Angeles Measure MC TrUT 1/2 cent $ 3,000,000 none 52.6% PASS Monterey Park Los Angeles Measure MP TrUT 3/4 cent $ 6,000,000 none 58.5% PASS Torrance Los Angeles Measure SST TrUT 1/2 cent $ 18,000,000 none 55.0% PASS Larkspur Marin Measure G TrUT 1/4 cent $ 700,000 none 59.4% PASS Sand City Monterey Measure L TrUT by 1/2cent to
1.5cents $ 1,400,000 none 68.7% PASS
Hemet Riverside Measure H TrUT same 1 cent $ 15,000,000 none 58.0% PASS Elk Grove Sacramento Measure E TrUT 1 cent $ 21,000,000 none 54.1% PASS Galt Sacramento Measure Q TrUT 1 cent $ 3,600,000 none 52.4% PASS Colton San Bernardino Measure S TrUT 1 cent $ 9,500,000 none 66.8% PASS Ontario San Bernardino Measure Q TrUT 1 cent $ 95,000,000 none 53.2% PASS Solana Beach San Diego Measure S TrUT 1 cent $ 3,000,000 none 66.7% PASS Brisbane San Mateo Measure U TrUT 1/2 cent $ 2,000,000 none 63.9% PASS Goleta Santa Barbara Measure B TrUT 1 cent $ 10,600,000 none 64.7% PASS Solvang Santa Barbara Measure U TrUT 1 cent $ 1,600,000 none 63.1% PASS Agenda Item Number: 5
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Co-temporal Advisory Measures in 2022
At the November 2022 election, there was just one local general tax measure that was accompanied by an advisory measure as to the use of funds. The City of Santa Monica’s Measure DT property transfer tax failed with just 34 percent approval as voters instead chose the citizen initiative Measure GS.
There was also just one such tax use advisory measure on the June 2022 election. Susanville’s voters passed Measure P, a 1 percent transactions and use (sales) tax that generates $1.75 million per year5 for general city services. The measure was accompanied by advisory Measure Q, accompanied the city’s It asked, “If Measure P passes, should the revenues be used to balance the budget to maintain and enhance existing public safety services (police and fire), and provide funding to support street infrastructure improvements and provide funding to support economic development efforts designed to increase businesses, jobs and visitors to Susanville?” Both measures passed. Under Initiative 21-0042A1, the tax will expire a year after the effective date of the initiative (i.e., in December 2025).
1.b. Additional Costs and Public Service Effects of the Tax Provisions Assuming a similar volume of local measures through 2024 as we saw in 2022, there will be over 200 local measures that will need to be redrafted to comply with the Initiative and placed back on the ballot for the taxes to continue after December 2025. The costs of re-drafting, re-placing and re-voting on these measures, previously legally approved by voters, will be in the tens of millions in total statewide.
2. “Exempt Charges” (fees and charges that are not taxes) and Services Threatened With regard to fees and charges adopted after January 1, 2022, Initiative 21-0042A1:
Subjects new fees and charges for a product or service to a new "actual and reasonable test." Subjects fees and charges for entrance to local government property; and rental and sale of local government property to a new, undefined, “reasonable” test. Allows legal challenge to any tax adopted before the effective date of the initiative and after January 1, 5 The Susanville measure also did not include a specific end date and so is included in the list and totals of those measures.
Measures in 2022 with Non-Specific Durations
Agency Name County Tax/Fee Rate
Annual
Revenue Use Sunset YES%
Watsonville Santa Cruz Measure R TrUT 1/2 cent $ 5,000,000 none 64.4% PASS Vallejo Solano Measure P TrUT 7/8 cent $ 18,000,000 none 54.7% PASS Modesto Stanislaus Measure H TrUT 1 cent $ 39,000,000 none 62.8% PASS County of Colusa Measure A TrUT 2/3 1/2 cent $ 2,400,000 EMS none 69.4% PASS Atwater Merced Measure B TrUT 2/3 same 1 cent $ 4,000,000 police/fire none 73.7% PASS Truckee Nevada Measure U TrUT 2/3 by 1/4 cent to
1/2 cent $ 3,000,000 open space / trails none 76.4% PASS Palo Alto Santa Clara Measure L UtilityTransfer 18% gas $ 7,000,000 none 77.7% PASS Santa Clara Santa Clara Measure G UtilityTransfer 5 % $ 30,000,000 none 84.2% PASS Hercules Contra Costa Measure N UUT 8% $ 3,600,000 none 69.3% PASS Carson Los Angeles Measure UU UUT 2% electr, gas $ 8,000,000 none 78.4% PASS Sebastopol Sonoma Measure N UUT 3.75% (same) $ 700,000 none 83.5% PASS Agenda Item Number: 5
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2022. Such a lawsuit could enjoin (stop) the enactment of the tax pending the outcome of the legal challenge.
Subjects a challenged fee to new, higher burdens of proof if legally challenged.
2.a. Value on New Local Government Fees and Charges at Risk6 Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local government fee and charge revenue placed at risk is about $2 billion per year including those adopted since January 1, 2022. Of $2 billion, about $900 million (45 percent) is for special districts, $800 million (40 percent) is cities, and $300 million (15 percent) is counties.7 Major examples of affected fees and charges are:
1. Certain water, sanitary sewer, wastewater, garbage, electric, gas service fees.
2. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund community safety, code enforcement, and neighborhood cleanup programs.
3. Emergency response fees - such as in connection with DUI.
4. Advanced Life Support (ALS) transport charges.
5. Business improvement district charges.
6. Fees for processing of land use and development applications such as plan check fees, use permits, design review, environmental assessment, plan amendment, subdivision map changes.
7. Document processing and duplication fees.
8. Facility use charges, parking fees, tolls.
9. Fines, penalties.
10. Fees for parks and recreation services.
2.b. Additional Costs and Public Service Effects of the Fee/Charge Provisions In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure financing more difficult and will deter new residential and commercial development. ***********
mc
6 Source: California State Controller Annual Reports of Financial Transactions concerning cities, counties and special districts, summarized with an assumed growth due to fee rate increases (not population) of 2 percent annually. 7 School fees are also affected but the amount is negligible by comparison.
Agenda Item Number: 5
Agenda Item Number: 5
City Council Meeting Packet of: March 7, 2023