*Poison Pill: A poison pill is a Wall Street tactic. It is used by corporate boards and executives in order to make it unreasonable for other investors to buy a large amount of the corporations stock in a takeover attempt. The tactic is used by insiders who want to keep their jobs. By analogy, if Hanlon's Razor ("stupidity") is not what's behind TPGAA, it's a way for the lawyers to keep relevant to individuals, businesses, and organizations. If the voters pass TPGAA, they will have swallowed the poison bill. Unlike Wall Street investors who would weigh the pros and cons of swallowing the poison pill, the voters will be clueless, having been betrayed by people who they believed were on their side.
Table of Contents
Introduction
"The good part, William, is that, no matter whether our clients make money or lose money, Duke & Duke get the commissions." Randolph Duke to Billy Ray Valentine, Trading Places (1983)
At this time the primary audience for this material are the TPGAA funders. The funders are the group of business organizations who have funded TPGAA thus far and who are expected to fund the campaign to get TPGAA passed.
The TPGAA brain-trust are the group of organizations who have been working over many years to "protect" Proposition 13 and its progeny. We don't know the exact composition of the brain-trust because that is not public knowledge. We expect that the brain-trust consists primarily of the lawyers and law firms who have been losing important cases and elections over the many years since Proposition 13 (1978) passed. The funders know who the brain-trust is. We don't need to name names. Besides the lawyers who claim expertise on the issues, we also expect the brain-trust includes public relations and marketing individuals and organizations who will benefit directly from the money that the funders provide from the campaign to pass TPGAA.
We are urging the funders to reconsider TPGAA, despite all the money that has been spent thus far. We are urging the funders to withdraw TPGAA for the reasons explained herein. We suspect that the funders have been hoodwinked by the brain-trust. We expect that the brain-trust, feeling threatened by this material, will viciously attack us. We have documented the most important failings of TPGAA. TPGAA is like the "bullet train," a favorite target of at least one brain-trust member. It will never deliver what it promises. In the process, it will cost much, much more than the funders expect. There will be no end in sight for the soaring costs. There will also be no assurances that the expenditures will actually achieve the result.
As you will learn herein, TPGAA will fundamentally change local measure elections. Those elections, one way or another, directly affect all of the thirty-nine million people in California. The statewide measure elections, not so much.
As you read, please don't take the commentary in the spirit of captiousness. It was not intended that way. We know that many of the purported faults are likely of little or no effect. Our point is that the big faults are really big. Illustrating the minor ones just reinforces our contention that TPGAA was not well thought out. Within the parameters of trying to fix Proposition 218 (1996) rather than replace it, the brain-trust had a tough task.
The Propaganda
If you were to believe the propaganda from the proponents, you would think TPGAA is a God-send.
- Empowers voters with the right to approve or reject all new state and local taxes.
- Increases accountability and transparency so politicians spend our tax dollars more efficiently.
- Stops politicians from using "hidden taxes" disguised as fees to drive up the cost of government services.
As with all propaganda, their is an air of truth to it, but, ultimately, it is not true.
The "all new state and local taxes" claim has exceptions or exemptions. For example, "sewer, water, and refuse collection services," as well as "electrical or gas service" charges, are outside the scope of TPGAA. In effect, TPGAA continues (creates) a huge loophole that allows both state and local governments to embed taxes in the rates for truly essential services, unless of course you're sharing a cabin with Ted Kaczynski. The voters have no say in those embedded, hidden taxes.
The "accountability and transparency" claim only applies to the ballot, and even then only kinda. In the case of local taxes, its claim belies its poison pill as discussed below.
The "hidden taxes" claim is, perhaps, partially true when the phrase "of government services" is appended to it. That's much like the claim by everyone who you can't trust that there is no "widespread" election fraud in the United States. In both cases, adding the modifier makes the statements defensible. Many people would describe "hidden taxes" as all the payments they make that have increased the cost of everything they purchase, without any corresponding benefit. You know, things like inflation, the costs imposed on energy, the costs imposed on employers, the costs imposed on manufacturing, the costs imposed on landlords, the costs imposed on construction, and on and on. We're not talking about warranted costs here, like when businesses shift the costs of their harmful practices to the public. We're talking about costs imposed just because they can.
TPGAA is far from what it claims to be. If it did no damage, there wouldn't be much basis for complaints. However, the damage is massive, primarily for local tax measures. Under TPGAA, the number of local measures on the ballot will surge beyond belief. TPGAA will actually cost local tax payers more, just in the costs they pay for local elections, while at the same time giving the government constitutional authority to take sides in the elections using public moneys.
Executive Summary
We expect that the writ of mandate case argued on May 8, 2024 will be denied. [We were wrong. The writ was granted.
Legislature v. Weber (Hiltachk) (June 20, 2024) S281977.]TPGAA accomplishes absolutely nothing. By that we mean that, lacking any enforcement provisions, every provision of TPGAA will require a lawsuit against either the Legislature or a local government to effectuate its provisions. The brain-trust will be able to blame the "hostile" courts when parts of it are held to violate the constitution or the outcome doesn't conform to what the brain-trust wanted. All those lawsuits will be defended using tax payer money. If any lawsuit succeeds, it will be a Pyrrhic victory.
Nevertheless, TPGAA starts off out-of-the-gate with a daunting challenge -- the title and summary written by the attorney general. (We discuss this issue in Point-of-View Discrimination, below.) While this was written for the petition, it is not likely it will get better for the ballot.
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT.The Legislature has put ACA 13 on the ballot in an attempt to increase the votes required to pass TPGAA and to restore advisory elections for cities and counties.
TPGAA Filing History
The brain-trust filed TPGAA in October 2021 (initiative 21-0026), in the middle of the plandemic. On November 5, 2021, still within the 30-day amendment window, it filed an amendment.
Still not satisfied with the language, the brain-trust restarted the process and made the second TPGAA filing in December 2021 (initiative 21-0042). Again within the 30-day window, it filed an amendment on January 4, 2022.
In the process, it lost more than two months. Instead of getting the circulating title and summary in November 2021, it finally got in on February 3, 2022. The delay made it almost certain that it would miss the deadline (June 30, 2022) for placing a statewide initiative by voter petition on the ballot for November 2022. The signature gathering was over by June 2022, but it was too late to get everything else that needed to be done accomplished.
The delay gave the natural opponents of TPGAA more than two years to organize against it. The League of California Cities alone mounted a huge propaganda campaign of its own over that time to get cities and officials on board against it. The Legislature were even able to mount a strategically-timed lawsuit against it in September 2023. Had the lawsuit succeeded (decision pending), the next opportunity to put a measure on the ballot would be in November 2026.
We have examined 21-0026, but will not analyze it or what was changed. It was about 25% shorter, page-wise. Much of the reduction in language was propaganda. Maybe that saved some petition printing costs. If the changes between 21-0026 and 21-0042 were worth making, why would anyone restart the process, knowing that it would sit out there as a target for two years? For the opponents, it was like shooting ducks in a barrel. The brain-trust mounted no obvious campaign to defend it. It just complained about misinformation or some other rot.
Reasons to Withdraw or Defeat the TPGAA
We are whole-heartedly against the passage of the TPGAA. While several of the purported solutions are worth the effort, the language of the measure itself oftentimes not only doesn't solve the problem, but also makes it worse.
One has to ask, since Howard Jarvis Taxpayers Association claims that it is the brains behind the TPGAA, why is it that HJTA can't get it right the first time around. Every few years, Proposition 13 (1978) and its progeny have to be "fixed." To hear HJTA's president spin it, it's because of the courts. As you will learn as you read our commentary, HJTA's lawyers often advanced indefensible legal theories or argued the wrong law. In the area of government law, the private bar, alongside their thousands of colleagues in the direct employ of the government, is captured by the government. Private lawyers can't make a dependable living suing the government. It's simple. The moms and pops who are the likely complainants don't have the financial resources to fight a mythical Hydra that feasts on the revenue it extracts from them.
If you understand how our courts work in our country, you will recognize that the courts only address the arguments that the parties make. If a party doesn't understand what the law is, a court is not going to help by giving a party legal advice. You'll see this in spades in the commentary about several of the precedential opinions that TPGAA is attempting to overturn.
Now, for the reasons against the TPGAA. You'll note that none of these reasons are policy issues.
- TPGAA will condemn local tax payers to perpetual tax slavery. With the legalization of local governments using public moneys to take sides in elections using a "ballot title and summary" that their marketing vendors can tweak to ensure passage, local measure elections will be become nothing more than pro forma exercises.
- TPGAA provides zero consequences for either state or local governments who decide to ignore it. A law without consequences is merely a suggestion. When the law is already on the books and the government ignores it, what good does it do to write new laws that the government can continue to ignore.
- TPGAA is extremely poorly drafted. Fixing its mistakes after it's part of the Constitution means the fixes will cost millions of dollars to qualify another measure and millions of dollars more for the campaign to get it passed.
- Changes to the Constitution can only be placed on the ballot at the general election in November every two years. That's a long time to wait to fix something that could be fixed by the Legislature at any time, if the language were in statutes.
- TPGAA does not live up to the propaganda of its proponents. The brain-trust has never provided any analysis of how specific parts of the TPGAA will fix specific problems.
- TPGAA's filing strategy was calculated to fail. The brain-trust knew when it re-filed TPGAA (initiative 21-0042) that it was impossible to meet the deadline for the November 2022 ballot.
- If TPGAA were to actually pass, the biggest winners would be the lawyers. The language is so bad (see Hanlon's Razor) that even if its opponents do not mount post-election challenges to all or part of the measure, tax payers will be in court forever attempting to get government compliance.
- TPGAA does not void any taxes or exempt charges. Despite its claim, the materials filed in response to the Legislature's lawsuit are admissions that not a single tax or exempt charge is certain to be voided.
- There is no consequence to the government for continuing to collect an allegedly void tax or exempt charge. Not to be repetitive, but why would a government do anything that TPGAA requires.
- Is the brain-trust really on the side of tax payers? In our documented experience over the past ten years, the history of some brain-trust members, is shaky, at best.
Lawyers make their livelihood by purporting to have the expertise to solve legal problems. At some point, they have a self-perpetuating interest in not fixing problems. Sometimes they may solve one problem, but create another. The same is true of organizations, especially those that need to raise money to fund their existence. Just this past week (at the time we were writing this), we learned that FreedoomWorks, a libertarian-leaning political action organization, closed its doors after about 15 years. It became irrelevant in the MAGA era.
Some organizations continue for many decades. Think the National Rifle Association. Think the American Civil Liberties Union. Think the hundreds of disease-curing (oxymoron) organizations. Do these organizations ever solve the problems? Of course not. After a period of time, the survival of the organization's bureaucracy becomes the primary purpose. If they actually solved the problem, they'd all be out of work. So, after 45 years, why hasn't HJTA solved the problem? HJTA hasn't even done a good job defending tax payers. But as long as there's a boogeyman, it can still raise the money to keep the lights on. As a non-profit, we can learn very little from its annual Form 990. Its internal operations and decisions are private. It chooses not to disclose anything that isn't required by law.
HJTA has a weekly podcast. On a recent episode, HJTA president describes three good reasons to withdraw a statewide measure: drafting errors (check), unintended consequences (check), or unusually powerful opposition (check). (What's On and Off Your November Ballot?, June 11, 2024, at 3:12.) We contend that all three reasons apply to TPGAA.
Below, we've reproduced the TPGAA. It's fixed in stone. Our commentary is inserted near the language on which we are commenting. Like this introduction, it is marked by the thick dashed box that surrounds it.
21-0042 Amdt. #1
[Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and underline.]
This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability Act.
(a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state politicians in 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes and fees.
(b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions more in hidden "fees" passed through to consumers in the price they pay for products, services, food, fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than doubled.
(c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and homelessness, they are the pushing working families and job-providing businesses out of the state. The most recent Census showed that California's population dropped for the first time in history, costing us a seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not counting thousands more small businesses that were forced to move, sell or close.
(d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 (2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and accountability, have been weakened and hamstrung by the Legislature, government lawyers, and the courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court decisions.
We get it. The courts are "hostile." And why shouldn't they be. Forty-two counties provide supplemental judicial benefits to their county judges. See
Sturgeon v. County of Los Angeles (2008) 167 Cal.App.4th 630 [Sturgeon I] ;Sturgeon v. County of Los Angeles (2010) 191 Cal.App.4th 344 [Sturgeon II] ; andSturgeon v. County of Los Angeles (2015) 242 Cal.App.4th 1437 [Sturgeon III] . That last opinion exposes how much money we're talking about. That was more than ten years ago. It ain't chump change.The lawyer that exposed this corruption spent 18 months in the Los Angeles County jail on a contempt ruling. Eventually, they made an example of him and disbarred him. Have the brain-trust members ever informed their clients?
Judges claim that they don't have to disclose this on their financial disclosure filing. So, the people don't realize that when they are in court against a local government or a local government interest, like taxes, the judge has an undisclosed conflict of interest.
Rather than complaining about it, why doesn't the brain-trust fix this fundamental issue?
(a) In enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees and other charges are passed or rejected by the voters themselves or a governing body elected by voters and not unelected and unaccountable bureaucrats.
(b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballot
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new or increased form of state government revenue, by any name or manner of extraction paid directly or indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the Governor to ensure that the purposes for such charges are broadly supported and transparently debated.
(d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that taxpayers have the right and ability to effectively balance new or increased taxes and other charges with the rapidly increasing costs Californians are already paying for housing, food, childcare, gasoline, energy, healthcare, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from such taxes remains local, without changing or superseding existing constitutional provisions contained in Section 1(c) of Article XIII A.
(e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two-thirds vote and voter approval requirements for government revenue increases created by the courts including, but not limited to,
Targeted Cases
Coalition v. City of Upland Chamber of Commerce v. Air Resources Board Schmeer v. Los Angeles County Johnson v. Cnty. of Mendocino Citizens Assn. of Sunset Beach v. Orange County Local Agency Formation Commission Wilde v. City of Dunsmuir In this comment, we will provide links to the cases and a short summary describing the issues before the court.
In general, one can't write a law that overturns or vitiates a court opinion. Since most court opinions are based on written law, the way to overturn a court opinion, at least in part, is to rewrite the law on which the opinion made its holding. So for each of these opinions that TPGAA wants to overturn, it must change specific language. We get no help in identifying that language from TPGAA.
Since there is no extant analysis of which provisions of TPGAA are intended to effectuate the closing of the loopholes in the named opinions, we will do our best to divine the provisions intended to accomplish the task.
Coalition v. City of Upland (2017) 3 Cal.5th 924 Local Measure: San Bernardino County, U, November 8, 2016. "Shall the voters approve an ordinance to allow operation of three medical marijuana businesses in the City of Upland?" Yes:10,745 (35.62%), No:19,419 (64.38%),
Court of Appeals opinion reviewed by Supreme Court.
Coalition proposed a fee
Lawyers: For City of Upland: Jonathan M. Coupal (Howard Jarvis Taxpayers Foundation, Sacramento), Trevor A. Grimm (Los Angeles), Timothy A. Bittle (Sacramento),and Brittany A. Sitzer; James R. Touchstone (Jones & Mayer) and Krista MacNevin Jee (Fullerton).
The judges are tricky devils. In
Coalition , id., at p. 217, the opinion speaks of "the initiative and referendum, not as a right granted the people, but as a power reserved by them." It then continues referring to the "powers" as "rights" repeatedly.
Coalition citesKennedy Wholesale, Inc. v. State Bd. of Equalization (1991) 53 Cal.3d 245 [challenging increase in tobacco taxes by Proposition 99 (1988)] to support the proposition that Art. XIII A, Sec. 3 does not limit the initiative power of Article II, Sec. 10. We couldn't agree more.Kennedy was a statewide initiative case. See reference to Buetner's Proposition 28 (2022) here.Kennedy is inapt because that issue was not before the court. The remarks were part of a historical review of Proposition 13 (Art. XIII A). If there is a theme to Proposition 7 (1911), it is that the "people" are the government and, inherently, have the Legislative power. Proposition 7 (1911) expressly reserved that power. Nowhere in Proposition 7 (1911) does it even hint that the people are above the law. In fact, ¶ 13 of Proposition 7 (1911) which "further reserved to the electors" of counties and cities, expressly stated: "Nothing contained in this section [Art. IV, Sec. 1] shall be construed as affecting or limiting the present or future powers of cities or cities and counties having charters adopted under the provisions of section eight of article eleven of this constitution."One question that
Coalition presumes without analysis is that a vote requirement is a limitation on the reserved initiative power. If vote requirement limits the power, what about limiting the underlying petition signers to only "qualified electors?" What about requiring "eight per cent of all the votes cast for all candidates for governor?"What about the modern restriction that limits statewide initiative petition measures to a general election ballot? According to the Secretary of State's History of California Initiatives page, "Prior to 1960, initiative measures appeared on general election ballots only. From 1960 to mid-2011, initiative measures appeared on primary, general, and special election ballots. As a result of Senate Bill 202 (Chapter 558, Statutes of 2011), from July 2011 forward, initiative measures once again only appear on general election ballots." Should we change our beloved former governor's nickname from "Moonbeam" to "Unconstitutional?"
