When local governments "increase" a local tax, voter approval is required under Proposition 218. All an agency supplying any service would need to do to circumvent article XIII D, section 6, subdivision (b)(3), would be to establish a low legal base use for that service, pass an ordinance to the effect that any usage above the base amount is illegal, and then decree that the penalty for such illegal usage equals the incrementally increased rate for that service. In some instances, it may be necessary to make written requests under the California Public Records Act. XIII D (Proposition 218), This page was last edited on 1 December 2020, at 17:45. [59] However, groundwater fees imposed upon parcels of property may still be subject to the requirements of Proposition 218. [62] The 2017 California Supreme Court decision disapproved two previous Court of Appeal published decisions[153][154] holding that a fee on the extraction of groundwater was a property-related fee under Proposition 218. When an agency "extends" a property-related fee or charge, compliance with the property-related fee or charge process under Proposition 218 is required. [100] That constitutional two-thirds voter approval requirement under Proposition 13 is independent of Proposition 218 tax restrictions. Responses may take the form of not levying the property-related fee or charge or modifying the property-related fee or charge to make it more acceptable to the public. Based on historical election statistics, once local government voters pass a "temporary" tax, it is generally easier to obtain subsequent voter approval for a tax extension or a tax increase. While lifeline utility rate programs are intended to protect low income individuals, many other utility customers who don't qualify for lifeline programs are adversely impacted by significant utility fee and charge increases by local water agencies. Proposition 218 does not require that a protest document for a proposed property-related fee or charge be included with the required written notice. This conclusion is also consistent with the rule of interpretation that exceptions to the general rule of a law be strictly construed. Const., art. Cal. Const., art. Government entities subject to Proposition 218 are local and regional governments, including counties, cities, a city and county, school districts, community college districts, public authorities, joint powers agencies, and special districts such as water or fire districts. Cal. However, Proposition 218 does not require an engineer's report be made available in an electronic format. Const., art. Groundwater augmentation fees imposed upon persons are generally no longer deemed property-related fees or charges but rather are subject to protections under Proposition 26. It is generally preferable to obtain the performance data in electronic format to facilitate further study and analysis. [267], Hertzberg sought to "clarify" the California Constitution so that it will be easier for local governments to impose fees and charges to pay for stormwater programs and services by also exempting stormwater fees and charges from the constitutional election requirement under Proposition 218. [138] Under the express language of Proposition 218, the foregoing exceptions are limited to laws existing at the time Proposition 218 became law. [134] Article XIII D relates primarily to special assessments on real property and property-related fees and charges. [57] As a practical matter, this means all parcel taxes (taxes on real property not based on the assessed value of the property) must be levied as special taxes subject to two-thirds voter approval. As an accountability mechanism, a regional governmental levy can generally be reduced or repealed using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder. Proposition 218 expressly applies to regional governments in California under its broad "local government" constitutional definition. [56] The type of tax a local government imposes (general or special) is legally significant because it determines the applicable voter approval requirement. However, prior to Proposition 218, a majority protest typically required an absolute majority of property owners (often using a weighted formula) to protest against a proposed assessment. Const., art. (a), par. [232], The fourth requirement is intended to add a temporal component to the property-related fee or charge restrictions. However, since property-related fees and charges are limited to the cost of providing the service to each parcel of property,[162] Proposition 218 prohibits local agencies from overcharging utility customers for property-related services such as water, sewer, and refuse collection to pay for lifeline utility rate programs. Const., art. Cal. Il implique des exigences pour les évaluations spéciales sur des biens immobiliers, les taxes de propriété et les frais de fournisseurs de service imposées aux gouvernements locaux[10]. (d). Proposition 218 created a new type of fee or charge known as a property-related fee or charge. It is common for local governments to spend significant amounts of public funds to lobby for or against proposed legislation that is contrary to the best interests of taxpayers, including supporting legislation that would erode taxpayer protections such as Propositions 13 and 218. [56], During