Judge rules a simple majority, not two-thirds supermajority, is enough for San Francisco’s 2018 citizen-initiated special tax measures

San Francisco Superior Court Judge Ethan Schulman ruled Friday that two measures (both called Proposition C) on the San Francisco ballot in June and November of 2018 were properly certified as approved by city officials. Schulman ruled that the measures proposing tax increases for specific purposes required a simple majority for approval because they were put on the ballot through a citizen signature petition.
The ruling stated that the two-thirds supermajority vote requirement for local special taxes in California applies to tax measures referred to the ballot by lawmakers, but not to citizen initiatives. Rex Hime, president of the California Business Properties Association and representing the Howard Jarvis association and the California Business Roundtable, said that plaintiffs would immediately appeal the ruling.
California voters approved statewide Proposition 218 in 1996, adding Article XII C: Voter Approval For Local Tax Levies to the California Constitution. The article includes the requirement that local governments may only enact, extend, or increase a special tax with a two-thirds (66.67 percent) supermajority vote of the electorate. Following the passage of Proposition 218, the two-thirds supermajority vote requirement was applied to legislative referrals and citizen initiatives.
In August 2017, however, the California Supreme Court ruled in California Cannabis Coalition v. City of Upland that one requirement contained in Article XIII C—that certain tax measures must be put on the ballot during general elections—did not apply to citizen initiatives. The court categorized taxes imposed by citizen initiatives as separate from taxes imposed by local governments. This ruling brought the two-thirds (66.67 percent) supermajority vote requirement into question for special taxes proposed through citizen initiatives.
In June 2018, 50.9% of city voters approved a citizen initiative to authorize an additional tax on the lease of commercial property for landlords with annual gross receipts over $1 million to fund childcare and early education programs. In November 2018, 61.3% of city voters approved a measure authorizing the city and county of San Francisco to impose a gross receipts tax on business to fund homelessness services.
 City and county officials in San Francisco argued that the court’s 2017 decision meant that a simple majority—not a two-thirds supermajority—was required for the approval of local citizen initiatives, including tax measures that designate funds for specific purposes. The city certified the 2018 measures and is collecting the June and November Proposition C taxes but is holding the tax revenue until legal disputes are concluded.
Christin Evans, a supporter of November’s Proposition C, said, “Obviously, we’re thrilled. We felt that Prop. C was on firm legal ground from the beginning, and the judge’s opinion left no question that voter-led initiatives will be possible going forward to allow the people to help shape city policy.”
Rex Hime said, “We are disappointed in today’s ruling but will continue to fight to uphold the will of the voters. Prop. 13 and Prop. 218 are unambiguous — voters want a two-thirds vote requirement for special taxes. We will be filing an immediate appeal.”
At least five other local special tax measures, including a third measure in San Francisco, were put on the ballot by citizen initiative petitions and were approved by more than 50% but less than two-thirds of voters.
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