What about the single subject rule and all the other limitations in Art. II, Sec. 8, that were completely absent in Proposition 7 (1911)?
The answer to these questions could be as easy as saying that the people themselves, through constitutional amendments can limit their powers or as easy as saying that these are merely procedures.
While the opinion in
Coalition refers to procedures, it doesn't even attempt to distinguish procedures from limits and restrictions. "By contrast, procedural requirements imposed on the Legislature or local governments are presumed not to apply to the initiative power absent evidence that such was the intended purpose of the requirements." The procedures authorized by Art. II, Sec. 11 for a city are contained in Article 1 of Chapter 3 of the Elections Code. These procedures are imposed directly on the people. Section 9217 provides the majority vote requirement. Just a few sections later, section 9222 provides that when the legislative body proposes an initiative, it is also subject to the majority vote requirement. The original procedures enacted by the Legislature granted cities a co-equal initiative power with the people, but "without a petition" requirement. Stats. 1911 Ex.Sess.1, ch. 33, p. 131.All county and city measures submitted to the voters under Division 9 of the Elections Code are initiatives. Reliance on
Kennedy for the constitutional "majority vote" requirement is inapt.Kennedy only applies to statewide initiatives, like Buetner's Proposition 28 (2022).If you were to read the original 1911 statute for cities, you would learn that the percentage of voter signatures on petitions was based on the previous vote for governor, just like it still is today for statewide initiatives in Art. II, Sec. 10.
Coalition , because the brain-trust only argued the Constitution, only uses language in the Constitution, comparing it to language in Proposition 218 (1996), also in the Constitution. It is self-evident that only the voters can add or remove language from the Constitution. Statutes, however, are, almost universally, enacted by the Legislature. A major point in this discussion is that if these powers (or rights) are so precious, how is it that Legislature or even the courts can limit them at the drop of a hat when the powers are exercised locally? IfGeiger can find "it is apparent" that the statewide rules apply to the exercise of the local powers, then most of the initiative and referendum provisions in Division 9 of Elections Code for counties and cities is in conflict with the Constitution. Unless, as we contend, the local exercise of the powers is actually in the hands of the Legislature (or charters) as theUnless the judges in
Coalition pretermitted the arguments we present here, we can reasonably chalk up the outcome of the case to poor lawyering. It would have taken work to go back to 1911 and bring forward the reserved powers to today. Along the way, contrary precedents would have turned up, likeGeiger .It's as if the lawyers only knew about their little corner of the law -- Proposition 13 (1978), Proposition 218 (1996), and Proposition 26 (2010). At a minimum, argument should have been made to force the court to address the distinction between a majority vote requirement in the constitution versus one in a statute.
Most of the opinion revolves around whether the city was required to hold a special election for the Coalition's initiative,
Because the court
Cal. Chamber of Commerce v. State Air Res. Bd. (2017) 10 Cal.App.5th 604 Local Measure: NONE
Court of Appeals opinion reviewed by Supreme Court.
Schmeer v. County of Los Angeles (2013) 213 Cal.App.4th 1310 Ordinance: Los Angeles County (unincorporated), No. 2010–0059, November 23, 2010.
Court of Appeals opinion on petition for writ of mandate.
The ordinance requires covered retailers to charge 10 cents for paper bags. Retailers keeps the proceeds. Challenged by consumers who were charged for paper bags. Basis for challenge was that under Article XIII C, Sec. 2 the charge is a tax.
Art. XIII C, Sec. 2(h) Art. XIII C, Sec. 1(i)Lawyers: For Schmeer: James R. Parrinello (Nielsen Merksamer Parrinello Gross & Leoni, San Rafael) Eric J. Miethke, Arthur G. Scotland, Sean P. Welch and Kurt R. Oneto (Sacramento). This is a firm that primarily represents local governments. It was behind Proposition 14 (2010) that gave California the "Top Two" primary and defended it in five separate lawsuits. Who's side is the firm on?
Issue: Schmeer argued that the charge that the county imposed on retailers to collect and keep was a tax and not a charge for services. The trial court held that it was not a tax because there was an exception "[a] charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege." The county successfully argued that "the paper carryout bag charge is not a tax because it is payable to and retained by the retail store and is not remitted to the county." The court also held that the exception that the lower court applied was inapplicable because the payment was not made to the county and did not add to county revenue.
Johnson v. Cnty. of Mendocino (2018) 25 Cal.App.5th 1017 Local Measure: Mendocino County, AI, November 8, 2016 and Mendocino County, AJ, November 8, 2016.
"Shall Chapter 6.32 be added to the Mendocino County Code, placing a business tax on cannabis cultivation and dispensaries (not to exceed 10% of gross receipts) and cannabis distribution, delivery, manufacturing, nurseries, testing laboratories and transportation businesses ($2,500.00 per year, to be adjusted in accordance with consumer price index increases) of medical and nonmedical cannabis where legalized by state law, potentially generating millions of dollars annually to help fund county services be approved?" Yes:22,375 (63.03%) No:13,121 (36.97%)
"(ADVISORY) If Mendocino County adopts business license taxes on cannabis businesses by the adoption of the measure adopting Chapter 6.32, Measure AI, should the County use a majority of that revenue for funding enforcement of marijuana regulations, enhanced mental health services, repair of county roads, and increase fire and emergency medical services? Yes:23,971 (68.54%) No:11,004 (31.46%)Court of Appeals opinion. Supreme Court denied review.
Measure AI was a general tax of the cannabis business tax type.
Shall Chapter 6.32 be added to the Mendocino County Code, placing a business tax on cannabis cultivation and dispensaries (not to exceed 10% of gross receipts) and cannabis distribution, delivery, manufacturing, nurseries, testing laboratories and transportation businesses ($2,500.00 per year, to be adjusted in accordance with Consumer Price Index increases) of medical and nonmedical cannabis where legalized by state law, potentially generating millions of dollars annually to help fund County services?Measure AJ was an advisory election that asked how the revenue should be allocated.
Advisory Vote Only. If Mendocino County adopts business license taxes on cannabis businesses by the adoption of the measure adopting Chapter 6.32, Measure AI, should the County use the majority of that revenue for funding enforcement of marijuana regulations, enhanced mental health services, repair of county roads, and increased fire and emergency medical services?Issue: Johnson argued that combining an advisory election with a measure for a general tax, where the advisory election hinted that the revenue might be used for specific purposes, turned the measure into a special tax requiring a two-thirds majority for passage.
Johnson Opinion Analysis.
This is a common trick used by local governments to pass a special purpose tax measure, under the guise of a general tax by pairing it with an advisory election. The tax payers pay for both elections. The Supreme Court had previously determined, in a limited context (federal constitutional amendments), that advisory elections were legal, despite the potential for abuse laid out in a well-reasoned dissent.
Howard Jarvis Taxpayers Assn. v. Padilla (2016) 62 Cal.4th 486 . No court has considered that advisory elections that relate to one or more measures on the same ballot are a form of the government taking sides in an election (the measure election) using public moneys.In
Padilla , the brain-trust lawyers argued that the Legislature does not have the constitutional authority to place an advisory question on the ballot. The advisory election was Proposition 49 (2014), which had earlier been barred from the ballot by a previous decision. Proposition 49 (2014) read:"Shall the Congress of the United States propose, and the California Legislature ratify, an amendment or amendments to the United States Constitution to overturnCitizens United v. Federal Election Commission (2010) 558 U.S. 310 130 S.Ct. 876, 175 L.Ed.2d 753 , and other applicable judicial precedents, to allow the full regulation or limitation of campaign contributions and spending, to ensure that all citizens, regardless of wealth, may express their views to one another, and to make clear that the rights protected by the United States Constitution are the rights of natural persons only?"The opinion held that such a question was within the implicit (not express) legislative power to investigate. The opinion rejected all four arguments by the brain-trust.
The brain-trust was going for broke in trying to bar any advisory election. The opinion, however, went further and held that "Proposition 49 is a reasonable and lawful means of assisting the Legislature in the discharge of its article V-related functions." The brain-trust, apparently, raised no arguments on this aspect.
Citizens United was a politically charged decision in the context of federal campaign finance. The lengthy question was clearly partisan in its language to favor the government's favored outcome, a yes vote. The Legislature used public moneys up to the point Proposition 49 was barred and had it not been barred would have used public moneys to conduct the proposed advisory election. The opinion, in effect, condoned the use of public moneys to allow the government to take sides in an election, despite an entire line of cases prohibiting it. To this day, there are no rules on the ballot label language of an advisory election by the Legislature. For local governing bodies, Elections Code section 9603, similarly, provides no rules for the language on the ballot label.THe brain-trust
Citizens Assn. of Sunset Beach v. Orange County Local Agency Formation Commission (2013) 209 Cal.App.4th 1182 Lawyers: For Sunset Beach: Trevor A. Grimm, Los Angeles (Howard Jarvis Taxpayers Foundation, Sacramento), Jonathan M. Coupal and Timothy A. Bittle, Sacramento.
Issue: Huntington Beach annexed Sunset Beach as an island annexation, without a vote of the annexed residents. Sunset Beach residents were now obligated to pay two new taxes: 1) a utility users tax, and 2) a retirement property tax. Sunset Beach argued that Proposition 218 required a vote on the two taxes before the taxes could be imposed.
Holding: "Proposition 218 was never intended to require votes incident to annexations of territory by local governments."
Sunset Beach Opinion Analysis.This case involved a really complex set of facts.
Much of the opinion involves the brain-trust argument that Proposition 218's voter approval of taxes applied to annexations. A consequence of that argument was that several annexation statutes would be repealed by implication.
To illustrate the absence of research by the brain-trust, it argued that island annexations were only introduced by the Legislature in 2000, after Proposition 218 was adopted. As the opinion points out, this wasn't true as island annexation legislation goes back to 1939.
The opinion went on to discuss the language ("impose, extend, or increase") used by Proposition 218 that triggers the vote requirement. After examining the meanings of each of the trigger words, the opinion reaches its "hostile" holding.
Sunset Beach TPGAA Analysis.It's fairly clear that TPGAA intends to overturn
Sunset Beach by the addition of a definition in Section 1 of Article XIII C.(d) "Impose" means adopt, enact, reenact, create, establish. collect, increase, or extend.Here are the instances that TPGAA uses the new term, "impose."
(a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor. and (ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including. but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product.(c) "General tax" means any tax imposed for general governmental purposes.(h) "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.(i) As used in this article, and in Section 9 of Article II, "tax" means every levy, charge, or exaction of any kind, imposed by a local law that is not an exempt charge.(l)(4) A fine, or penalty, including any applicable interest for nonpayment thereof, imposed by the judicial branch of government or a local government administrative enforcement agency pursuant to adjudicatory due process, to punish a violation of law.(l)(5) A charge imposed as a condition of property development. No levy, charge, or exaction regulating or related to vehicle miles traveled may be imposed as a condition of property development or occupancy.(l)(6) An assessment, fee, or charge subject to Article XIII D, or an assessment imposed upon a business in a tourism marketing district, a parking and business improvement area, or a property and business improvement district.(l)(7) A charge imposed for a specific health care service provided directly to the payor and that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the health care service. As used in this paragraph, a "health care service" means a service licensed or exempt from licensure by the state pursuant to Chapters 1.1.3, or 2 of Division 2 of the Health and Safety Code.Does anyone think there won't be some unintended consequences of all this. We find especially interesting subdivision (i) which changes the definition of "tax" for the already-restricted statewide referendum power, but not for Art. II, Sec. 11, which has no restrictions. (We discuss this further in the discussion of
Coalition and in the separate article on Proposition 7 (1911).Here's the context of Art. II, Sec. 9: "(a) The referendum is the power of the electors to approve or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State."
The Nibiru effect, thus, changes the meaning of an adjective to that of a noun. Let's go back even one step further. TPGAA's "tax" is a noun. In Art. II, Sec. 9, it's an adjective modifying the noun "levies." Levy is a synonym for tax, whether used as a noun or as a verb. "Tax levies" to not be redundant implies that there are levies that are not also taxes.
We're going deep here, because it illustrates one of the problems with TPGAA. TPGAA's "tax" is based on set theory. As TGPAA attempts to describe this the set of all government action is a set of things called taxes. Then it carves out a subset of taxes and calls those things exempt charges. What the set "taxes" doesn't include are the things that are excluded from exempt charges.
Maybe we're wrong, but doesn't this mean that TPGAA has just greatly expanded the exceptions for a statewide referendum?
Let's also look more closely at the exclusionary language for statewide referendums. It "excepts" a comma-delimited list of three (or is if four?) types of "statutes" -- urgency, elections, "statutes providing for tax levies or appropriations for usual current expenses of the State." The conjunction for the list is clearly "and." After that it gets blurry. Does "statutes providing for" refer to both "tax levies" and "appropriations?" Does "for usual current expenses of the State" refer to both "tax levies" and "appropriations?" We're not going to answer these questions. They have been raised by others.
Here is our take on the
Coalition opinion's requirement, however "hostile," that a limitation on a reserved power of the people must be express, not inferred.If TPGAA's intent to "to close loopholes and reverse hostile court decisions" like
Wilde is implemented by changing the meaning of tax in the statewide referendum restrictions, it certainly doesn't apply to local referendums likeWilde . There is another problem that this definition change doesn't address. InCoalition , the court's new "rule" on the reserved powers, although it was only discussing the initiative power, is that the intent must be clearly expressed. The majority even suggested the language what would clarify the voters' intent.Moreover, had the voters wanted the procedural requirements contained in article XIII C, section 2, subdivision (b) to apply to the initiative power, Proposition 218 could have made that clear by providing, "No local government or initiative may impose, extend, or increase ...," by defining local government to include the electorate exercising its initiative power, or by imposing an absolute ban, i.e., "No general tax shall be imposed, extended, or increased...." (See Kennedy Wholesale , at p. 253, 279 Cal.Rptr. 325, 806 P.2d 1360 [discussing similar language in Cal. Const., art. XIII A, § 1, subd. (a)].) The voters did not do so, and we will not infer such a purpose. (Rossi, supra, 9 Cal.4th at p. 694, 38 Cal.Rptr.2d 363, 889 P.2d 557; Kennedy Wholesale, at p. 252, 279 Cal.Rptr. 325, 806 P.2d 1360 ["'Where the electorate has demonstrated the ability to make their intent clear, it is not the province of this court to imply an intent left unexpressed'"].) Particularly because, given that article XIII C was enacted via initiative constitutional amendment, its enactors were certainly well aware of the initiative power. (Lance W., supra, 37 Cal.3d at p. 890, fn. 11, 210 Cal.Rptr. 631, 694 P.2d 744.)Id., at pp. 943-44
Of course, when this opinion refers to the voters or the electorate, it presumes that the voters are acting like a legislature and that they know what they intend. In real life, the voters are not able to add anything to an initiative. It's a yes or no proposition. But if Coalition is the way that the courts will look at language, we see nothing in TPGAA that expressly effects either the statewide electors' power of referendum or the local electors of power of referendum. In fact, there is not a single occurrence of the word referendum in TPGAA. How express is that?
This is a kind of ham-fisted approach to deal with the problem which is actually embedded into the structure of Proposition 218. It's like Proposition 218 is a star in its own universe that attempts to exert a gravitational pull on several different universes that are not identified anywhere. It's sort of like the planet Nibiru.
It still doesn't deal with the other aspect of the opinion -- the repeal of statutes by implication.
Even if TPGAA were to pass, we can't imagine any local government voluntarily examining a proposed action and trying to divine in any kind of rational way whether Proposition 3[TBD] (2024) has exerted its influence to magically repeal competing statutes strewn throughout all the codes. Consequently, TPGAA keeps the revenue coming in for the lawyers who profit off this stuff. As Randolph Duke told Billy Ray, it's all good.
Maybe the brain-trust could sue to have the Secretary of State assign the number 218 to TPGAA. After all, the governor was able to get his pet project assigned the number 1 for last March's election. Rules are made to be broken, or so they say.
Wilde v. City of Dunsmuir (2020) S252915 Issue: Is a resolution establishing city water rates for a city-run water system subject to referendum?
