California Supreme Court grants a wish to school communities

by Carol Kocivar | October 30, 2022 | 0 Comments
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An easier way to pass local taxes for schools

Recent court cases have established a path for voters to approve parcel taxes by a simple majority vote. This is a new change, and it’s a very big deal.

Do I hear cheering? Here is how to do it.

To understand why, some background is necessary. About half a century ago, California voters passed Proposition 13, which amended the state constitution in a way that severely limits the power of local communities to tax themselves. Within limits, local governments were permitted to place special tax measures on the ballot, but to pass them required a supermajority 2/3 vote, which is an extraordinarily high bar.

In the last few years, a series of court cases have established a path for tax measures to reach local ballots in a way that requires only a majority vote to pass, rather than a 2/3 supermajority.

Do I hear cheering? Here is how to do it.

If a local tax measure to support a special issue like schools is put on the ballot by a citizen’s initiative — that is, as a result of people collecting signatures — the measure can be passed by a simple majority. If the measure is placed on the ballot by your school board (or city council, board of supervisors, etc.) it still requires a two thirds vote.

This change didn’t happen overnight, it’s a little complicated, and there are still policy questions ahead. The rest of this post provides some background about the history of the change, why it matters, and where to find out more.

California’s radical constitution

California’s constitution has provided for direct democracy through initiatives since 1911. The initiative is the power of the people of California to propose statutes and to propose amendments to the state Constitution.

Practically no one remembers, but before the "taxpayers' revolt" passage of Proposition 13 in 1978, local governments generally had the constitutional authority to raise or lower tax rates. Direct approval from voters was not required. A series of court decisions and Proposition 13 stripped local school boards and other entities of this authority.

The table below, adapted from a summary by the California Legislative Analyst’s Office (LAO), shows the many state propositions that have modified the direct vote requirements for local taxes:

Milestones in Voter-Approval Requirements for Local Taxes in California

1978

Proposition 13

  • Lowered the property tax rate to a maximum of 1 percent (for general purposes)
  • Required special taxes to be approved by two-thirds of voters.

1982

City and County of San Francisco v Farrell

  • Defined a special tax as a tax levied for a specific purpose.

1986

Proposition 46

  • Allowed local governments to raise the property tax rate to finance infrastructure bonds if approved by two-thirds of local voters

1986

Proposition 62

  • Required general taxes to be approved by a simple majority of voters. (Did not apply to charter cities.)

1996

Proposition 218

  • Required all general taxes to be approved by a simple majority of voters.
  • Defined a special tax as all taxes (1) levied by special districts and school and community college districts and (2) used for specific purposes.
  • Required all parcel taxes to be levied as special taxes.

2000

Proposition 39

  • Lowered the voter approval threshold for school facilities bond measures to 55%.

2010

Proposition 26

  • Narrowed the scope of charges that local governments can levy without voter approval

2021

San Francisco Prop. G

  • The California Supreme Court affirmed the constitutional power of the people to raise taxes with a simple majority vote.

Proposition 13 blocked school districts from levying taxes based on the value of property. An alternative emerged: the parcel tax, which is based on the existence of property rather than on its value. (Parcel taxes are regressive and there are many things to dislike about them, as explained in Ed100 Lesson 8.9. For example, large and small parcels generally pay the same tax regardless of value.) In 1996, voters passed Proposition 218, which made parcel taxes difficult to pass by classifying them as special taxes that required a two-thirds vote. Few school districts even attempted it, other than some districts in northern California:

These measures shifted power out of the reach of school communities, making Sacramento the center of the universe when it came to education policy decisions. Parent fundraising became a cottage industry, but the amount that parents can raise is peanuts. Overall, California’s effective effort to fund public schools fell behind other states.

A majority vote for local school funding? What are you smoking?

A 2017 case, California Cannabis Coalition v. City of Upland, opened the door to significant clarification of how schools and communities can raise local special taxes. The case hinged on an argument about something that might seem dull: Does an initiative require a special election or a general election? The case went all the way to the California Supreme court because it involved two provisions of the California Constitution:

  • The Constitutional provisions that control a local government's power to raise taxes.
  • The Constitutional provisions that protect citizens' initiatives.

Now we get into the (ahem) weeds. The California Supreme Court held that Article XIII C, section 2 of the Constitution—which requires a general election—only applies to tax levies that are imposed by local governments. It does not constrain voters’ constitutional power to propose and adopt initiatives. Because this case involved an initiative and was not proposed by a local government, the court ruled that the initiative should be voted on at a special election. The court noted that the initiative is “one of the most precious rights of our democratic process.”

Can the court reasoning in a marijuana case be used for school funding?

This decision got people thinking. Even though this was a dispute over whether a vote should be held at a general or special election, could this reasoning be used to expand the ability of local communities to raise money for schools? After all, it is essentially the same issue. Which constitutional provision prevails? Can a constitutional provision regulating taxation by local governments (e.g. the two-thirds vote requirement for a parcel tax) override the right of a majority vote in a citizens initiative?

San Francisco pushes the envelope

In 2018, three initiatives on the ballot in San Francisco passed by more than a majority of votes, but fell short of a two thirds supermajority. Using the argument that citizens initiatives only need to be passed by a majority vote, San Francisco declared victory.

All three initiatives were challenged by the Howard Jarvis Taxpayers Association, an anti-tax group, along with other plaintiffs who sued to invalidate the ballot measures saying they needed two-thirds approval.

After several years of litigation, San Francisco prevailed. The San Francisco City Attorney’s office was the first public law office to successfully argue that voters only need a simple majority to pass measures that they have placed on the ballot through the initiative process.

In 2020, the fifth district court of appeals in City of Fresno v. Fresno Building Healthy Communities followed the decision of the San Francisco cases. A sales tax put on the ballot by a citizens initiative only needs a majority vote, not a two thirds vote.

In June 2022, Measure O, a sales tax initiative to fund hospital construction, was passed in Mariposa county by 69.72%. A simple majority vote was required for the approval of the ballot measure.

Next Move

A simple majority vote makes it easier to raise taxes to support schools and other specific purpose taxes. More communities might be able to successfully support schools through an initiative, not only the wealthiest and best-organized. Many of the parcel tax votes that failed in the past garnered more than a majority of votes but less than two thirds.

Passing an initiative is not a walk in the park. It will take legal advice, community organizing, and a significant campaign. Even with a citizens initiative, school districts have restrictions on use of public resources for election activities.

What are the rules? Contact your county elections official or city clerk to find out how to qualify a local initiative for the ballot.

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