Citizens' initiative tax measures under scrutiny due to only needing simple majority

A number of new tax measures were on Tuesday's ballot, some successful, some not. But almost all of them employed a legal loophole called a "citizens' initiative" that made it possible to pass with a simple majority. But that may be changing in November.

In 2022, the tiny town of Crockett passed the Measure L parcel tax to raise $63,000 annually for street lighting and landscape maintenance.  It got nearly 63% of the vote, but it only passed because in 2017 the courts ruled that tax measures generated by "citizens," rather than a government body, only need a simple majority, not the 2/3 vote required by Prop 13.  

Since then, just about everyone looking to raise taxes has used a citizens' group to front the effort. Susan Shelley, with the Howard Jarvis Taxpayers Association, said the courts essentially re-wrote Proposition 13.

"So, where is this exception that came up for a citizen initiative tax increase?" she said.  "And who are these citizens who want to raise their taxes?"

In Oakland, Measure E would have raised $34 million in parcel taxes, ostensibly to fund public safety efforts. But the measure was pushed by the city's employee unions and critics said its vague wording made it possible for the city council to spend the money on just about anything. Measure E appears headed for defeat, unable to even get a simple majority, but Shelley said it's an example of how Prop 13 is being thwarted.

"And the problem here is that this loophole has allowed special interests to write their own tax increase," she said. "To direct all the money to themselves, collect the signatures to put it on the ballot, and evade the 2/3 vote requirement."

In the North Bay, the people at SMART are celebrating a big win. Their new 30-year sales tax proposal was also a citizens' initiative, but with Tuesday's 70% "yes" vote, they didn't even need it. Although, General Manager Eddy Cummins admits he was hired after a previous tax measure was defeated when it didn't reach the 2/3 threshold.

"I mean, 2/3 is hard," said Cummins.  "Anything you would put on the ballot, I think 2/3 is a very high bar.  It's something that's very difficult to achieve. But when I was hired for this position, 2/3 was the goal, and that's what's been on my mind the whole time."

But this may all change in November. The Jarvis group has qualified a proposition, currently called "Initiative 1983," that would end the citizen's initiative loophole, requiring that all tax measures get 2/3 for passage. It would also retroactively invalidate any new parcel tax that passed with less than 2/3 of the vote.

Kyle Packham, Advocacy Officer for the California Special District Association, said the provisions of the initiative mean places like Crockett could lose their funding source, and some other cities could face bankruptcy.

"Really, this is an anti-local control measure," said Packham, "because it's letting statewide voters retroactively invalidate the decisions of local communities that have already been put into place."

But there is one more twist in this fight. Another proposition, currently called "ACA 13," has also qualified for November, saying if an initiative seeks to impose a higher vote standard on tax measures, it too must meet that same vote threshold.  In other words, the Jarvis proposition itself would also need to get 2/3 of the vote in order for it to pass.

All propositions for the November ballot will be officially certified on June 25. Before then, there are meetings scheduled in Sacramento to see if a deal can be worked out that would convince one side or the other to agree to drop their initiatives.