Lawyers: For Wilde: Jonathan M. Coupal (Howard Jarvis Taxpayers Foundation, Sacramento), Trevor A. Grimm, Timothy A. Bittle, Laura E. Dougherty.
Like the Upland case, blaming the courts for the incompetence of the lawyers arguing the case, is beyond the pale. This was a referendum case, not a tax case. But when all you know about is a hammer, everything looks like a nail.
The plain language of the Constitution specifically sets out the referendum power and initiative powers as applicable only to the state. Art. IV, Sec. 1 calls these "reserved powers" against, wait for it, the Legislature.
We recommend that you read this separate analysis of Reserved Powers of the People: Initiative and Referendum for a more in depth analysis of why
Wilde was a case of bad lawyering.Nevertheless, the Supreme Court didn't even wiggle around on this one. The opening paragraph of the opinion
The California Constitution grants voters the power of referendum, which allows them to approve or reject laws enacted by their elected representatives before the laws take effect. But to prevent the referendum process from disrupting essential governmental operations, the Constitution exempts certain categories of legislation, including "statutes providing for tax levies or appropriations for usual current expenses" of the government. (Cal. Const., art. II, § 9, subd. (a).) The question in this case is whether this exemption applies to measures setting municipal water rates. We conclude the answer is yes. Municipal water rates and other local utility charges may be challenged by other means, but they are not subject to referendum.Notice the quote from the Constitution, above, that begins with the word "statutes." That's right, Art. II, Sec. 9 applies only to statutes enacted by the Legislature. "Statute" is used eight times in the section; ordinance zero times. Other clues are that "Legislature" is used three times, "Secretary of State" is used twice, and "Governor is used three times. The Court never discusses any of this because the lawyers didn't raise it. We're well aware that on appeal, courts will, generally, only consider arguments that were raised in the trial court, so it may be that the trial court lawyers are primarily responsible. The question then becomes why didn't the lawyers who took the case to the court of appeals and the supreme court stop while they were behind? Why did they risk an adverse precedential opinion?
But it wasn't Ms. Wilde's lawyers that were raising the Art. II, Sec. 9 argument. It was Dunsmuir's lawyers. So all Wilde's lawyers had to do is read the language and argue that Art. II, Sec. 9 only applied to statutes. They didn't.
The lawyers arguing for Ms. Wilde, couldn't get over their obsession with Proposition 13 (1978), Proposition 218 (1996), and Proposition 26 (2010), just like TPGAA drafters.
The court stated: "Like the initiative power, the referendum power applies to both state statutes and local enactments", citing and quoting Art. II, Sec. 11(a). The lawyers didn't argue that the powers of Art. II, Sec. 9. are different from the powers in Art, II, Sec. 11.
When the Court said that "The referendum power is, however, subject to certain exceptions. These exceptions are spelled out in article II, section 9," where were Ms. Wilde's lawyers arguing that those exceptions only apply to statutes. Where were they arguing that referendum powers for local governments are different? Where were they arguing that Elections Code 9235 provides the only exceptions for general law city referendums? They were arguing Proposition 13, Proposition 218, and Proposition 26.
By the time it got
Sec. 3(a) Every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt charge.
Commentary on TPGAA Section 3(a).
"Let's start at the very beginning, a very good place to start. ..."
Sounds good, doesn't it? You have to go down to "tax" and "exempt charge" to understand this fully. The language is quite awkward. The problem is, as the courts regularly point out, is that "tax" is not a term with a fixed definition. The drafters make an attempt to define "tax" as everything except an "exempt charge." However, throughout TPGAA, the drafters use "tax" in specific contexts that tend to undermine the definition. Consider subparagraph (b), immediately below. It uses "taxpayer," "higher tax," "ad valorem taxes," and "sales or transaction taxes" (which are two different kinds of taxes). We don't have an easy solution to this conundrum. In many places, TPGAA refers to a "payor." We haven't consulted the Revenue and Taxation Code for terminology. However, "payers" or "payors" are those who make payments. Since all government agencies are exempt from paying taxes, they would never be a "tax payer" ("taxpayer" is really the domain of the Internal Revenue Code (Title 26)). Businesses, for those who have any clue about economics, are not "tax payers." At best, a "tax" on a business is a cost of doing business. As such, businesses (who are not charities) pass all their costs onto the ultimate user of their product or service. Only individuals (the People), therefore, actually pay taxes.
That's enough on that topic. Our goal is not to rewrite TPGAA, but to kill it.
Nevertheless, the statement in subparagraph (a) is not true, because there are either exceptions or exemptions to both "tax" and "exempt charge." The proponent likes to call these loopholes. Some of the loopholes that TPGAA does not address are huge.
We fully understand that sometimes there are tradeoffs in order to get something passed. However, the voters, who are the audience for TPGAA will not have a clue as to what's in it by reading it. Instead, the voters will get propaganda from both the proponents and the opponents. In our estimation, TPGAA could have fixed the massive loopholes. It didn't. We don't know why.
(b)(1) (a) Any change in state statute law 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. Each Act shall include:
(A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected to be derived from the tax.
(B) A specific and legally binding and enforceable limitation on how the revenue from the tax can be spent. If the revenue from the tax can be spent for unrestricted general revenue purposes, then a statement that the tax revenue can be spent for "unrestricted general revenue purposes" shall be included in a separate, stand-alone section. Any proposed change to the use of the revenue from the tax shall be adopted by a separate act that is 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.
Commentary on TPGAA Section 3(b)(1).
Subparagraph (b)(1) applies to the enactment. An "Act" consists of sections. Some sections do not change either a statute or the Constitution. While Subparagraph (b)(2) expressly includes acts by voter petition, this subparagraph does not. It probably doesn't matter.
We mention Austin Buetner's Proposition 28 (2022) elsewhere. It did cause some high-income individuals to pay a new or higher tax, but it wasn't submitted to the voters by the Legislature. The and those of Article XIII A. The courts are the proper place to resolve the conflict between two competing constitutional provisions. For example, the statewide school art and music initiative special tax measure -- Proposition 28 (2022) -- proposed by Austin Buetner. At 64.40% voter approval, it didn't quite make the two-thirds requirement of Article XIII A
TPGAA makes a big change in that acts that by must be enacted by the Legislature. How many acts of the Legislature in any given session actually impose a new or higher tax or exempt charge? Are any taxpayer organizations following all those acts and working against them? Austin
This section also dictates to the Legislature what it must include in its acts. Does that give the Legislature a mandatory ministerial that it must comply with? How does TPGAA enforce these requirements?
(2) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall, for each measure providing for the imposition of a tax, including a measure proposed by an elector pursuant to Article II, include:
(A) The type and amount or rate of the tax;
(B) The duration of the tax; and
(C) The use of the revenue derived from the tax.
Commentary on TPGAA Section 3(b)(2).
Subparagraph (b)(2) applies to, presumptively, the ballot title and summary. The first question the language raises is why is it so vague? Does it really need to mention the Elections Code, which the Legislature can change at will?
By its section, section 3, and by all the language of section 3 surrounding it, it applies only to statewide measures. While the courts have held, as mentioned in another section of this paper, that the Legislature doesn't need an enabling statute to put a question on the ballot, it is very rare. Some questions are set out by the Constitution, like the one about calling a constitutional convention. A question is not an "Act" and it is not a "measure." It's advisory. Therefore, it can never adopt a tax. We're not sure if "question" refers to investigative questions by the Legislature or the dictionary meaning of anything that is in the form of a question. Going back to basic grammar, that would an interrogatory sentence ending with a question mark.
The conditional clause, "for each measure providing for the imposition of a tax," comes in the middle of the sentence. So a reader starts off thinking it's for "all" measures and then learns that it's only for taxes. Taxes by whom? It doesn't mention the Legislature, but it does mention an elector.
The target of these rules are "title and summary and ballot label or question." It is two "and's" and an "or" strung together as if the brain-trust is trying to put in some kind of catch-all language. For many years, all statewide measures have been statements, not questions, even though voters check a Yes or No box, except in the case of the new rules for referenda that were just enacted which we discuss elsewhere.
Speaking of referenda, can a referendum impose a tax? Considering that most "Acts" of the Legislature are subject to referenda, they do not go into effect for 90 days, initially, but if a referendum qualifies for the ballot, the Act is in suspense until the voters vote on the referendum. That could easily be up to two years. So, if the Legislature or an elector puts a tax measure on the ballot and it passes, the measure may be subject to the rules, but it appears that a referendum against it is not.
So the brain-trust didn't take the advice of court in
Coalition where it advised, speaking about the parallel provision for local governments that "to apply to the initiative power, Proposition 218 could have made that clear by providing, "No local government or initiative may impose, extend, or increase ..."" We suppose the brain-trust knows better what TPGAA is about.Considering that the brain-trust is so worried about referenda, one would think TPGAA would have addressed it.
But let's look at the three rules, or maybe more than three. In rule A, TPGAA uses mixed conjunctions again with "type and amount or rate." That's twice in this one section. Why? Could the brain-trust have been clearer? Or is this intentional so that Duke & Duke gets its cut?
Rule B is that "duration" thing again. In
Legislature v. Weber (Hiltachk) , we learn that the brain-trust will accept just about anything for "duration," so why is it even there. And the good-ole "until ended by voters" is so meaningless, it makes us want to gag.Rule C requires use of revenue to be printed on the ballot. Does this mean all the uses? Is it trying to determine whether it's a special tax for special purposes or a general tax? We're not mind-readers, and neither are the judges.
But the really big issue is what happens if the Legislature or the elector just ignore the rules? Oh, that's right, the tax is void, right? Nope. That language only applies to taxes enacted in 2022 up through the passage of TPGAA.
So, incredibly, there is no consequence in the entirety of TPGAA Section 4 for just ignoring it.
Sure, the law firm of Duke & Duke can get rich by bringing lawsuits, but to what end? The lawsuits will drag out for years, considering appeals. What happens at the end of the lawsuits, if perchance the brain-trust lawyers win? What happened to the tax for all those years? Was it being collected? Was it subject to a stay or an injunction? The legal possibilities are mind-numbing, but the bottom line is that TPGAA doesn't help at all in figuring it out.
What we contend would happen is that at some point along the way, a court is going to consider the lawsuit moot because the government took some action that the brain-trust couldn't stop, like collecting the money, or more moot-rendering, spending the money. Is the brain-trust going to go after disgorgement? From who? Does the money go back to the people who actually paid the tax? Or does the state get to take it from one of its pockets and put it in another?
To end this discussion, let's consider statewide measures that authorize the issuance of bonds, like the one, you know, Proposition 1 (because it was so important that it didn't have the follow the rules for numbering propositions). That measure authorized the issuance of bonds that will be repaid with taxes. Our question is it a tax under TPGAA?
AUTHORIZES $6.38 BILLION IN BONDS TO BUILD MENTAL HEALTH TREATMENT FACILITIES FOR THOSE WITH MENTAL HEALTH AND SUBSTANCE USE CHALLENGES; PROVIDES HOUSING FOR THE HOMELESS. LEGISLATIVE STATUTE. Amends Mental Health Services Act to provide additional behavioral health services.We contend that it is a not a tax and therefore not subject to TPGAA. The section starts off by saying that every levy, charge, or exaction is either a tax or an exempt charge. It's not any of those. How will be repaid? The Legislature will rob money from some accounts and put the money in other accounts to pay of the bonds over 40 years. The point is that no "taxpayer" will pay a new or higher tax because the bonds will be paid off from existing taxes. It's just a change in how expenditures are made.
Remember the High Speed Rail (Bullet Train) proposition? That wasn't a tax either. The brain-trust loves to demonize it because it's going to cost a couple hundred billion for a train that goes from nowhere that people travel from to nowhere that people travel to. And there's no way to "legally" enforce the original promise that voters' said yes to. None of the language in this entire section would apply to the High Speed Rail proposition.
We challenge the brain-trust to find any proposition in their living memory to which this section would apply? How about since 1996 when the first incarnation of Proposition 218 passed?
(c) Any change in state law which results in any taxpayer paying a new or higher exempt charge must be imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of exempt charge as provided in subdivision (e), and the amount or rate of the exempt charge to be imposed.
(d) (b) As used in this section and in Section 9 of Article II, "tax" means every any levy, charge, or exaction of any kind imposed by the State state law that is not an exempt charge. except the following:
(e) As used in this section, "exempt charge" means only the following:
(1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of conferring the benefit or granting the privilege to the payor.
(1) (2) A reasonable charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable actual costs to the State of providing the service or product to the payor.
(2) (3) A charge imposed for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.
(3) A levy, charge, or exaction collected from local units of government, health care providers or health care service plans that is primarily used by the State of California for the purposes of increasing reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily used to finance the non-federal portion of Medi-Cal medical assistance expenditures.
(4) A reasonable charge imposed for entrance to or use of state property, or the purchase, rental, or lease of state property, except charges governed by Section 15 of Article XI.
(5) A fine, or penalty, or other monetary charge including any applicable interest for nonpayment thereof, imposed by the judicial branch of government or the State, as a result of a state administrative enforcement agency pursuant to adjudicatory due process, to punish a violation of law.
(6) A levy, charge, assessment, or exaction collected for the promotion of California tourism pursuant to Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code.
(f) (c) Any tax or exempt charge adopted after January 1, 2022 2010, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted by the legislature and signed into law by the Governor in compliance with the requirements of this section.
(g)(1) (d) The State bears the burden of proving by a preponderance of the clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. , that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity
(2) The retention of revenue by or the payment to a non-governmental entity of a levy, charge, or exaction of any kind imposed by state law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.
(3) The characterization of a levy, charge, or exaction of any kind as being voluntary, or paid in exchange for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the levy, charge, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.
(h) As used in this section:
(1) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor, and (ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including. but not limited to taxes, other exempt charges, grants. and state or federal funds received to provide such service or product.
(2) "Extend" includes. but is not limited to, doing any of the following with respect to a tax or exempt charge: lengthening its duration, delaying or eliminating its expiration, expanding its application to a new territory or class of payor, or expanding the base to which its rate is applied.
(3) "Impose" means adopt, enact, reenact. create, establish, collect, increase or extend.
(4) "State law" includes, but is not limited to, any state statute, state regulation, state executive order, state resolution, state ruling, state opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by the legislative or executive branches of state government. "State law" does not include actions taken by the Regents of the University of California, Trustees of the California State University, or the Board of Governors of the California Community Colleges.
Commentary on TPGAA Section 5 (Art. XIII C, Sec. 1).
Section 9 of Article II is expressly limited to statutes enacted by the Legislature. "Tax levies" and the whole discussion of the definition of a tax, such as that which the court used in
Wilde is totally irrelevant. Why didn't the lawyers representingWilde make that clear distinction? Incompetence? Not being able to read plain language? The powers of referendum (Section 9) and initiative (Section 10) are powers reserved vis-a-vis the state. Those are not the same as the powers provided for in Section 11 -- "(a) Initiative and referendum powers may be exercised by the electors of each city or county under procedures that the Legislature shall provide." Those powers are enabled by the Legislature in the Elections Code, primarily, in Division 9.The whole discussion in
Wilde is off-point. It equates the state's taxing power with that of counties, cities, and districts."Referendum" is used 97 times in Division 9 (including titles); 52 times in Chapter 1. Chapter 2 provides the referendum power against an "ordinance" for counties. Chapter 3, against an "ordinance," for cities. Chapter 4, against an "ordinance," for districts meeting the requirements of Section 9300 in the same manner as for counties. Section 9235 (cities) provides a much different list of exceptions to the referendum power. Water rates, as in
Wilde , is not one of them.TAKE AWAY: TPGAA, by reference, now embeds in the Constitution, arguably, state-level-only restrictions on local tax payers. In our opinion, this is the result of sloppy, stingy, or uninformed drafting. The rules for the state are completely different than those for local governments. Had the lawyers in
Wilde , argued section 9235, instead of Art. II, Sec. 9, Wilde's referendum would have had to have been allowed.
Sec. 1. Definitions. As used in this article:
(a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor. and (ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including. but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product.
(b) "Extend" includes. but is not limited to. doing any of the following with respect to a tax, exempt charge, or Article XIII D assessment, fee, or charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new territory or class of payor. or expanding the base to which its rate is applied.
(c) (a) "General tax" means any tax imposed for general governmental purposes.
(d) "Impose" means adopt, enact, reenact, create, establish. collect, increase, or extend.
(e) (b) "Local government" means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity, or an elector pursuant to Article II or the initiative power provided by a charter or statute.
(f) "Local law" includes, but is not limited to, any ordinance, resolution, regulation, ruling, opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local government.
(g) (c) "Special district" means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies.