the November 2010 General Election, California voters passed Proposition 26 which, in part, added a broad constitutional definition of "tax" for purposes of Proposition 218. (2). If a property owner does not properly return an assessment ballot, that fact will not count for or against the proposed assessment. While elimination of the assessment exemption applies to all levels of government, there may be instances where federally owned property, due to restrictions under federal law which Proposition 218 cannot legally override, will continue to be exempt from assessments. Proposition 218 also requires an agency to separate the general benefits from the special benefits conferred on a parcel. The Great Proposition 218 Challenge Prop 218 (1996) and the Prop 218 Omnibus Implementation Act (1997) block funding stormwater programs in California. Const., art. [129] Information that is available includes the amount spent on lobbying activities, the names of the lobbyists, and the specific legislation/agencies lobbied. Under Article XIII C, a local government may not impose, extend, or increase any general tax unless the tax is first submitted to the electorate and approved by a majority vote. California Proposition 218, the Voter Approval Required Before Local Tax Increases Initiative, was on the November 5, 1996 ballot in California as an initiated constitutional … An example application of the foregoing to an unresolved legal issue is when utility rates are increased in local governments having a related utility users tax. The substantive requirements for assessments are contained in constitutional provisions of dignity at least equal to the constitutional separation of powers provision. Except for fees or charges for sewer, water, or refuse collection services, no property related fee or charge may be imposed or increased unless and until that property-related fee or charge is submitted and approved by a majority vote of the property owners of the property subject to the property-related fee or charge or, at the option of the agency, by a two-thirds vote of the electorate residing in the affected area. 218 Lawyers Fighting for Ratepayers and Taxpayers. This can include controversial purposes such as financing high public employee salaries and benefits or paying for excessive public employee pension obligations. XIII D, § 4, subd. Proposition 26 amended Proposition 218 by adding a broad constitutional definition of a "tax"[59] for purposes of determining the scope of levies subject to the voter approval requirement for local taxes under Proposition 218. To the extent that previously approved tax "modernization" measures are interpreted to include taxes on online video streaming services, voters/taxpayers have an available legislative remedy using the local initiative power under Proposition 218 to reduce or repeal any tax on online video streaming services. California law allows local governments to spend taxpayer funds to lobby in support of such legislative proposals in the California Legislature either directly[130] or indirectly through local government interest associations such as the League of California Cities, the California State Association of Counties, and the Association of California Water Agencies. More patient local governments are also willing to wait another election cycle for a more favorable election date to increase the chances of passing a local tax. The impartial person may use technological methods to tabulate the ballots, including, but not limited to, punchcard or optically readable (bar-coded) ballots. "[27] The credit ratings issue became so heated during the Proposition 218 election campaign that the California State Treasurer, in an effort to calm the municipal bond market, took the extraordinary step of warning measure opponents against exaggerating the possible negative impacts on local government credit ratings and bond issuances when discussing Proposition 218. For example, if a city's general fund is used to pay for some water utility overhead costs, a transfer of revenue to the general fund is legally permitted. How the ballot question is written can affect the outcome of a tax election. Cal. As a result, there exists significant variation in sales tax rates in local jurisdictions throughout California. [177], Every notice mailed to owners of identified parcels within an assessment district must also contain an assessment ballot which includes the agency's address for receipt of the assessment ballot once completed by any record owner receiving the notice whereby the record owner may indicate his or her name, reasonable identification of the parcel owned, and his or her support or opposition to the proposed assessment. vi–viii, 43–45. Cal. The ballot must remain sealed until the ballot tabulation starts. [197] Thus, even the California Legislature cannot enact statutes that narrow or undermine the constitutional protections under Proposition 218. GIS data files may also be used in connection with the calculation of property-related fees and charges under Proposition 218 such as utility or stormwater fees. Polling from the Proposition 218 opposition campaign revealed the measure was expected to lose by about 15 percentage points. The engineer's report is a critical document in the assessment process because it contains the detailed supporting