PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 09/05/2023
SUBJECT:
TITLE
CONSIDER AUTHORIZING MAYOR TO EXECUTE A LETTER OF SUPPORT FOR ASSEMBLY CONSTITUTIONAL AMENDMENT (ACA) 13 (WARD) REGARDING VOTING THRESHOLDS FOR CERTAIN INITIATIVE MEASURES AND SUBMISSION OF ADVISORY QUESTIONS TO VOTERS
CEQA: This is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Authorized by Minute Action
Body
Compliance statements
FY 2023-25 Council Priority Workplan Compliance Statement
Under Major Policy Goal; Economic Development and Diversification, Policy No.403 - Create a Sustainable Economic Ecosystem; and Policy No. No.405 - New Revenue Enhancements are adopted policies contained in the FY 2023-25 Council Priority Workplan, effective May 1, 2023.
BACKGROUND
Proposed ACA-13 (Ward Legislation
On August 22, 2023, the League of California Cities (Cal-Cities) requested support from local cities on the proposed Assembly Constitutional Amendment (ACA) 13 (Ward) measure. On this date, the State Assembly Elections Committee passed ACA-13 (Ward) on a 5-2 vote, with one (1) member abstaining. At time of agenda preparation, the proposed measure will now be expedited to the State Assembly Appropriations Committee before moving to a floor vote and crossing over to the Second House, if approved.
The proposed ACA-13 measure requires an initiative constitutional amendment to comply with any increased voter approval threshold that it seeks to impose on future ballot measures. Additionally, the measure guarantees in the State of California Constitution, the ability of local governments to submit advisory questions to voters.
This measure was introduced in response to the Taxpayer Protection and Government Accountability Act (Act), which seeks to raise vote threshold requirements for the passage of state and local tax measures, and imposes a stringent burden of proof standard that local governing bodies must meet when modifying or increasing all taxes and fees by justifying their use, need, and duration. The Act has qualified for the November 2024 ballot and is sponsored by the California Business Roundtable, Howard Jarvis Taxpayers Association, and its affiliates. If passed by voters state-wide, the measure would make it extremely difficult for local governments to maintain existing tax revenues and modify them in the future.
The Author and proponents of ACA-13 have made it clear that they intend to qualify this proposed constitutional amendment for the March 2024 Primary Election in order for it to impact the required voter approval threshold for the Taxpayer and Government Accountability Act scheduled on the November 2024 state-wide ballot.
Lead opponent of the ACA-13, the Howard Jarvis Taxpayers Association, argued that the ACA-13 measure would impact the feasibility of passing the Act on the November 2024 ballot, and thus, would impact the feasibility of raising the voter threshold for local citizen initiative special taxes to a two-thirds vote, which was overturned and reinstated to a simple majority vote pursuant to a recent court case: California Cannabis Coalition v. City of Upland S234148 (Cal. Nov. 1, 2017).
Ultimately, ACA-13 does not impact current tax rates nor would it impact thresholds already established under Propositions 13 and 218, and similar initiatives have already been implemented in other states (i.e. State of Oregon), with little unintended consequences. Further, the author of ACA-13 noted that the measure is not meant to be interpreted to apply to all changes to voter approval thresholds, just measures that seek to increase voter approval thresholds above a simple majority.
To date, Cal-Cities indicates that the following state-wide organizations have joined in supporting ACA-13, with more to join over the next few weeks:
• SEIU California;
• California Professional Firefighters;
• AFSCME;
• California Labor Federation;
• California Teachers Association (CTA);
• California Federation of Teachers;
• California School Employees Association;
• California State Association Counties (CSAC);
• California Special Districts Association (CSDA);
• Catalyst California; and
• Courage California
Previous City Council Action
The City Council previously adopted Resolution No. 2023-027 on March 6, 2023 which officially opposed the Act. (See Attachment). In summary, the Act (if approved by voters state-wide) would create numerous consequences for local governments and local voters including, but not limited to the following:
1. CONSTITUTIONAL AMENDMENT. For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters’ ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds requirement.
2. Eliminates voters’ ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax. Expands definition of “taxes” to include certain regulatory fees, broadening application of tax approval requirements. Requires Legislature or local governing body set certain other fees.
3. Lowers annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.
4. Sets new standard for fees and charges paid for the use of local and state government property. The standard may restrict the amount oil companies, utilities, gas companies, railroads, garbage companies, cable companies, and other corporations pay for the use of local public property.
5. Requires voter approval to expand existing taxes (e.g., utility user tax, use tax, hotel tax) to new territory (e.g., annexation) or expanding the base (e.g., new utility service). This would require additional tax measures and may deter annexations and land development in cities.
6. Precludes City charters from being amended to include a tax or fee.
7. Allows new taxes to be imposed only for a specific time period.
Voids taxes adopted after January 1, 2022, that do not comply with the new rules, unless reenacted. The above list is not designed to be exhaustive; but, rather is an initial representation of the contents of the state-wide initiative that may directly impact cities, and any future funding mechanism contemplated to fund local services.
FISCAL IMPACT
While both ACA-13 and the Act, if adopted, would have significant fiscal impacts on the City, there is no fiscal impact associated with this agenda item.
Attachments:
Att A - City Council Resolution No. 2023-027 adopted on 03/06/2023
Att B - ACA-13 (Ward) Proposed Measure
Att C - Proposed Letter of Support from Mayor Pineda for ACA-13