(h) (d) "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.
(i) (e) As used in this article, and in Section 9 of Article II, "tax" means every any levy, charge, or exaction of any kind, imposed by a local government law that is not an exempt charge., except the following:
As used in this section, "exempt charge" means only the following:
(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.
(1) (2) A reasonable charge imposed for a specific local government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable actual costs to the local government of providing the service or product.
Commentary on TPGAA Section 5 (Art. XIII C, Sec. 1(i)(1)).
Let's look at this language in the context of the paper bags case (
Schmeer ). TPGAA removes all the language regarding benefit or privilege. TheSchmeer opinion held that the exception applied only when payments were made to the local government. Therefore removing the exception language would make no difference.TPGAA adds "reasonable" and "local" and strikes "imposed" from the current language. It also changes "reasonable" to "actual." The phrase "for a specific government service or product" remains unchanged except for modifying "government" with "local." Was that really needed since the entire section only applies to local governments? But "local government" is a defined term in this section, it kind of makes sense. But then why didn't TPGAA change all the uses of unmodified "government" to "local government" throughout the section?
Put your grammar hat on. Remember grammar? Does "a specific local government" modify only "service", or does it also modify "product?" Reasonably, the phrase could be read "for a specific (local government service) or (product)," where "a specific" modifies both "local government service" and "product." We could argue governments don't produce products, like paper bags, so a "local government product" has no meaning.
However, there is more language in this subparagraph at the very end that says "local government of providing the service or product." From that context, it appears that our analysis above may be faulty. This language implies that local governments provide both services and products. If the exempt charge term only applies to "local government products," then it does not apply to products provided by private businesses. You know, products like paper bags at businesses that sell things that customers want to carry out in a bag. So, our revised analysis is that an "exempt charge" does not apply to the paper bags. So, therefore, it is tax.
But if forcing businesses to collect a charge is a tax, isn't almost anything a local government does that requires someone not in government to do something a tax?
(2) (3) A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.
(3) (4) A reasonable charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.
(4) (5) A fine, or penalty, or other monetary charge including any applicable interest for nonpayment thereof, imposed by the judicial branch of government or a local government administrative enforcement agency pursuant to adjudicatory due process, as a result of to punish a violation of law.
(5) (6) A charge imposed as a condition of property development. No levy, charge, or exaction regulating or related to vehicle miles traveled may be imposed as a condition of property development or occupancy.
(6) (7) An Assessments and property related fees assessment, fee, or charge imposed in accordance with the provisions of subject to Article XIII D, or an assessment imposed upon a business in a tourism marketing district, a parking and business improvement area, or a property and business improvement district.
Commentary on TPGAA Section 5 (Art. XIII C, Sec. 1(i)(6)).
Aside from the destruction of Elections Code 13119, this is the biggest disappointment (or deception) that TPGAA does not address. It still exempts, all the Art. XIII D assessments, fees, and charges. Art. XIII D is, in large part, about local government services incidental to property ownership.
As you will learn below, Section 7, TPGAA still totally excludes electric and gas from any voter approval. Will Californians forever be subject to the "carbon taxes" imposed by the California Air Resources Board via the California Public Utilities Commission? When did the voters approve that tax?
Specifically, Art. XIII D, Sec. 6, applies to "Property Related Fees and Charges." However, "fees or charges for sewer, water, and refuse collection services" are expressly excepted from voter approval by subparagraph (c). So what do local governments do? They either 1) embed the tax into the rates, or 2) contract for the service with a provider for rates which embed the taxes into the rates. Water rates are typically composed of a base rate on the connection and metered usage, similar to electric and gas rates. Refuse collection rates, however, are flat within a category. The CalRecycle three-bin (and now pseudo-fourth-bin) solution is imposed on almost all residential properties. The charge for weekly service is uniform and unhinged from the actual type or amount of refuse collected. So a 90-year-old widow pays the same rate as a group of unrelated people occupying the residence next door or the people moving in or moving out who add to the total tonnage. In other words, low-volume rate payers are subsidizing high-volume rate payers. And the three-or-four-bin CalRecycle solution has been imposed, like a tax for decades under CalRecycle.
Art. XIII D provides limits and procedures for assessments and property-related fees and charges. TPGAA amends only of Art. XIII D, Sec. 3.
Art. XIII D, Sec. 5(a), exempts "Any assessment imposed exclusively to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control." Let's focus on water. The Legislature has already enacted laws that limit your use of water and imposes fines for exceeding those limits. (CITE). The enforcement hasn't been implemented because the Legislature differentiated between indoor water use and outdoor water use. Since existing residential water providers typically distribute the water through a single meter, there is no way to distinguish between indoor and outdoor use. So the Legislature has used an unfunded state mandate that requires water providers to install dual meters in order to implement the penalty provisions of the law. It was unfunded because the Legislature reasoned that the water providers could recoup the costs by increasing water rates. In our view that unfunded mandate is a tax. It has nothing to do with the cost of delivering water. It has everything to do with a state policy to harass water uses (that's all of us). In our view, but for exemption Art. XIII D charges, it would be a tax.
It's not just water. It's also refuse collection. If you hadn't noticed, you have been a slave to the Legislature's refuse reduction policy for the past 35 years or so. The state is making you use your time and labor to separate your refuse. The propaganda, of course, is that you are saving the planet. Beginning on January 1, 2022, CalRecycle, after rewriting the definitions in the statutes (http://refusebucket.blogspot.com/), imposed more slavery. Now, everyone (really, only the hoi polloi, the wealthy can afford the fines, just like the water fines) is required to separate food waste from the other organic refuse. CalRecycle regulations on refuse collectors and local governments to enforce the policy. Your local government has already written ordinances that will fine you for not separating your food waste. It hasn't been enforced yet, but just wait until next year.
Of course, CalRecycle's forced use of property (time and labor) violates both the federal and state constitutions, but those are just pieces of paper. Now you are a compost slave. You've been a trash slave for years. Enforcement of servitude is just over the horizon.
The result of CalCycle's cultish religion is that your refuse collection rates went up, either directly by your local government or indirectly by contracts with the refuse collectors. Why doesn't TPGAA protect us from this clear tax that is not an exempt charge. If the Legislature wants to implement their policies, they should also have to pay for them, don't you think? Instead, we're paying for them, by design.
Related to the water and refuse collection and other third-party (indirect) government service bills is the franchise fees. When your local government wants more tax revenue, they can also get it through franchise fees imposed on the providers. Like all businesses, providers never pay those franchise fees, they just pass them on to their customers -- you.
Then there is the California Public Utilities Commission which regulates (taxes) you through utility rates. Why doesn't TPGAA address this elephant in the room? Electric and gas rates are the highest in the country. The rate increases are authorized because the utilities pass through the policy mandates in the form of higher rates.
And finally, there is the California Air Resources Board which implements and enforces the policies that drive up the cost of just about everything. Those costs are the result of policy mandates that end up embedded in the prices of everything you purchase. This is not 1978. None of these agencies were ever intended to be taxing agencies. It's never going to end.
(7) A charge imposed for a specific health care service provided directly to the payor and that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the health care service. As used in this paragraph, a "health care service" means a service licensed or exempt from licensure by the state pursuant to Chapters 1.1.3, or 2 of Division 2 of the Health and Safety Code.
The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity.
Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) Every levy, charge, or exaction of any kind imposed by local law is either a tax or an exempt charge. All taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes.
(b) No local law government, whether proposed by the governing body or by an elector, may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body.
(c) Any general tax imposed, extended, or increased, without voter approval, by any local government on or after January 1, 1995, and prior to the effective date of this article, shall continue to be imposed only if approved by a majority vote of the voters voting in an election on the issue of the imposition, which election shall be held within two years of the effective date of this article and in compliance with subdivision (b). (d) No local law government, whether proposed by the governing body or by an elector, may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved.
(d) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall, for each measure providing for the imposition of a tax, include:
(1) The type and amount or rate of the tax;
(2) the duration of the tax; and
(3) The use of the revenue derived from the tax. If the proposed tax is a general tax, the phrase "for general government use" shall be required, and no advisory measure may appear on the same ballot that would indicate that the revenue from the general tax will, could, or should be used for a specific purpose.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(d)).
First off, the entirety of subparagraph (d) does not belong in the Constitution. It belongs in the Elections Code where it is now at Section 13119. Why? Maybe because the Constitution is not the place to look for details. Maybe because anyone reading Section 13119 or Section 9603 will have no idea that they need to look for more details in the Constitution. Maybe because the Constitution is, intentionally, hard to change. Maybe because putting it in the Constitution is just plain stupid, lazy drafting. In fact, statutes created through an initiative by voter petition can be made hard to change by the Legislature. The entire Political Reform Act (Proposition 4, 1974) containing hundreds of sections has remained virtually intact for 50 years. Imagine if the Political Reform Act drafters had done what the TPGAA drafters did here. For one thing, the campaign finance threshold, which was $500 in 1974, could not have been revised for inflation by the Legislature.
13119.(a) The ballots used when voting upon a measure proposed by a local governing body or submitted to the voters as an initiative or referendum measure pursuant to Division 9 (commencing with Section 9000), including a measure authorizing the issuance of bonds or the incurrence of debt, shall have printed on them the words "Shall the measure (stating the nature thereof) be adopted?" To the right or below the statement of the measure to be voted on, the words "Yes" and "No" shall be printed on separate lines, with voting targets. If a voter marks the voting target next to the printed word "Yes," the voter's vote shall be counted in favor of the adoption of the measure. If the voter marks the voting target next to the printed word "No," the voter's vote shall be counted against its adoption.(b) If the proposed measure imposes a tax or raises the rate of a tax, the ballot shall include in the statement of the measure to be voted on the amount of money to be raised annually and the rate and duration of the tax to be levied.(c) The statement of the measure shall be a true and impartial synopsis of the purpose of the proposed measure, and shall be in language that is neither argumentative nor likely to create prejudice for or against the measure.(d) For purposes of this section, the following terms have the following meanings:(1) "Local governing body" means the governing body of a city, county, city and county, including a charter city or charter county, or district, including a school district.(2) "Target" means an object designated as the aim for a voter to make a vote selection.The last clause of (d)(3) belongs in Section 9603, where the term used is "advisory election." There is no such thing as an "advisory measure" anywhere in the Elections Code. The language used in TPGAA is so far out of line with Section 9603 that it's as if the drafter didn't look at the existing law, but just made it up on the spot. TPGAA does not have a corresponding provision for statewide measures, allowing the courts to leave in place a legislative power construed from the "investigative power" of the Legislature.
The courts have a rule: In conflicts between the Constitution and statutes, the Constitution always wins.
Let's examine all the conflicts. Then, does anyone believe that a any normal person, let alone a judge, is going to try to figure out which word in the Constitution conflict with which words in the statute and make any sense out of this. When conflicts in language arise, judges will not perform word by word substitution. Judges will deal with structures like paragraphs, sentences, and possibly even clauses, or maybe even phrases, but they will not look at words. That would be akin to rewriting the law. One possible outcome a judge might consider is that subparagraph (d) replaces Section 13119. Another possible outcome is that the opening sentence of (d) replaces Section 13119(a) and (d)(1), (d)(2), and (d)(3), replace Section 13119(b). Whatever a judge would do, it would be a mess.
The operative sentence of Subparagraphs (d)
Subparagraphs (d)(1) and (d)(2) partially conflict with Section 13119(b). Subparagraph (d)(3) is completely new. The first sentence of (d)(3) is intended to be printed on the ballot, but it doesn't exactly say that. The second sentence of (d)(3) starts with a conditional clause. It uses a different phrase than the
Subparagraph (d)(3) deals with a very specific case of the use of advisory elections. It leaves wide open the ability of a local government to compete with initiatives by voter petition under the guise of advisory elections. The whole panoply of situations that concurring and dissenting justices laid out in
Howard Jarvis could be used. It is much easier and less expensive for a local government to place an advisory election on the ballot than a competing measure.For example, take the case of an initiative by voter petition (Riverside County, M, November 3, 2020).
Shall the measure repealing the voter-approved, locally-controlled Measure DD sales tax generating over $10,000,000 per year in local funding that cannot be taken by the state be used to maintain Menifee 911 emergency response; school and police patrols; street and road repairs; traffic reduction; senior and yourth [sic] programs; parks and other general services, be adopted?Rather than risk rigging the ballot label to defeat the measure, the City of Menifee could have simply asked a question, like, "If Measure M passes, do the voters want to apply the cuts in revenue to police protection?"
(e) Only the governing body of a local government, other than an elector pursuant to Article II or the initiative power provided by a charter or statute, shall have the authority to impose any exempt charge. The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge
(f) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt charge shall be submitted to or approved by the electors, nor shall any such amendment to a Charter hereafter submitted to or approved by the electors become effective for any purpose.
(g) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this section.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(g).
This is so toothless as to be a joke. Perhaps it is, a joke that is.
To start off, it's not self-executing. Can words on a piece of paper make something void? Are all the local governments who didn't adopt the tax as required by TPGAA just going wake up on November 6th 2025 and say, the tax is void today because the Constitution says it is? In the alternative, are they going to go out and put the measure on the ballot again in 2025?
In fact, it's going to a require a lawsuit to enforce this provision. Lawsuits cost money. Lawsuits need lawyers. Lawsuits need plaintiffs.
The first question we have about this provision is what type of a lawsuit under the Code of Civil Procedure should be brought? Writ of mandate? Taxpayer waste? Who has standing? TPGAA is no help. So what's a potential plaintiff to do? Get a lawyer to go to court and tell the judge that Art. II, Sec. 2(g) says the local tax is void, so please make it so.
But the lawyer has a bunch of other problems thanks to the vagueness of not only Sec. 2(g), but also all the other provisions in Section 2. Problems like what does "not adopted in compliance with the requirements of this section" mean? Wouldn't the lawyer have to start out with figuring out whether the thing is a "tax" or an "exempt charge" first? If we were to believe the Yonan Declaration, there are no local taxes that were adopted in 2022 that don't comply. Of course, the brain-trust wouldn't have known that in January 2022. So, did all the local governments whose local taxes were adopted in 2022 do something different than what they had been doing previously in anticipation of TPGAA? There's not a single shred of evidence anywhere that the local governments did anything differently. So what's the point of this provision?
In connection with a lawsuit, there is also ripeness, mootness, and statute of limitations. TPGAA tells us nothing about any of this. Can the lawsuit be filed before November 2025? Does the plaintiff have to wait until it's too late for the local governing body to call an election before it's void.
Note that 2025 is an odd-numbered year. There are no primary or general elections in 2025. Because the Legislature made it uncomfortable for any local governing body to hold an election in an odd-numbered year, even all the special districts, like school districts, college districts, and the rest have moved there elections from the regularly scheduled November 2025 Uniform District Election date under Part 4 of Division 10 of the Elections Code. So, is it even possible for a local governing body with a potentially void election, where the local governing body wants to see if TPGAA passes before holding what would otherwise be a meaningless election, would that governing body even be able to hold an election within the year? Another case of poor drafting and poor thinking by lazy lawyers. There are only a handful of school districts remaining that can hold a Proposition 39 (2000) school bond election in November 2025. Maybe they'll get lucky and the Governor will declare a special statewide TPGAA election day in 2025 so all the void elections from January 1, 2022 to November 5, 2024 fix the issue.
So far, TPGAA has a problem with no procedure to make a tax void, no way to hold a curing election before the TPGAA deadline, and no date on which a lawsuit becomes ripe (controversy capable of being heard by a court). Maybe this is Hiltachk meant when he said at the oral argument on May 8, 2024 that "This is most decidedly a case that begs for post-election analysis, and there are multiple reasons for that." (Oral argument video at 27:44.)
What about who can be a plaintiff in such a suit? Again TPGAA is silent. The brain-trust figures it'll just leave all those details for the lawyers and the judges to figure out.
What about a statute of limitations? Is that a date beyond which a lawsuit to void a tax or exempt charge cannot be brought? Nope.
What about the proceeds of the void tax or fixed charge? Can the tax payers claw back what they've paid after November 2025? Nope.
We could continue a little more, but hopefully you can see the point. This section, and we contend, almost all of TPGAA, isn't a serious effort. It hasn't been thought out.
Another possibly is that the brain-trust never intended to enforce this subdivision. Maybe it was just put in there to scare local government.
In any case, this subdivision is not going to enforce itself. The Yonan declaration is so non-committal on enforcement that you get a sense the scare tactic is the intent. But all you tax payers out there, you can bet your bottom dollar that the brain-trust will not be riding a white horse to rescue you from any void tax or exempt charge.