basis for levying the assessment. They hit upon assessment districts, which … A true general tax under Proposition 218 can generally be spent on public services or programs that are not deemed "vital" by a local government. Comparative lobbying data with other lobbyist employers, including other local governments, can also be obtained. After approval of an assessment, the local initiative power under Proposition 218 can generally be used to reduce or repeal that assessment. The assessment procedures and requirements are designed to ensure that any special assessment levied by an agency is a legitimate special assessment. Local agencies often provide financial assistance to low income customers in the form of lifeline utility rates. (b). Multiple tax measures on the same ballot can sometimes lead to overwhelming tax burdens to the point where voters end up voting against all tax measures. XIII D, § 1, subd. This Notice is a part of that process. XIII D, § 3, subd. This includes for purposes of properly designing a tie-in initiative and for targeting alternative revenue sources for reduction or repeal utilizing a compensatory initiative. [1][2] Called the "Right to Vote on Taxes Act,"[3] it was sponsored by the Howard Jarvis Taxpayers Association as a constitutional follow-up to the landmark property tax reduction initiative constitutional amendment, Proposition 13, approved in 1978. California Secretary of State, Statement of Vote November 5, 1996, pp. [54] A "special tax" is any tax imposed for specific purposes, including a tax imposed for specific purposes which is placed into a general fund. However, legal issues arise under Proposition 218 when local agencies seek to raise stormwater revenues in the form of a new or increased fee or charge without voter approval. An example where such an initiative may be appropriate involves inequities that occasionally occur from the weighted ballot requirement for assessments, particularly in assessment districts containing a large number of publicly owned parcels. This includes local government performance data which can give taxpayers/voters a better sense if they are getting good value for the government services or programs to be financed from a Proposition 218 tax measure or their existing tax dollars. If a tax is proposed by a local government, it is important to consider the budgetary conditions that led to placing the tax measure on the ballot. Cal. [214], If a fee or charge is not "property-related" under Proposition 218, it may be subject to voter approval as a "tax" under Proposition 26 which California voters approved in 2010. [118] However, this is generally done by local politicians in an effort to avoid political accountability for supporting a tax on the merits. This provides a strong disincentive to legally challenge the assessment ballot process under Proposition 218. [197] Property owners rarely won assessment lawsuits on the merits prior to Proposition 218. 4th 205 (July 2006). (a). In nearly every Proposition 218 appellate court case of significance, local government interests, including the League of California Cities, the California State Association of Counties, and the Association of California Water Agencies have sought to limit the scope and application of Proposition 218 restrictions by arguing in favor of narrow or strict interpretations of the taxpayer protections. A properly levied utility rate increase can be applied for purposes of generating increased utility revenues, but if those increased utility rates are also applied for purposes of generating increased utility user tax revenues, that might be a tax "increase" for purposes of triggering the voter approval requirement under Proposition 218. XIII C, § 2, subd. If the agency uses agency personnel for the ballot tabulation, or if the agency contracts with a vendor for the ballot tabulation and the vendor or its affiliates participated in the research, design, engineering, public education, or promotion of the property-related fee or charge, the ballots must be unsealed and tabulated in public view to permit all interested persons to meaningfully monitor the accuracy of the ballot tabulation process. Local governments frequently coordinate the scheduling of their tax elections to increase the chances of multiple tax measures passing over a short time window. 177–200. The California Department of Tax and Fee Administration provides sales tax rates for local governments on its website. Cal. [103] The legal authority to levy a local government tax (known as enabling authority) must come from an independent legal source such as a statute enacted by the California Legislature, and may be subject to additional statutory restrictions. [247] Nevertheless, most property-related fees or charges fall within an election exemption as typical utility fees for water, sewer, or refuse collection services. A majority protest exists if, upon the conclusion of the required public hearing, assessment ballots submitted in opposition to the proposed assessment exceed the assessment ballots submitted in favor of the proposed assessment. Some local agencies also use existing revenues from stormwater fees and charges imposed without voter approval before Proposition 218 became law when an election was not legally required at that time. Ballot Pamphlet, California General Election (November 5, 1996), Rebuttal to Argument Against Proposition 218, p. 77. In practical terms, a tax is "increased" under Proposition 218 if the math behind it is altered so that either a larger tax rate or a larger tax base is part of the calculation.