State Supreme Court Ruling May Threaten Longstanding Local Taxpayer Protections

A California Supreme Court decision makes it easier to raise some local taxes. But how much easier remains to be seen.

For two decades, local tax increases have usually been governed by Proposition 218, whether proposed by a local government agency or by citizen initiative.

Passed by voters in 1996, Proposition 218 requires voter approval of all local tax increases. The measure also mandates that tax proposals appear on general election ballots (as opposed to primary or special elections). More controversially, most local tax proposals require approval of two-thirds of the voters.

Supreme Court Ruling

In the case of California Cannabis Coalition v. City of Upland, the court by a 5-2 majority held that statutes proposed by voter initiative need not be held to the same procedural standards as statutes proposed by local government agencies.

While the court’s decision interpreted a longstanding taxpayer protection measure, and fomented a predictable spate of comments from both supporters and skeptics of Proposition 218, the decision itself was quite narrow. Whether this ruling will lead to the erosion of actual taxpayer protections, such as supermajority vote thresholds, must await future litigation not yet on the horizon.

The opinion by Justice Mariano-Florentino Cuéllar held that Proposition 218 “does not limit voters’ ‘power to raise taxes by statutory initiative.’ A contrary conclusion would require an unreasonably broad construction of the term ‘local government’ at the expense of the people’s constitutional right to direct democracy, undermining our longstanding and consistent view that courts should protect and liberally construe it.”


The court distinguished between the procedures that a local agency must comply with in approving a tax increase, which justices agreed is governed by Proposition 218, and the procedures a citizens’ initiative must comply with, which are not necessarily governed by Proposition 218. The court elaborated by analogy:

“As Ulysses once tied himself to the mast so he could resist the Sirens’ tempting song, voters too can conceivably make the clear and important choice to bind themselves by making it more difficult to enact initiatives in the future. The electorate made no such clear choice to tie itself to the mast here. Without a direct reference in the text of a provision—or a similarly clear, unambiguous indication that it was within the ambit of a provision’s purpose to constrain the people’s initiative power—we will not construe a provision as imposing such a limitation.”

Limited Remedy

The issue in Upland was whether the tax measure should be set for a vote in the general election, or at an earlier special election. Plaintiffs preferred the special election since it would more promptly enact the ordinance. Sponsors of Proposition 218 included the general election mandate to ensure the broadest possible electorate to consider tax matters.

Having established a procedural distinction between tax measures based on their provenance, the court left open the reach of this distinction. While the rhetoric was broad, the remedy was limited. The court ruled that the tax proposal should have been considered at a special election.

Special Taxes Approval

Timing of elections is one thing, but the procedural hurdle that really matters is the vote threshold. Proposition 218 requires special taxes be approved by a two-thirds supermajority. The court opened this question, but did not answer it.

Justice Leondra R. Kruger wrote, in a dissent joined by another justice:

“A tax passed by voter initiative, no less than a tax passed by vote of the city council, is a tax of the local government, to be collected by the local government, to raise revenue for the local government,” she wrote. “None of this could have been lost on the electorate that, also by initiative, amended the California Constitution to set ground rules for voter approval of local taxes.”

The sponsor of Proposition 218, Howard Jarvis Taxpayers Association President Jon Coupal, said, “If local initiatives are exempt from critical taxpayer protections, then public agencies could easily deny taxpayers their rights by colluding with outside interests to propose taxes in the form of an initiative, then submitting a tax under a lower vote threshold than that currently mandated by the constitution.”

For a Future Case

Others believe any change in voter approval thresholds are down the road. Michael Coleman, an adviser to the League of California Cities, wrote on Twitter that the “case did NOT concern voter thresholds. Vote requirements remain pending a future case.”

The attorney who successfully prevailed in the Supreme Court agreed. Roger Jon Diamond said: “I believe that this does not affect one way or the other whether you need a two-thirds vote or simple majority.”

Contact: Loren Kaye