In December 2021, it would have been impossible for the brain-trust to have identified any tax or exempt charge that was adopted after January 2022 because that was in the future.
So all the brouhaha over all these local governments not being able to plan their budgets for 2024 was just a load of malarkey. The Supreme Court was either duped into hosting a dog and pony or it was in on it.
From a dishonest marketing perspective, this voiding business may still have some legs, but not if we have anything to say about it.
(h)(l) The local government bears the burden of proving by clear and convincing evidence that a levy, charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(h)(1).
Subparagraph (h), below, contemplates going to court. That's good for the lawyers, but not for the courts or the tax payers.
Typically, any court case requires that a complainant have standing, often characterized as an injury that is different than that of the public at large. This means that only an actual tax payer may sue, after they find and pay a lawyer. TPGAA could have provided standing to an organization, like a local tax payers association. Without that, only brave individuals who don't fear ridicule or retaliation are the only people who can enforce any of this.
Local governments don't voluntarily follow inconvenient law. Why didn't TPGAA deal with standing?
Subparagraph (h)(1) establishes a higher standard of proof, "clear and convincing evidence." Previously, it was just the minimum, preponderance of the evidence. So, it makes it harder for local governments to establish an exempt charge.
By wording it this way, it establishes, in a way, a presumption that every levy, charge, or exaction is a tax. Changing the burden of proof makes it harder for local governments as well.
However, this is only for cases before a judge. There is no requirement that "clear and convincing evidence" be established earlier, such as in the enactment. This probably means more law suits, since the tax payers will not know what the "clear and convincing evidence" is unless they go to court. That was short-sighted.
(2) The retention of revenue by, or the payment to, a non-governmental entity of a levy, charge, or exaction of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(h)(2).
TPGAA adds this new language. Again, this is for judges in courts. It describes a "factor" or element that judges are prevented from considering. It backs into the problem that TPGAA claims to solve. Instead of just defining a tax to be payee-neutral, it puts a prohibition on judges. However, TPGAA complains that courts are part of the problem. There is no consequence for a judge just ignoring this provision.
This provision is obviously intended to prevent another paper bag case, where the alleged tax was paid to the merchant.
REMINDER: What about the case of the Legislature imposing the tax that is ultimately paid to a local government or non-governmental entity.
(3) The characterization of a levy, charge, or exaction of any kind imposed by a local law as being paid in exchange for a benefit, privilege, allowance, authorization, or asset, shall not be factors in determining whether the levy, charge, or exaction is a tax or an exempt charge.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(h)(3).
TPGAA adds this new language. Since the language about benefits and privileges was removed, it's hard to see how this makes a difference. Perhaps, it's just insurance. But still, the prohibition is on "hostile," "conflicted" judges, who may decide to ignore it. What then?
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.
Commentary on TPGAA Section 6 (Art. XIII C, Sec. 2(h)(4).
TPGAA adds this new language. Besides the two previous "factors" that may not be considered, a factor required to be considered is added. We reason that making the "use of revenue" a factor is somewhat dangerous. The term is used in several other places in TPGAA, but it is not defined.
This, arguably, applies to both local governments and non-governmental entities. In the paper bag case, we could argue that the use of the revenue was to defray the cost of providing the paper bag. The paper bag, by the way, which the customer requested.
In other places "use of the revenue" is a factor in determining whether a tax is a general tax or special tax. Is that the way it's used here? General purposes versus specific purposes? Would that make the paper bag tax a "special tax" because it was used for a specific purpose?
The problem with this language is that in the general-special tax dichotomy, the "use of the revenue" is used to determine the characteristics of an election. In the context of an election, that might be clear. However, it also could be used in a non-election situation. In other words, it could be used in a court proceeding to determine whether an election is required, like the paper bag case.
And once again, what prevents judges from simply ignoring it. Courts might hold that this is legislation that interferes with their deliberative duties. In that case, an appellate court might just strike it down as a separation of powers violation.
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited
(a) No tax, assessment, fee, or charge, or surcharge, including a surcharge based on the value of property, shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except:
(1) The ad valorem property tax imposed pursuant to described in Section 1(a) of Article XIII and Section 1(a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section 1(b) of Article XIII A.
(2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4 of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities district by the legislature pursuant to statute as it existed on December 31, 2021.
(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article.
(b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership.
Commentary on TPGAA Section 7 (Art. XIII D, Sec. 3.)
Subdivision (a) is another battle in the brain-trust's war on words. Here it's going after "surcharge."
The Housing Affordability and Tax Cut Act of 2022 was an initiative that, among other things, would have imposed an ad valorem surcharge on properties assessed at over $4,000,000. The initiative (21-0023) was active when TPGAA was written. It went nowhere.
Our search for the other demon, "The Tax Cut and Housing Affordability Act," turned up empty, so we don't know what it was.
It appears that the brain-trust wanted to head these demons off at the pass, so it changed the constitution to protect us against what was and still is a phantom menace. The new word ("surcharge") could not stand on its own. It had to modified with an "including" clause. This is another example of the whack-a-mole strategy. The next version of this menace will likely use a word other than "surcharge." But TPGAA adds a few more words to one of the lengthiest state constitutions in the country.
The change in (a)(1) appears to not really change anything. Since TPGAA changes the definition of "impose," however, the word "describe" is used in its stead.
The change in (a)(2) responds to AB2327 which changed some rules for financing community facilities districts, commonly known as Mello-Roos.
We note the qualification on the word electors in this section. The other two occurrences of "electors" in TPGAA don't rate getting the "qualified" treatment. Is there a difference between a qualified elector and an elector? Is it defined somewhere, like in the Elections Code? Was electors used in other parts of Article XIII A, Article XIII C, and Article XIII D? What about "impose"?
TPGAA sections 1, 2, 3, and 9 will only appear in the measure itself. Those sections will not appear in the Constitution. If anything, changes to a constitution should be precise. It should also be clear what they mean. If anyone reading the changes, needs to refer to other sections of the Constitution or the codes in order to understand what the TPGAA sections do, how are the agencies supposed to understand? More importantly, how are the courts supposed to understand?
Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States:
(a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value.
(b) All property so assessed shall be taxed in proportion to its full value.
(c) All proceeds from the taxation of property shall be apportioned according to law to the districts within the counties.
Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district in which it is situated. Notwithstanding any other provision of law, such state or local property taxes shall be apportioned according to law to the districts within the counties.
Commentary on TPGAA Section 8 (Art. XIII).
Article XIII is the fundamental taxation provision in the constitution. On first blush, we would suspect that it would be highly risky to change any language in this article, especially Section 1. No matter how poorly one thinks of the Legislature, they do have processes -- bills are proposed, hearings are scheduled, pros and cons are heard, etc. In all that process, if there are problems, some interested or knowledgeable people are likely to raise them. The brain-trust is a secretive body. We don't know how it arrived at the language presented here. This is the fifth attempt to fix Proposition 13. Without making its analysis fully public, how much faith should we be forced to provide that the brain-trust can be trusted.
Subdivision (c) is completely new. What problem is TPGAA trying to fix? Is the "surcharge" mentioned in TPGAA Sec. 7 (above) and TPGAA Sec. 9(B)(2) (below)?
We're going to make an educated guess that it is fixing a problem that TPGAA creates by inserting "state or" in front of local government in the amended Section 14. In other words, the brain-trust expects that the state government is taxing property through surreptitious means. We agree, but not just based on value. Read the short discussion of how CalRecycle is taxing property owners via an unfunded state mandate for its refuse separation and collection regulations.
We'd really need to do a lot of research to solve that problem. In Walden, Henry David Thoreau wrote: "There are a thousand hacking at the branches of evil to one who is striking at the root." The simplest solution is to prohibit the Legislature and the Executive, and we might as well throw in the Judicial, from mandating anything that it does not fully fund. Supposedly, there is a Commission on State Mandates to determine whether the Legislature can get away with not funding mandates. It's run by politicians. It's a joke.
The result of trying to fix something like this on the back end is that it creates a whole new set of problems. How does one figure out the apportionment. If you're old enough to remember, Proposition 13 created a huge, complicated apportionment situation when it was implemented in order to determine how local government agencies would get their share of the one percent ad valorem county property tax.
So the brain-trust also repeats, substantively, subdivision (c) in Section 14. Our first issue with this language is that it doesn't define districts and it appears to exclude the county itself from getting an apportionment. Finally, what does "according to law" mean? Does it include language in the Constitution itself? codes of statutes? regulations? court opinions? The brain-trust probably has something in mind, so why doesn't TPGAA say it. Because the brain-trust doesn't want to limit the language. We suppose this is just more grist for the lawyers' mill.
Unless you've dug into this, like we have in relation to school bonds, one may not know that every county creates an "equalized" assessment every year. This equalized assessment is composed of a variety of things, including "unitary and operating nonunitary" property. We understand this includes property owned by public utilities that are privately owned that is calculated statewide and then divided up among the counties. Read Education Code section 15268 and section 15270. See if you can figure it out. Those sections were created to determine a maximum estimated amount that a school or college district could tax property owners for the repayment of Proposition 39 (2000) bonds.
The people have amended the constitution multiple times to attempt to solve the unfunded mandate problem, but only in a limited way. It's right there in Art. XIII, Sec. 25.5.
The bottom line is, rather than solving a problem, it will provide job security for the thousand lawyers "hacking at the branches." Will it work? "We have to pass the bill," Nancy Pelosi said, "so that you can find out what is in it -- away from the fog of the controversy."
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (1) In the event that this initiative measure and another initiative measure or measures relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other initiative measure or measures shall be deemed to be in conflict with this measure. In the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other initiative measure or measures shall be null and void.
Commentary on TPGAA Section 9(B)(1).
If one were to closely follow the Legislature, more than a full-time job in itself, one may have heard of ACA 13. The Legislature appears to have one-upped the brain-trust. The above is clearly aimed at "competing" statewide "initiatives." ACA 13 is not one of those. However, Art. II, Sec. 10(b) says: "If provisions of two or more measures approved at the same election conflict, the provisions of the measure receiving the highest number of affirmative votes shall prevail." This language is substantively unchanged from Proposition 7 (1911), ¶ 7. Why did the brain-trust limit conflicting measures to initiatives? When it does go to court, costing the funders possibly hundreds of thousands in legal fees, what will the brain-trust argue? That TPGAA didn't mean what it said? That the "or measures" clause of "initiative measure or measures" meant any measure, including measures by the Legislature? That Art. II, Sec. 10(b) supersedes it? This is yet another example of poor drafting. In 2018, the Supreme Court approved sweeping changes to the Rules of Professional Conduct for lawyers. One of the important changes is that the first rule (Rule 1.1) is now "Competence." One has to wonder about the lawyers of the brain-trust. Does adding the adjective "initiative" to measure in this section demonstrate competence? We guess that only their hairdresser knows for sure.
Another question that is not resolved in TPGAA is whether the two-thirds requirement for local special taxes is an "increase" in the approval threshold for local initiatives by voter petition. An argument could be made that
Coalition was a poorly reasoned decision and the two-thirds requirement from 1978 has never been changed, so it's not an increase. We note that TPGAA uses "two-thirds" six times. Some of those instances relate to the Legislature and not the voters. The second section of ACA 13 makes "an initiative measure that includes one or more provisions that amend the Constitution to increase the voter approval requirement to adopt any state or local measure" its target.As an aside, do the brain-trust realize that changing the enumeration of existing sections of either the Constitution or codes wreaks havoc on existing court opinions and any other existing material, whether scholarly, journalistic, or whatever? There is no requirement in constitutional or statutory drafting that the enumeration system be sequential. As you'll learn from the few examples below, TPGAA, throughout, makes changes to the enumeration system for no other reason, apparently, than an anal-retentive desire for the appearance of orderliness. So a subdivision that was X is now Y. Consequently, every historical reference to X confuses anyone trying to reconcile the previous enumeration with the present. The Legislature did this a couple of years ago when it amended section 9051 of the Elections Code. What used to be subdivision 9051(c) is now subdivision 9051(e). Subdivision 9051(c) was a very important statement about the language the attorney general was permitted to use in writing ballot titles and summaries for statewide measures. There are a lot of court opinions referring to 9051(c) since 1996, when the entire Elections Code enumeration system was last changed.
Here are the instances of "two-thirds" in TPGAA.
- #1 Descriptive
- TPGAA Section 3(e) describes a purpose of TPGAA to "reverse loopholes in the legislative two-thirds vote and voter approval requirements ... created by the courts." Obviously, this isn't an amendment.
- #2 No change
- TPGAA Section 4 amends Section 3 of Article XIII A. It amends Section 3(a) by making it Section 3(b). In Sec. 3(b)(1), "two-thirds" refers to "an act passed by not less than two-thirds of all members". The two-thirds is currently in the constitution as Sec. 3(a). The section is, technically, "amended" however. The members of the Legislature are not the voters on an initiative measure. Therefore, this amendment is clearly not within the scope of ACA 13.
- #3 New
- TPGAA Section 4 amends Section 3 of Article XIII A. It adds Section 3(b)(1)(B) which refers to a "change to the use of the revenue from the tax shall be adopted by a separate act that is passed by not less than two-thirds of all members." The members of the Legislature are not the voters on an initiative measure. Therefore, this amendment is clearly not within the scope of ACA 13.
- #4 No change
- TPGAA Section 6 amends Section 2 of Article XIII C. Sec. 2(c) is repealed and Sec. 2(d) is changed to Sec.2 (c). The context is "tax is submitted to the electorate and approved by a two-thirds vote." The two-thirds requirement is currently in the Constitution. Does it "increase the voter approval requirement?" While we think not, some lawyer could certainly make an argument that it does. Note that "of qualified voters" is not added to modify "vote" as it is in the next instance.
- #5 No change
- TPGAA Section 7 amends Section 3 of Article XIII D. Sec. 3(a)(2) uses "two-thirds" twice. The context of the first instance is "tax receiving a two-thirds vote of qualified electors." As already noted above, why was "of qualified voters" added here, but not in the context of the fourth instance, above. Once again the two-thirds requirement already exists. Does the modification of "voter" with "of qualified voters" make it an increase? In other words, is "a two-thirds vote" where unqualified votes are counted -- you know, people who moved, dead people, non-citizens -- mean the same as "a two-thirds vote of qualified voters?" Of course, in California there's no way determine whether a vote was cast by an unqualified voter.
- #6 New
- TPGAA Section 7 amends Section 3 of Article XIII D. Sec. 3(a)(2) uses "two-thirds" twice. The context of the second instance is "a two-thirds vote of those authorized to vote." This is completely new. To say that Mello-Roos is complex doesn't do the word justice. We looked at the five sections that were amended by AB2327 and none seem to be relevant to this language. We diligently searched the legislative session for 2021 to 2022. We found AB-678 "Housing development projects: fees and exactions cap." AB-678 was "alive" at the time the brain-trust wrote TPGAA. It died on January 31, 2022, just days before the Attorney General filed the title and summary. AB-678 appears to be relevant because it involved what appears to us to be changes to the way special taxes for Mello-Roos districts are levied. But, it died. The question then becomes does this instance "increase the voter approval requirement to adopt any state or local measure?" Even more fundamental, however, does it do anything? Or is it just more detritus in the Constitution fighting another phantom menace.
We note the Legislature had a very fixed target in mind for ACA 13. TPGAA language could not be changed. Is it possible that the Legislature wrote a constitutional amendment that would miss its target?
In other words, does ACA 13 apply to TPGAA at all. Put another way, does TPGAA amend the Constitution to "increase" any vote requirement for measures. We've certainly made an argument that ACA 13 might not apply despite all the Sturm und Drang from the brain-trust and the breathless reporting in the media. It's possible that the brain-trust understands this and is using the attack as propaganda for its benefit. Maybe.
The modification of the word "vote" in one instance (#5 above) and not in another (#4) is just another example of sloppy drafting. If it has any meaning, why is "qualified electors" added to some instances of "vote" and not to others? Is "authorized to vote" the same as a qualified elector? In the weird world of Mello-Roos, people, generally, get to vote on the basis of the property they own. So, the answer is no, but Mello-Roos does not use the term "authorized to vote" either.84
We're pretty much stumped on this on instance #6, above. Section 53326 of the Government clearly permits a special tax to be voted on at a special election. That clearly violates Art. XIII A, Sec. XXX requirement that special taxes are only to be voted on at a general election. That's what
Coalition was primarily about -- whether Upland had to conduct a special election for the initiative by voter petition. The opinion of all the justices was that it did under section 92xx.In our view it would quite fitting in a karmic sense, that if ACA 13 were to pass, that TPGAA were to fail (getting less than a two-thirds vote) due to the sixth instance of "two-thirds" above. It's one thing to deal with laws that exist, it's quite another to treat every speculative act of the Legislature as a full-blown demon.