[65]. Proposition 218 has been part of the California Constitution for 24 years, 1 month. The California Supreme Court has held that a local government must comply with any applicable statutory requirements as well as the constitutional requirements under Proposition 218.[104]. Only one written protest per parcel, filed by an owner or tenant of the parcel, may be counted in calculating a majority protest to a proposed new or increased property-related fee or charge. The California State Controller makes extensive and detailed local government financial data available on its Government Financial Reports Data website. [109] Payment of a fee covering the direct costs of duplicating any requested pages from a property-related fee or charge report may also be required. [125] Current and historical tax rate data are provided. [203], The Silicon Valley Taxpayers case profoundly changed the legal environment in California as it relates to constitutional taxpayer protections. As a result of the two-thirds voter approval requirement for local taxes under Proposition 13 being strictly construed, local governments in California were able to impose many local tax increases with either simple majority voter approval or no voter approval at all. Prop 218: Water Capacity Charges, Richmond v. Shasta CSD . Cal. XIII C, § 2. BY ALLISON LEVITSKY Daily Post Staff Writer A woman is waging a class-action lawsuit against the city of Palo Alto, claiming that residents and businesses have been hit with illegal . A local initiative to reduce or repeal the assessment is an available remedy to address such an inequity. Prop. Ballot arguments must generally be filed early in the election process. Section 1 definitions include the term "local government" setting forth the public entities subject to the article. [192] However, Proposition 218 shifted the burden of demonstrating compliance to the local agency in any lawsuit challenging a property-related fee or charge. Cal. [155] In addition, fees on the extraction of groundwater are generally subject to reduction or repeal using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder. [64], The voter approval requirement for taxes under Proposition 218 is triggered when a local government "imposes," "extends," or "increases" a tax. [10] The California Legislature adopted a statute interpreting the term "increase" as applied to property-related fees or charges. Code, § 53753, subd. Those Articles impose certain notice and hearing requirements on property-related charges and fees (i.e., rates) levied by local government agencies. General enhancement of property value does not constitute 'special benefit. Flawed Engineering Report Dooms Prop. [163] As a result, the State of California must pay its fair share of any special assessment on real property lawfully levied pursuant to Proposition 218. In extraordinary circumstances, especially when there is great hostility by local politicians in any matter relating to the approval of a property-related fee or charge (or any other levy subject to the requirements of Proposition 218), exercise of the local recall power is also generally an available option to local voters. [145] Based on the court's reasoning, fees and charges for ongoing sewer and refuse collection services are also "property-related."[152]. If this occurs, often the only practical remedy available to voters is to make the matter a political issue during the tax measure election campaign which can adversely impact the chances of the local tax measure being approved by the voters. Los Angeles County Registrar-Recorder, Citizens for Voters' Rights (No on 218), Form 419 Ballot Measure Committee Campaign Disclosure Statements. Special purpose districts or agencies, including school districts, have no power to levy general taxes and can only impose special taxes. California State Administrative Manual Management Memo MM 05-17, Assessments Levied by Local Government Agencies. [167] The foregoing requirement is important to facilitate independent analysis of electronic data files by the public for purposes of verifying Proposition 218 compliance. [190] Furthermore, since only special benefits are assessable under Proposition 218, voters residing within the boundaries of an assessment district who do not own property within the assessment district are also not deemed under the California Constitution to have been deprived of the right to vote for any assessment. 218 constitutional election exemption applicable to sewer and water service with a mere statute to allow for stormwater to be included under the definition of "sewer," meaning that stormwater fees and charges would no longer be subject to a Proposition 218 election.[270]. [74] While expanding the geographic area subject to a property-related fee or charge may not constitute an "extension" under the statutory definition, it may constitute a property-related fee or charge "increase" and thereby subject the levy to the property-related fee or charge process under Proposition 218 on that basis.[70]. (c). 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