This is what happens when the brain-trust gave the Legislature nearly two years to come up with ways to nullify TPGAA. Planned properly, it would have and should have been on the November 2022 ballot.
If TPGAA and ACA 13 pass and TPGAA gets more votes than ACA 13, will there be lawsuits challenging ACA 13 as a competing measure?
Who knows? The future looks murky. The funders of the brain-trust now have to fight against two measures put on the ballot by the Legislature and fight for their own measure. That's a lot of money. And it all could go down the drain.
We can't predict what will happen. What we can predict is that brain-trust lawyers will make a lot of money no matter what happens.
(2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the provisions of the "Housing Affordability and Tax Cut Act of 2022" and "The Tax Cut and Housing Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain real property, and where the revenue derived from the tax is provided to the State, rather than retained in the county in which the property is situated and for the use of the county and cities and districts within the county, in direct violation of the provisions of this initiative.
(3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting initiative is later held invalid, this measure shall be self-executing and given full force and effect.
C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not
D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse to defend this Act, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 2 of the Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act on behalf of the State of California.
(2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counsel that independent counsel will faithfully and vigorously defend this Act. The written affirmation shall be made publicly available upon request.
(3) A continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California.
(4) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association, from intervening to defend this Act.
We know, it sounds fairly self-aggrandizing that we would actually have the temerity to propose that the brain-trust behind TPGAA has failed and that we could do better.
What are the main issues?
1.) What Is a Tax? (The definition of tax.)
2.) Election Avoidance. (Governments are avoiding elections on tax matters.)
3.) Court "loopholes." (Courts have not agreed with the brain-trust's arguments.)
4.) Manipulating Elections. (Governments are manipulating elections.)
5.) Statewide - Local Measure Election Dichotomy. (The rules for statewide measure elections are different than the rules for local measure elections.)
We believe we have fairly stated the problems in plain language that anyone can understand.
If we were to prioritize these, Manipulating Elections would be far and away the top priority. TPGAA gives it short shrift. Most consequentially, TPGAA duplicates, more or less, what already exists, then destroys what exists, and ultimately still provides no consequence.
The only meaningful consequence for election fraud is to deprive the fraudster of the benefits of the fraud. The consequence was created in 1850. Stats. 1850, Ch. 36, pp. 106-108.
For local measure elections, and perhaps even for statewide measure elections, adding the following language to appropriate, existing statutes would resuscitate the consequence.
This section is mandatory, and not directory, after an election.
These are magic words. They will likely save local tax payers billions of dollars every year. The courts have already ruled on them more than 150 years ago. To be most effective, and to prevent the legislature from undoing them, the language should be added by a statewide initiative statute.
Remember when the Internet put travel agencies out of business, virtually overnight. Those words will put the local measure election manipulation industry out of business, virtually overnight, as well.
You can read the rest of the discussion. Once there is a known consequence in place, local measure election fraud will end.
As the courts have already determined, there are two primary ways to determine if something is a tax. One way is by the nature of how it is imposed. The other way is by the use of the revenues collected.
In general, governments do not create products or provide services. You don't go down to your neighborhood government office and pick up pizza. You also don't go to a government office to get its price to cut your grass.
What government does is grant itself monopolies, then charge people for products or services for which it is the exclusive purveyor.
While there are those who voluntarily donate money to governments, government is funded by revenues that it exacts from people (not businesses) under threat of penalties.
Governments also create monopolies in the franchising, licensing, and authorizing of activities that are carried out by people.
Courts, generally, have considered the tax power and the police power, two different things. We believe that distinction was created to allow governments to use the police power as an artifice to hide taxes.
The police power is used to create the oxymoronic "civil penalty."
One could use the argument expressed in
In
Of course, Marshall was a Federalist, favoring more power for government. In
The people of a state, therefore, give to their government a right of taxing themselves and their property, and as the exigencies of government cannot be limited, they prescribe no limits to the exercise of this right, resting confidently on the interest of the legislator, and on the influence of the constituent over their representative, to guard them against its abuse.Id. at 428.
With 1,250 people per assembly member in 1850 exploding to 487,000 people per assembly member in 2022, the time where the people could rest "confidently ... on the influence of the constituent over their representative" is long past.
An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation. A question of constitutional power can hardly be made to depend on a question of more or less. If the states may tax, they have no limit but their discretion; and the bank, therefore, must depend on the discretion of the state governments for its existence. This consequence is inevitable. The object in laying this tax, may have been revenue to the state. In the next case, the object may be to expel the bank from the state; but how is this object to be ascertained, or who is to judge of the motives of legislative acts?Id., at p. 327-28.
All government revenue, less donations, are taxes.
A tax, therefore, is any
One of the ways that governments avoid elections for what some might perceive as taxes is by calling costs imposed something different.
For the kinds of taxes for which the Legislature has written enabling legislation in the Government Code or elsewhere, there is little avoidance. Consequently, the government turns to cheating. The brain-trust has let the cheating happen for more than 45 years. It's right there on the ballot in full public view. Perhaps it's because the brain-trust only knows Articles XIII A, XIII C, and XIII D, so it doesn't see what's obvious to everyone else. The emperor has no clothes.
The brain-trust's solution is keep changing the definition of the term tax. As the court opinions have already pointed out, that is likely to continue to be futile.
We haven't fully developed this yet, but we contend that every tax, no matter who collects it, results in an extra cost. If the cost is made to be born anywhere upstream in the supply chain, sort of like the value-add-tax systems of Canada and Europe, the only effect on the ultimate consumer, the people, is the extra cost.
Usually, that cost is so far removed from the price of goods and services, that it would be nearly impossible to trace back how much of the price can be attributed to any specific government act.
Sometimes, however, like the sales tax, it's right up front. The sales tax has two components -- sale transactions and use. It's an excise tax on retailers and it has lots of loopholes. The marketing strategy of the businesses, however, has been to openly separate and charge it. The tax is on the business, but the business just passes it directly to the people.
We haven't worked this out fully, however, we contend that every act of government that imposes an economic burden on someone -- the wealthy, businesses, professionals, etc. -- is a tax. If the minimum wage is mandated, it is a tax on those required to pay it. Those businesses, in turn, increase the price of the goods or services.
When CalRecycle tells everyone to separate trash at the source or downstream from the source, it is imposing costs on the people. In the case of individual people who separate their personal trash, CalRecyle has made them slaves. Those people are not compensated for their labor. Those people have no one to pass those costs on to.
So, if we were to consider how to accomplish the goal, it would be to focus on the imposition of costs. If the government imposes regulations on anyone, private or public, those costs are taxes, whether or not money is collected directly.
One way to accomplish this at the source, the taxing entity, is to eliminate unfunded mandates completely. Doing this would require the government to pay for the mandated policy with money. In order to get the money to pay for it, it would need to collect it from someone. That amount becomes the tax.
At that point, of course, the government will claim that it is not using its tax power, but its police power. So limiting the police power would come next. It's complicated. No one said life was easy.
How about the brain-trust really do something valuable? Eliminate the limitations on the reserved initiative power. The fixed size of the Legislature and the governing bodies of many counties and cities has allowed the concentration of power in the few since the first California constitution. Removing the "revision" provision would allow setting the maximum number of people that any "representative" can represent. In order words, restore it to what it was in 1911. Doing the same for the referendum would be more difficult.
The first amendment proposed of the twelve amendments proposed in the Bill of Rights was this:
Article the first... After the first enumeration required by the first article of the Constitution, there shall be one Representative for every thirty thousand, until the number shall amount to one hundred, after which the proportion shall be so regulated by Congress, that there shall be not less than one hundred Representatives, nor less than one Representative for every forty thousand persons, until the number of Representatives shall amount to two hundred; after which the proportion shall be so regulated by Congress, that there shall not be less than two hundred Representatives, nor more than one Representative for every fifty thousand persons.
With each "representative" representing no more than 50,000 people, the power of any individual elective office would dramatically decrease. That's 780 members of the assembly for a population of 39,000,000. As a bonus, gerrymandering would likely lose its charm.
In our analysis of the court opinions, we have made the case that much of what the brain-trust calls "loopholes" or "hostile" is in fact the failure of the brain-trust lawyers to do their homework.
Their claim is that they know Proposition 13 and its progeny. Their claim is always that they know what the voters voted on.
Firstly, from Proposition 13 onward, the measures have focused ONLY on changing the Constitution. Except for that is, the ill-fated Proposition 62 (1986). You never hear the brain-trust talk about this failure. Why? Because it got skunked. The courts in separate decisions over the years following its adoption have declared the statutory amendments to the Government Code all unconstitutional.
Not everything belongs in a constitution.
A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind. Id. at 407.
But, the brain-trust knows better. We suspect that the brain-trust doesn't want to be embarrassed by having courts declare one of the brain-trusts statutes unconstitutional again. Consequently, there is a rat's nest of procedural details in Proposition 218 (1996). TPGAA makes it even worse as discussed throughout this paper.
As an example of the consequence of putting these procedures in a constitution, look at Art. XIII D, Sec. 6(a)(2). "If written protests against the proposed fee or charge are presented by a majority of owners of the identified parcels, the agency shall not impose the fee or charge." What is a "written" protest? "Written" is not defined anywhere in the article or the section. Neither is "protest." In 2019, a local water district started the procedure under Sec. 6 to raise the water rates. The district wanted a signed piece of paper from the "record owner" of the "parcel." There's a lot wrong with this, but we focused on the signed piece of paper. Of course, the district does not collect the signatures of the record owners, so would have no way to verify any signature. After speaking with the district's lawyer, we were able to get an agreement that it would accept protests via e-mail. We were persuasive. But for four rate increases over the 20 previous years, only signed, written protests were allowed. Can we go ask the Legislature to update this procedure for the 21st century. No. We would need a constitutional amendment. That's how ridiculous the brain-trust's we've-got-a-hammer-so-everything's-a-nail thinking is.
Could we go to court and a court to make such a salutary change? Likely not, because it is not the job of the courts to write law. In 1996, the brain-trust couldn't fathom that e-mail, which had existed for 20 years, would be a "thing." What about making a protest on the district's web site? What about allowing the person paying the charge to protest? Fuggedaboutit!
Could the brain-trust have said, since we are going to spend millions to change Proposition 218 (1996), again, shouldn't we examine all of it and see if there are things that need to be improved or updated? We get it, the funders may not have liked that. But guess what, the funders are people, and they employ people, who have families who have neighbors who might benefit from such an overhaul, even if it were to cost a little more in paper and ink to put it on the petition. Blank stares from the brain-trust. We can't wait for Elon Musk to invent something to give them a brain-update. Of maybe it's just about the money they can exact from the unsuspecting.
As an aside, we saw reported that one of the brain-trust members remarked that Proposition 218 (1996) was based on Colorado's TABOR (1992). This sounded incredible to us, so we looked up the 1992 initiative known as the Taxpayer Bill of Rights (Colo. Const. Art. X, Sec. 20). Other than the fact TABOR, like Proposition 218 (1996), requires taxes to be voted on, the two measures have nothing in common. If you pay attention to tax issues around the country, you would also know that TABOR has been a subject of contention for decades. It requires refunds of excess taxes. Of course, Colorado's Legislature and Governor fight tooth-and-nail every year to prevent that refund. The battle never ends.
So, what are the loopholes? They all show up in court opinions where judges decide that the purpose and the language of Art. XIII A and Art. XIII D does not support the brain-trust's claims.
But mostly, we contend, it's that the brain-trust does a slipshod job in writing the language to begin with. TPGAA is a good example of that. The balance of the problem is that the brain-trust only appears to know Proposition 13 and Proposition 218, so it argues in court only from that perspective. If you read the opinions, the brain-trust is often trying to read stuff into the language that just isn't there. Relying on the purpose, along with the "liberal construction" required by the propositions, the brain-trust wants the courts to just roll over.
The California Supreme Court has held, over and over, that the fundamental law of elections requires that the government may not take sides in an election using public moneys and that doing so violates the Constitution.
Local governments have been using public moneys to take sides in local measure elections since 1979. The California Election Data Archive ("CEDA"), since 1995, has documented thousands of local measures where the government took sides in the election by printing arguments favorable to the government position directly on the ballot. The brain-trust behind TPGAA has done nothing to curb this ubiquitous activity over 45 years.
The laws exist that make using public moneys to take sides in an election crimes. The laws also exist to make the perpetrators personally liable for the misuse of public moneys. The laws are ignored.
Amending the following sections of the Elections Code accomplishes a few of the issues that TPGAA purports to address -- use of advisory questions conjoined with general tax measures, local measure ballot labels, etc.
Basically, it prevents Los Angeles County from assigning boutique ballot designations letters, like ULA. It also prevents the sub-state of the "bay area counties" region from assigning special ballot designations combinations like R3. It also prevents the requested reuse of the same ballot designation letter by the same local government for additional attempts to pass the same measure. This kind of use gives the local governments a tremendous marketing advantage in campaigns.
What these amendments do that TPGAA does not do is put teeth into the law. It makes each of the Chapter 2 sections "mandatory, not directory" after an election, creates a separate election contest ground for ballot thievery, and grants any elector in the state standing to contest any local measure in the state that violates the law. This is major, since the courts have found "6 ways from Sunday" to avoid overturning "plainly illegal" measure elections.
In the interest of space and repetitiveness, we won't incorporate the entire text of each section.
Section XXX. Amend Elections Code 9603, 13116, 13119, 13120, 16100, 16400, and 16401.
Section 9603 of the Elections Code is amended to read:(f) Notwithstanding any other provision of law, the ballot label for an advisory election must strictly conform to all provisions of Chapter 2 of Division 13 of the Elections Code.
(6) Notwithstanding any other provision of law, the elections official shall reject any advisory election that references in any manner another measure at the same election.
Section 13116 of the Elections Code is amended to read:(a) In an election at which
state, county, city, or otherstatewide measures or local measures are submitted to a vote of the voters, all state measures shall be numbered in numerical order, as provided in this chapter or division.All county, city, or other local measures shall be designated by a letter, instead of a figure, printed on the left margin of the square containing theThe elections official shall designate each local measure by a letter, instead of a figure, printed on the left margin of the square containing the ballot label, commencing with the letter "A" and continuing in alphabetical order, one letter for each local measure appearing on the ballot. When the quantity, for a single election, of local measures exceeds the number of letters in the alphabet, the elections official shall, for the 27th and succeeding local measures, commence with the letters "AA" through "ZZ". Similarly, for the 53rd and succeeding local measures, the elections official shall commence with the letters "AAA" through "ZZZ".descriptionof the measure, commencing with the letter "A" and continuing in alphabetical order, one letter for each of these measures appearing on the ballot.(d) When the geographic boundary for a local measure includes multiple counties, the elections official of the county with the largest number of voters eligible to vote on the local measure shall designate the letter, in accordance with this section, and shall inform the elections officials of the other counties, who shall use that designated letter for the local measure.
(e) For the purposes of this section, "local measure" means any measure that is not a statewide measure and includes advisory elections.
(f) Deviation is prohibited and presumed intentional. This section is mandatory, and not directory, after an election.
Section 13119 of the Elections Code is amended to read:(a) The ballots used when voting upon a measure proposed by a local governing body or
submitted to the voters as an initiative or referendum measureproposed by voter petition pursuant to Division 9 (commencing with Section 9000), including a measure authorizing the issuance of bonds or the incurrence of debt, shall have printed on them the words "Shall the measure (stating the nature thereof) be adopted?" To the right or below the statement of the measure to be voted on, the words "Yes" and "No" shall be printed on separate lines, with voting targets. If a voter marks the voting target next to the printed word "Yes," the voter's vote shall be counted in favor of the adoption of the measure. If the voter marks the voting target next to the printed word "No," the voter's vote shall be counted against its adoption.(b)
If the proposed measure imposes a tax or raises the rate of a tax, the ballot shall include in the statement of the measure to be voted on the amount of money to be raised annually and the rate and duration of the tax to be levied.Notwithstanding any other provision of law, if the proposed measure imposes a tax or changes the maximum rate of a tax or changes the date on which a tax ends, the text printed on the ballot shall include, in numeric characters, an estimate of the annual revenue to be collected, the maximum nominal tax rate, and the fixed or estimated period of years over which the tax will be collected (example, "for 30 years") or the date on which the tax expires (example, "until June 30, 2054") or, if the tax has no sunset date, "forever." If the tax rate is not limited by law, the text "(estimate, but without limit)" shall follow it.(e) Notwithstanding any other provision of law, if the proposed measure authorizes the incurrence of debt, the text printed on the ballot shall include, in numeric characters, the maximum amount of debt authorized and the maximum interest rate authorized.
(f) Notwithstanding any other provision of law, if the proposed measure qualifies pursuant to Chapter 1.5 of Part 10 of Division 1 of Title 1 of the Education Code, the text printed on the ballot shall include "the board will appoint a citizens' oversight committee and conduct annual independent audits to assure that funds are spent only on school and classroom improvements and for no other purposes."
(g) Notwithstanding any other provision of law, the elections official conducting the election shall reject any measure where the text to be printed on the ballot fails to strictly conform to each applicable provision of this section.
(h) Notwithstanding any other provision of law, if the election is subsequently vitiated because the ballot label was partisan, any member of a local governing body who voted to adopt the resolution to call the election, in addition to liability under section 424 of the Penal Code, is personally jointly and severally liable in a civil action for damages and for restitution of the costs of the election.
(i) Deviation is prohibited and presumed intentional. This section is mandatory, and not directory, after an election.
Section 13120 of the Elections Code is amended to read:(c) Notwithstanding any other provision of law, the elections official conducting the election shall reject any measure where the text to be printed on the ballot fails to strictly conform to each applicable provision of this section.
(d) Deviation is prohibited and presumed intentional. This section is mandatory, and not directory, after an election.
Section 16004 of the Elections Code is added to Chapter 1 of Division 16:As used in the division, "superior court" means:
(a) The court of record of the county of which the contestant is an elector; or
(b) In the case of a measure in a county in which the board of supervisors supplements the pay of the judges of the court of record, the court of record of a county that shares a border with the county of which the contestant is an elector; or
(c) In the case of an office for which candidates are certified for the ballot by the Secretary of State, or in the case of a statewide measure, the court of record of the County of Sacramento.Section 16100 of the Elections Code is amended to read:(h) That the text printed on the ballot for a measure, except a statewide measure, does not strictly conform to all applicable provisions of Chapter 2 of Division 13 of the Elections Code.
Section 16400 of the Elections Code is amended to read:(a) The name of the contestant and that he or she is an elector of the district or county, as the case may be, in which the contested election was held or, where the contest is brought on the grounds in subdivision (h) of Section 16100, that he or she is an elector of this state.
(b) The names of the
defendantcandidates or the names of the parties whose acts or omissions are grounds for a contest.(c) The office or measure designation.
(f) Venue for a proceeding under this division shall be exclusively in Sacramento County in any of the following cases:
(1) The Secretary of State is named as a real party in interest or as a respondent.
(2) A candidate for statewide elective office is named as a party.
(3) A statewide measure that is to be placed on the ballot is the subject of the proceeding.Section 16401 of the Elections Code is amended to read:(a) In cases other than cases of a tie, where the contest is brought on any of the grounds mentioned in subdivision (c) or in subdivision (h) of Section 16100, six months.
Statewide measures are fundamentally different than local measures, both in the nature of the issues that are submitted to the voters and the manner in which they reach the ballot.
Most glaringly, all local measures are required to be in the form of a question. The statewide measures are statements, not questions.
The most widespread complaint about statewide initiative measures is that the ballot title and summary is partisan or that it doesn't reflect the purpose of the measure.
Nothing in TPGAA will fix this.
Continuing to allow a partisan elective official, the attorney general, to write the ballot title and summary gives that office a tremendous amount of power over the "jealously guarded" initiative power.
Throughout the history of the statewide initiative, there have been several attempts to make the process more fair, including, at one time, having appellate judges write the ballot title and summary.
Since the Legislature has the power to submit measures to the voters and the power to directly enact legislation, the cost to get a measure to the ballot is minimal. When the Legislature puts a measure on the ballot, it is likely that it is being lobbied by special interests who are ready, able, and willing to mount the campaign to win voter approval.
In order for voters to submit measures to the voters, they have the cost of two campaigns -- one to gather the signatures and one to persuade the voters. Consequently, there are stages where perceived unfairness can arise. The first is in the circulating title and summary. The second is in the ballot title and summary.
The circulating title and summary is required prior to gathering signatures. At that point, no campaign has been launched. Public awareness is non-existent. At that point in time, the likelihood of the circulating title and summary being controversial is also low.
A solution that has not yet been attempted is to require that both the circulating title and summary and the ballot title and summary be written at the same time. The consequence of this approach would be that the initiative petition proponents could evaluate the chances of success before sinking millions of dollars into a signature gathering campaign. If the initiative proponents believed they could convince a court to change the language, that could be done before incurring the signature campaign expense.
The better question, however, might be why are statewide measures treated differently than local measures at all?
Under existing law, not what is practiced, local measure ballot questions are heavily constrained in what can be printed on the ballot. The question is, literally, "Shall the measure (stating the nature thereof) be adopted?" The voters are purposely given only a hint of what the measure is -- its nature. To learn more, the voters must either rely on 1) the county voter information guide, 2) the campaigns for or against the measure, or 3) analysis by interested parties to learn what the measure purports to do. There is no way to state truthfully what any measure will actually do. Let's repeat that. There is no way to state truthfully what any measure will actually do. Why? Because, 1) a measure is not a contract enforceable at law, 2) a measure is not a statute or ordinance, although it may enact a statute or ordinance in some instances, and 3) because a measure is not an amendment to the state constitution or to a city or county charter, although it may enact an amendment to the state constitution or to a city or county charter. Only the later, number 3, can constrain a legislative body.
A corollary to that is why should statewide measures have any more descriptive material on the ballot than local measures. The burden of persuasion should be on the campaigns.
The very act of writing a ballot title and summary for a statewide measure requires a point of view in order to summarize hundreds or thousands of words. That point of view is unavoidably biased. If a government agent is the author, the point of view (bias) will be that of the government. If one or individual people or one or more organizations are the authors, the point of view (bias) will be that of those people or organizations. Why should a government agent's bias be substituted for the non-government proponents of a statewide initiative by petition? Isn't that a constraint on the "jealously guarded" initiative power? The only solution to avoid the bias of the government or the bias of the proponents is to avoid the ballot title and summary altogether. For statewide measures, the ballot title and summary along with all the procedural nonsense that it entails is enacted by statutes. Enacting a measure to repeal the ballot title and summary and its concomitant statutes would be all that's necessary. In fact, unbiased statutes already exists in section 13119(a) for initiatives and in section 13120 for referenda. We contend that adding statewide measures to the domain of those statutes, along with repealing section 13119(b) and section 13119(c) would resolve the bias issue.
Both the judges and the lawyers, along with every one else interested in the topic throws around imprecise language about the nature of local measures.
This case presents an issue important to local governments and those interested in historic preservation: whether an initiative ballot measure, generated by a city council rather than by voter petition, ....Id.
Where did the Supreme Court get the notion that local measures put on the ballot by local governing bodies are initiatives? From the original statutes that granted those governing bodies the power to place direct legislation on the ballot. Political Code section 4058. Stats. 1911 Ex.Sess.1, ch. 31, p.125.
As we suggest in the discussion about the Los Angeles County Measure M case, under what statute do local governments have the authority to include all their arguments favoring a measure on the ballot? If they reply section 13119, then no one with election duties is doing their jobs. "The nature of" something is extremely limiting, as the Supreme Court has discussed.
It clearly appears, therefore, that the subject to which the proposed amendment to the Constitution relates is a tax on gross receipts for the purpose of meeting the expense of government. ... [2] The essential features, therefore, and the sole purpose of the proposed measure, is to levy a tax to maintain the state and its political subdivisions. ... We think it is clear that the short title neither shows the nature of the petition, nor does it show the subject to which it relates. ... In our opinion, this vital defect in the short title vitiates the whole petition and renders it inadequate for any purpose. ...Id., at pp. 472-73
Section 13119 is even more limiting than the statute considered in
For 104 years, "Shall the ordinance (stating the nature thereof) be adopted?" was all that was permitted on the ballot for a local measure. AB809 (2015) was an ill-conceived fix to a problem that wouldn't exist except for the universal disregard of the existing statute. There was no need to add information about the tax, except for the fact that local governments were universally ignoring the law and putting the arguments in favor on the ballot. So, subdivision (b) was intended to counterbalance the flouting of the law. The "fix" by AB195 (2017) added subdivision (c) to prohibit partisan language on the ballot. That too was to counteract the universal lawlessness of all the local governments and all the county registrars. It wasn't needed. Three appellate opinions that predate these "fixes" had already held that partisan language was prohibited on constitutional grounds. See
Both those legislative "fixes" were the brain-child of the brain-trust. The "fixes" fixed nothing because they didn't address the problem. TPGAA and the brain-trust still don't get it. TPGAA will fix nothing. It will, at least for local measures, make the current situation worse.
In the San Mateo County Measure Q case referred to in the Overview Overview to Legislature v. Weber (Hiltachk), the real party in interest (because the San Mateo County registrar refused to defend against the writ), Burlingame Unified, presented declarations containing all the school bond measures in the county with an "expert" from the law firm (or maybe it was from the registrar's office) declaring that the ballot label (shown below) was the standard.
To maintain the quality of Burlingame schools; modernize/renovate outdated classrooms, restrooms/school facilities to support 21st-century learning; fix damaged/leaky roofs; improve student safety; upgrade inadequate electrical systems; shall Burlingame Elementary School District's measure authorizing $97,000,000 in bonds at legal interest rates be adopted, at 2 cents per $100 of assessed value (approximately $5,600,000 annually) while bonds are outstanding, with annual audits, citizen oversight, no money for administrator salaries and no money taken by the State?San Mateo, Q, March 2020
Is that a sales pitch, or what? It truly is a standard in the sense that the formula is used by every school district in the state -- exactly one hundred times on November 8, 2022 alone. The problem is that the "standard" violates the law and our constitutions. Every successful school bond election since at least 2000 should have been vitiated.
The proponent himself represented one of our members, at great cost to our member and let it all slide. While Einstein is famous for the definition of insanity, there is another relevant aphorism often attributed to him: "You cannot solve a problem using the same level of thinking that created it." The brain-trust's thinking is focused solely on Proposition 13 (1978) and its progeny. We contend that the brain-trust will never solve the problems it created.
These "plainly illegal" elections, required by Proposition 13 (1978) and its progeny or by opponents of Proposition 13 (1978), have cost local tax payers over one trillion dollars. The brain-trust has sat idly by or devoted its resources to trivial pursuits like a ten-cent paper bag. The brain-trust is always "hacking at the branches." What's the point of letting people vote for taxes while at the same time letting the government rig the ballot in its favor?
We've reviewed many statewide ballot titles and summaries, both legislated and initiative. What is common to all is that the ballot title and summary is always written with the government's point of view whenever the government has a horse in the race. That's not to say that the government always likes the ballot title and summary. The Supreme Court had to set the Legislature straight when the Legislature tried to write the ballot title and summary for Proposition 1A (2008) in the act placing it on the ballot.
We've examined thousands of local measure ballot labels. The same viewpoint discrimination occurs in just about every instance.
While all statewide measure ballot titles and summaries are written by the attorney general's office, all local direct legislation ballot labels are written by, overwhelmingly, private public research firms.
TPGAA already has a strike against it with ballot title and summary prepared by the Attorney General's Office.
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT.
As anyone with a brain can clearly see, it takes the viewpoint of the government. Over all the years that the brain-trust has complained about attorney general ballot titles and summaries, the brain-trust has done nothing to change the law that permits this.
Ballotpedia lists the ballot labels for the 15 statewide measures on the November 5, 1996 ballot, which included Proposition 218 (below). The ballot label wasn't written with the proponents point-of-view. It could have simply said "Allows voters to approve local taxes, property-related assessments, fees, and charges." If the reserved powers of initiative and referendum are so precious, why are those powers hobbled by government interference on the ballot itself?
VOTER APPROVAL FOR LOCAL TAXES. LIMITATIONS ON FEES, ASSESSMENTS, AND CHARGES. INITIATIVE CONSTITUTIONAL AMENDMENT. Limits authority of local governments to impose taxes and property-related assessments, fees, and charges. Requires majority of voters approve increases in general taxes and reiterates that two-thirds must approve special tax. Assessments, fees, and charges must be submitted to property owners for approval or rejection, after notice and public hearing.
Based on the line of cases beginning with
Over the years the courts have created a presumption in favor of the attorney general's prose. The presumption is difficult to overcome, so most statewide initiative proponents of measures where the government has a viewpoint have just given up.
Even for local measure initiatives-by-voter-petition, either the local governing bodies or their paid agents get to write the ballot label.
Just to give you one example, here is a local initiative-by-voter-petition measure to repeal a sales tax where the city attorney wrote the ballot label. It's quite outrageous. We had tried to assist the elderly gentleman. He and his wife had worked to put the repeal on the ballot for more than three years and three separate petitions. (The first two petitions were rejected on technicalities.) In total, he had gathered over 25,000 signatures over the course of the three separate petition drives. The city-attorney-written ballot label wasn't disclosed until the city council meeting that approved the measure for the ballot, just days before the filing deadline. The Riverside County superior court dismissed his pre-election case. So much for "jealously guarding" the reserved initiative power. A CalFire local funded the campaign against it to the tune of $35,000 (all money exacted from tax payers in the standard government money-laundering operation). The vote was 36.35% yes and 63.65% no. He was screwed.
Shall the measure repealing the voter-approved, locally-controlled Measure DD sales tax generating over $10,000,000 per year in local funding that cannot be taken by the state be used to maintain Menifee 911 emergency response; school and police patrols; street and road repairs; traffic reduction; senior and yourth programs; parks and other general services, be adopted?
The voters who signed the petition likely didn't even recognize the measure because the ballot label wasn't even close to the circulating title and summary that they had signed. The ballot label used when the measure was adopted read:
Shall Ordinance 2016-199 of the City of Menifee to reduce traffic congestion; improve/repair local interchanges/overpasses/streets/roads/bridges/potholes; maintain local police/fire protection/paramedics/9-1-1 emergency response times; prevent cuts to senior/disabled/youth programs; and provide other general services by enacting a 1¢ sales tax providing $6.2 million annually until ended by voters; requiring annual independent audits, all funds spent locally, be adopted?Riverside County, Measure M, November 8, 2016.
Notice that Measure DD was a permanent 1% sales tax. What if the ballot label for the repeal had read: "Shall the measure to repeal the permanent 1% sales tax adopted in 2016 be adopted?" Is there any normal person who would contend that the vote would not have been different?
Did the elderly gentleman get any help from the brain-trust? You're kidding, right?
There's a relatively simple solution that shifts the burden imposed by the presumption on the statewide measure level and the shutout on the local measure level. Add a statute in the Elections Code that gives the initiative proponents the power to write their own ballot label, following the existing rules as to language that have been imposed on the government. The ballot label should be made part of the petition itself so that voters who sign the petition will already know how it will appear on the ballot, unlike today. If the state or local government doesn't like it, it can sue to get a judge to change it, just like the people have to do today. The difference is the shifting of the burden of proof from being placed on the people to the burden of proof being placed on the government.
What do you bet that the governments will be very picky prior to approving the petition for circulation that the proponents have "strictly" followed the rules?
As we have demonstrated, TPGAA overrides, by language in the Constitution, very good statutory language regarding local measure ballot labels. Our analysis lays out that few of TPGAA's goals are likely to be accomplished due to poor drafting. Not accomplishing a goal is one thing. Making something worse is another.
Let's look at the history of the brain-trust with regard to local measures. We've already discussed the local measure lawsuits the brain-trust has lost. Five of the six court rulings listing in Section 3 were local measures --
There have also been other local measures that the brain-trust has brought to court and lost. All these were the progeny of the
Let's look at Measure H. The H was specially requested by the county in violation of Elections Code 13116. H for Homeless, get it? The City of Los Angeles had just a few months earlier passed its $1.2 billion bond -- Measure HHH --- on November 8, 2016. That makes the marketing campaign easier. It required two-thirds vote because it was a special tax. It passed with 69.3% of the vote. As a special tax, it could be put on the ballot at any election, even an odd-year election like 2017.
There were 15 local measures on the ballot in Los Angeles County on March 7, 2017. The assigned letters were A, B, C, D, F, H, M, N, P, S, T, CC, LL, PS, SF. Do those letters look sequential?
The ballot label read:
To fund mental health, substance abuse treatment, health care, education, job training, rental subsidies, emergency and affordable housing, transportation, outreach, prevention, and supportive services for homeless children, families, foster youth, veterans, battered women, seniors, disabled individuals, and other homeless adults; shall voters authorize Ordinance No. 2017-0001 to levy a ¼ cent sales tax for ten years, with independent annual audits and citizens' oversight?
Since 1911, the Legislature has required local measure ballot questions to be in the form "Shall the ordinance (stating the nature thereof) be adopted?" The supervisors took sides in the election using public moneys to print and circulate all the ballots with an egregiously partisan ballot label. (The supervisors appoint the registrar in Los Angeles County.) The nature of the measure was "a sales tax for special purposes." Would more than two-thirds of the voters have voted for that? So, besides putting the campaign on the ballot, the supervisors spent millions for a full-blown campaign committee campaign.
For those who will quibble with our analysis due to the pre-election superior court decision regarding Los Angeles County, Measure M, November 8, 2016 (the Metro sales tax), both the lazy lawyers and the lazy judge didn't do the research. (More below.)
HJTA had filed both an FPPC campaign finance complaint and a lawsuit against Measure H. As part of the deal to settle with the FPPC, where HJTA got $675,000 of the $1,350,000 fine, the supervisors, who spent $8,000,000 (at least that's what they copped to) directly on the campaign were allowed to settle without admitting criminal or personal liability. HJTA agreed to dismiss its lawsuit as part of the deal. The settlement was announced with much fanfare and self-back-slapping on August 20, 2020. The president said "This fine by the FPPC will serve as a huge shot across the bow to all government entities in California not to abuse taxpayers by using public funds for political activity." "Huge shot across the bow?" Really? Who paid the fine?
In the same press release HJTA also announced its Public Integrity Project to be funded by its winnings. The president said "The creation of HJTF's Public Integrity Project will provide an additional enforcement tool against illegal expenditures of public funds and other violations of law that hurt taxpayers and voters." Meanwhile, the local governments are gleeful that the brain-trust is in charge of fighting taxes and fighting criminal misuse of public moneys.
So while the brain-trust made out like bandits, the tax payers of Los Angeles County were taken for nearly $10,000,000, not counting the cost of conducting the election itself. Plus they're still paying about $450,000,000 every year (or $4,500,000,000 total) until 2027. That's a pretty awesome return on investment, wouldn't you say?
So, surely the Public Integrity Project got right to work doing what the big guy said. Maybe not so much. In the item closing the lawsuit over Measure H, HJTA or HJTF kicked the can back to the voters.
If you believe a local government agency or school district is planning to use your taxpayer dollars to take a side in a campaign, please see our sample letters you can use to put them on notice here, or file a report with the FPPC AdWatch program here. If you believe the spending is already occurring, please supplement your letter with a Public Records Act Request using our sample request here.
As recently as February 3, 2024 (Jon Coupal: There's Election Fraud and Then There's Election Fraud, the HJTA president has continued to whine about the government taking sides in elections using public moneys. He starts off stating the law against it. Then he trumpets the great HJTA victory against Measure H (nearly 5 years ago).
The president writes that for TPGAA, "HJTA will be watching to make sure local governments don't use public funds to campaign against a November 2024 ballot measure, the Taxpayer Protection and Government Accountability Act, which includes important provisions to ensure that any tax increases are fully disclosed to voters and approved exactly as the state constitution requires, without loopholes or tricks."
Notice that he's only worried about local governments using public moneys to campaign against the brain-trust's statewide measure. What about local measures? Oh, that's the Public Integrity Project funded by $675,000 of public moneys extracted from the taxpayers of Los Angeles County. What has the Public Integrity Project accomplished since 2020. Anything? We don't know. The brain-trust's lips are sealed.
The brain-trust continues to be oblivious to the differences between statewide and local measures, using the statewide measure term "ballot title and summary." "Many California voters are irritated by the frequently deceptive "ballot title and summary" for measures that appear on their ballots. At the state level, these are prepared by the California Attorney General." So who writes them at the local level?
Are there any court battles on the horizon for the Public Integrity Project? Whatever battles there are they will likely only be about overt campaigns using public moneys. Why doesn't the Public Integrity Project go after the campaigns that are printed on the local ballots? Neither the brain-trust, nor TPGAA even recognizes that as a problem as evidence by Hiltachk's return to the order to show cause.
Here's an insider's tip. Do you know how to tell that the ballot label is the campaign supporting the measure? Because the ballot label has the same arguments contained in the formal argument in favor printed in the county voter information guide. Pretty simple, huh? It's not surprising because it was engineered to be that way.
Just to recap, the absolute worse part of TPGAA is Section 6 (Art. XIII C, Sec. 2(d)). It will wreak havoc on local measures, especially if tax payers go to court. It can't be fixed.
In 2015, the brain-trust got Assemblymember Jay Obernolte (R-San Bernardino) to sponsor a bill to add more disclosures to the ballot for local tax measures. AB809 was intended to be simple. It was simple. It amended Elections Code section 13119, which had originally been enacted as part of comprehensive procedural statutes in 1911. A Democratic Party Legislature and Governor enacted AB809.
Then came the November 8, 2016 election. In Los Angeles County, Measure M (the Metro tax) was on the ballot. During the mandatory public review period, the City of Carson and others challenged the ballot label in court under section 13119, which had been amended to now require on the ballot "the amount of money to be raised annually and the rate and duration of the tax to be levied."
The county lawyers latched on to the word "initiative" in the opening sentence of the statute and argued section 13119 didn't apply to a measure put on the ballot by the county. The judge, paid about $65,000 a year by the county supervisors, agreed. Neither the lazy judge or the lazy lawyers asked the question: If section 13119, doesn't apply, what section does? We can't be too harsh on the lawyers. It was an amended statute first effective in 2016 with only minimal legislative history. Up to that time, the number of initiative's by voter petition that levied a tax since Proposition 13 (1978) could be counted on one hand. There was no advantage, like a lower vote requirement. Why would the Legislature be bothering with an amendment that only applied to initiative's by voter petition? Why would the brain-trust be sponsoring it? The phantom initiative-by-voter-petition tax menace?
The brain-trust got wind of the trial court decision and got Obernolte to propose a "technical" amendment -- AB195. It was pretty clear that Obernolte was acting as a puppet for the brain-trust. He just took his marching orders and did what the brain-trust wanted. The judge on the Measure M case had changed the law that had been in existence for over 100 years at the time. Would you believe that the brain-trust made it worse. The "technical" correction changed the opening sentence to: "The ballots used when voting upon a measure proposed by a local governing body or submitted to the voters as an initiative or referendum measure ..." So, it's clear that no one did any research into why "initiative" was used in the first place. But it was made worse by adding "or referendum" to the list. We suppose that neither anyone in the Legislature nor in the Legislative Analyst's Office actually does any research either. Because the 1911 statutes on direct legislation implemented both the initiative and the referendum in the same statute, the reorganization of the Elections Code enacted two separate statutes, one for initiative and one for referendum which was at that time and today, section 13120. So, AB195 created a conflict between the two statutes that still exists today. The opening sentence of section 13120 reads: "The ballots used when voting upon a county, city, or district ordinance referred to the voters of the respective jurisdiction as a referendum measure ..." Section 13120 was slightly more generous with the ballot language mandating: "Shall the ordinance (stating the nature thereof, including any identifying number or title) be adopted?"
A still clueless Legislature, however, in AB421 (2023), enacted changes to the Elections Code under the urgency clause. Section 13120 was amended. What had been there since 1911 became subdivision (a). The new subdivision (b) changed the ballot language on statewide referendums, replacing "Yes" and "No" with "Keep the law" and "Overturn the law," respectively. Subdivision (a) was unchanged and still uses "Yes" and "No." So statewide referendums are now "modernized" whereas local referendums haven't changed.
The point here is that we not only have lazy lawyers and lazy judges, we have lazy Legislatures (well, we knew that all along) and a lazy Legislative Analyst Office. Luckily, local referendums are rare, because they are so hard to accomplish within the narrow 30-day window after a local ordinance is enacted. Except of course, for Ms. Wilde's referendum. In fairness, the brain-trust couldn't predict the Legislature's future descent into idiocy when it wrote TPGAA. It did, however, have direct knowledge about section 13119 and it should have known about section 13120.
No sooner was the "technical" amendment in effect on January 1, 2018, than the brain-trust sent a letter to Obernolte to work on repealing it. We suppose that some powerful interests were very unhappy with the newly minted section 13119.
As we were working on our March letter to 25 registrars with school bonds on the ballot for June 2018, we got wind of the repeal effort. We contacted Obernolte's office. We never got to talk to anyone in charge. His office referred us to HJTA. It was like a game of hot potato.
Frustrated, we prepared an article for the web site. No one at HJTA would talk to us either. Finally, we got the letter that HJTA had sent to Obernolte with HJTA's change of heart, also known as treachery. We ramped up our efforts. We tried to get press coverage. We don't recall exactly how we came up with Dan Walters, but he was usually critical of under-the-radar government activity.
We called Walters. He returned our call. We sent him the information he requested. Within a week, his column was published. It exposed the dirty little secret. HJTA had lost our trust. Now it had been exposed. All of a sudden we got calls from Obernolte's chief-of-staff and HJTA's lobbyist. We weren't going to budge. We had already collected the evidence for all the school bond measures for the June 2018 election. The C.A.S.H. cronies shad complied. Obernolte and HJTA caved.
Walters has now attuned to the issue. Without prompting from us, he picked up on a budget trailer bill in June 2018 that was going to repeal the amendments to section 13119. The key was that budget trailer bills go into effect immediately, so the repeal would be effective for the November 2018 election. He wrote another column about Christmas tree bills. The trailer bill went nowhere.
There have been other attempts to repeal the section 13119 amendment over the years. Most went nowhere. There was one that would have been enacted if another bill had been enacted first. The other bill failed.
The most serious threat was in 2019. The Legislature passed SB268 on September 17, 2019. We had been following it. We launched a campaign among our members to call Governor Newsom's office with reasons to veto. Newsom vetoed it on October 13, 2019. The Legislature couldn't override the veto. Where was the brain-trust on this? Hiding under their desks?
The answer to use of the word "initiative" that started all this was simple. The original enactment of section 13119 was Political Code 4058 (Stats. 1911 Ex.Sess.1, ch. 31, p.125) and Stats. 1911 Ex.Sess.1, ch. 33, p. 131. Over the Elections Code reorganizations in 1939, 1961, 1976, and 1994, the identical language for the ballot was pulled from the separate statutes for the county, city, and district direct legislation and placed in one code section in the Division on ballots. That's why the opening sentence, "The ballots used when voting upon a proposed county, city, or district ordinance ..." remained unchanged.
"Initiative" for local measures, unlike statewide measures, had always meant direct legislation by voter petition or by governing body resolution "without a petition." This was the key to whole
And it's not like the brain-trust hadn't been notified. Members of the brain-trust got the letters we sent to registrars in 2018. In connection with the Proposition C case, we had spoken to a brain-trust lawyer and sent the lawyer the actual text of the 1911 statutes and the reference to
At the same time that the brain-trust was fighting Proposition C, San Francisco's homeless initiative, we were fighting Proposition A, the $425,000,000 Embarcadero bond from the same election. Both cases had the same, go to, fixer judge Ethan Schulman, who gets about $16,000 a year from the San Francisco supervisors. His decisions on the cases were just a week apart.
After more than 100 years of remaining virtually unchanged, and never amended, the brain-trust pushed its amendment in 2015 and then had to "fix" it in 2017. Why? The glib response is for transparency. In all the years since Proposition 13 (1978), the brain trust has never once made an attempt to enforce section 13119, as written, in a court. "Shall the ordinance (now measure) (stating the nature thereof) be adopted?" Section 13119 does not give local governments the authority to put any language on the ballot other than "the nature of" the measure. With the amendments, that has been blurred.
We know from Hiltachk's return to the order to show cause that the brain-trust truly believes that the anything-goes ballot labels for local measures are perfectly acceptable and conform to the law. Get a dictionary. Look up "nature."
One of the major consequences of the passage of Proposition 13 (1978) was that it forced voter approval of local tax measures. Proposition 218 (1996) was supposed to fix its failure. Proposition 26 (2010) was supposed to fix it again. Now comes TPGAA supposing to fix it again.
When the Legislature started enacting statutes to implement all the new local tax measures, section 13119 remained unchanged. Had the brain-trust started enforcing section 13119 early on, local tax payers would never have been under constant assault. The brain-trust didn't. Even after getting it amended twice. We contend that local tax measure elections would be rare today, if the statute specifying the ballot label had been enforced. Why? Because the voters would actually have to pay attention to official materials in the county voter information guide or the campaign materials of the proponents and the opponents. Since shortly after 1978, but with certainty since 1995, the voters have been persuaded (electioneered) to vote yes just by reading the engineered ballot label. TPGAA not only does nothing to stop that, but also makes it worse. The brain-trust actually endorses the engineered ballot labels.
Now the brain-trust, with the funders desperate for relief, throws a hail-mary pass and puts the ballot label in the Constitution. One has to ask, are these people competent? But more importantly, are they really even on the side of tax payers? Or just out for themselves?
As the Bible advises, "By their fruits you will know them" (Matthew 7:20) as opposed to what they say. It's the opposite of "talk is cheap." The brain-trust, in our opinion has talked a good game, but like the overwhelming majority of politicians, their actions belie their words. They have proven to be secretive in matters of little consequence, while espousing transparency. We don't trust them. Perhaps, we've persuaded you that there is good reason for that distrust.
There is no way to save TPGAA. It is set in stone. It's a take-it-or-leave-it proposition.
Why, in three-and-a-half years since TPGAA was finalized, has the brain-trust not put pen to paper and explained how TPGAA will accomplish the vague claims it makes in its propaganda?
One explanation is that the voters are too stupid to understand it. Oops! Isn't that what Newsom's lawyer argued to the supreme court on May 8, 2024? "The voters simply don't have the capacity to [understand the complexities of taxes]."
Our take is that the brain-trust was able to sell a pig-in-a-poke to the uninformed funders. The funders were set up with a ray of hope. The funders relied on the brain-trust, despite its continued failures. The failures are explained by propaganda or lies, take your pick.
We consider TPGAA to be much like Measure D in San Bernardino County on November 8, 2022. The brain-trust appears to have taken a page from the corrupt board of supervisors who put it on the ballot.
AMENDMENTS TO THE SAN BERNARDINO COUNTY CHARTER FOR TAXPAYER PROTECTION AND GOVERNMENT REFORM Shall the amendments to the San Bernardino County Charter for taxpayer protection and government reform be adopted?
Or maybe it was vice-versa. The Measure D ballot label was written just days before the filing deadline during the summer when TPGAA was making news all over the state for its signature drive success. Why didn't TPGAA get a ballot label like that? Is it possible that people that say they want to fix the system really don't want it fixed?
2024-11-12Measure D was a fraud -- a "plainly illegal" election. The lawyers only knew writs. The lawyers argued bupkis.
The Red Brennan Group trusted their lawyers too. They got screwed. Twice. First with its hugely successful Measure K (
Had Red Brennan Group, the target of Measure D, not gone along with their lawyers, they might have forced a ballot label that didn't take the government's side in the election. You know, a ballot label that fully conformed to section 13119? You know, a ballot label like "Shall the measure to amend the San Bernardino County charter regarding supervisor term limits and supervisor pay be adopted?" Would the casual, low-information who reads just the ballot label have been persuaded to vote yes without the sales pitch? It didn't happen that way. TPGAA will not fix that.
The funders are already up against a ballot label that takes the government's side in the election using public moneys.
The funders own lawyer (the only named proponent for TPGAA) smells the money his firm can make on TPGAA. At oral argument against the writ on May 8, 2024, he is reported to have said. "Hiltachk said the case 'begs' for review after the election, as the justices only had speculation as to the act's effects currently."
The brain-trust has sat idly by for over 45 years while every one of the people (including every business that owns property) in California have been subjected to a barrage of local taxes exceeding one trillion ($1,000,000,000,000). No one had to argue about whether or not those were taxes. The local governments do what they do best. They cheated on the ballot. They got every registrar of voters in the state, along with all their staffs to go along with it. They got every county counsel in the state to go along with it, never once questioning anything that the local governments did in the purportedly impartial analysis. They got every district attorney in the state to look the other way and not charge the registrars or the legislative bodies or anyone else with the crimes they committed.
The problem is fixable. TPGAA won't fix it. TPGAA will make it worse. We're not talking about a 10-cent paper bag tax.
It is now the law in California that statewide initiative proponents can negotiate with the Legislature.
This is a great opportunity to use that process.
The recommendation is simple. The funders will withdraw TPGAA if the Legislature will withdraw ACA 13.
In our opinion, if that deal is accepted, it will be a win-win for the funders, but even more so for the people. Despite TPGAA's sunk costs, the funders will not have to fund two campaigns -- the one for TPGAA and the one against ACA 13.
No one has to know how bad TPGAA really is.
# # #