1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Application of Proposition 218 Tax Restrictions to Local Initiatives
In addition, in Howard Jarvis Taxpayers Association v. City of San Diego, 120 Cal. App. 4th 374, 390–394 (July 2004) Proposition 218 voter approval tax restrictions were previously applied to invalidate an initiative measure approved by the electorate exercising the local initiative power that would have required two-thirds voter approval for any general tax proposed by the San Diego City Council, instead of the majority vote approval required under Proposition 218. The California Cannabis Coalition decision did not disapprove or otherwise disturb the 2004 City of San Diego appellate court decision.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Legal Authority to Impose Local Taxes
Proposition 218 does not legally authorize any local government to impose any tax. 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. 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.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Legal Authority to Impose Local Taxes
An example of an additional statutory restriction is a supermajority vote requirement of the governing body of the local government to place a local tax measure on the ballot. Another example of an additional statutory restriction is that many parcel taxes must be applied uniformly to all taxpayers or real property.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Temporary vs. Permanent Taxes
Under Proposition 218, taxes proposed by a local government may either be temporary or permanent. If a tax is temporary, voter approval is required to extend a tax beyond its expiration date. Permanent local government taxes continue for an indefinite period of time. However, such taxes can be reduced or repealed by either subsequent action of the local governing body itself or by the voters exercising the local initiative power under Proposition 218.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Temporary vs. Permanent Taxes
Some ballot questions may not specify the duration of a tax, including if a proposed tax would be permanent. In such situations, either the impartial ballot measure summary and/or the full text of the tax measure will specify the duration of a proposed tax. Generally, if no tax duration is specified in the ballot question, the proposed tax is usually permanent.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Temporary vs. Permanent Taxes
The Howard Jarvis Taxpayers Association states that some local governments, in an effort to increase the chances of passing a tax, will propose a temporary tax instead of a permanent tax. The general strategy is once a temporary tax passes, it will be easier for the local government to either extend or increase an already existing tax in the future. 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.


1996 California Proposition 218, Article XIII C – Local Government Taxes, Voter Approval Requirements and Related Provisions for Local Taxes, Temporary vs. Permanent Taxes
The Howard Jarvis Taxpayers Association also states that local governments rarely allow temporary taxes to expire on their own without at least an effort to extend and/or increase the tax, and that voters should assume that any proposed temporary tax will not end at the specified expiration date, but will instead either be extended for an additional period of years or be made permanent.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections
Local government issues related to Proposition 218 elections can impact the integrity and fairness of the election process.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Opinion Polling Before Placing a Tax Measure on the Ballot
Local governments frequently conduct opinion polling of their voters before deciding whether to place a local tax measure on the ballot. Opinion polls may also be conducted in connection with other revenue sources requiring an election under Proposition 218 such as for a property-related fee or charge or an assessment on real property.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Opinion Polling Before Placing a Tax Measure on the Ballot
The expenditure of public funds to conduct opinion polls is generally permissible under California law. The use of public funds to conduct opinion polling concerning a local tax proposal becomes more controversial when the poll also includes questions of a political nature ordinarily utilized in a subsequent election campaign (e.g., testing support and/or opposition arguments for use in a subsequent tax election campaign) as opposed to merely providing sufficient information to local government officials for purposes of determining whether to place a tax measure on the ballot.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Opinion Polling Before Placing a Tax Measure on the Ballot
An opinion poll prepared by a local government is generally a "public record" whereby a member of the public may make a written request and receive a copy of the opinion poll under the California Public Records Act. Payment of a fee covering the direct costs of duplicating any requested pages from an opinion poll may also be required by the local government.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Opinion Polling Before Placing a Tax Measure on the Ballot
California courts have generally been lenient in allowing local governments to spend public funds in connection with activities (such as conducting opinion polling) before a tax proposal is placed on the ballot. Some voters may question the appropriateness of local governments spending public funds on opinion polling in connection with a local tax measure, especially if the polling results are subsequently used for political purposes during the election campaign to increase the chances of a local tax being approved by the voters. 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.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Government "Informational" Campaigns in Local Tax Elections
Local governments are legally prohibited from spending public funds and resources to campaign in support of tax measures required to be submitted to the voters under Proposition 218, but local governments are allowed to expend public funds to engage in "informational" campaigns that educate voters about such tax measures. California courts have generally been lenient in allowing local governments to engage in informational campaigns in connection with local tax measures.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Government "Informational" Campaigns in Local Tax Elections
Some voters may question the appropriateness of local governments spending taxpayer funds on informational campaigns in connection with local tax measures, particularly when the intent and practical effect of such informational campaigns is to increase the chances of a local tax measure being approved by the voters. When questionable or controversial informational campaigns occur, often the only practical remedy available is to make such informational campaigns a political issue during the tax measure political campaign which can adversely impact the chances of the local tax measure being approved by voters.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Government "Informational" Campaigns in Local Tax Elections
The Howard Jarvis Taxpayers Association has released a document to assist taxpayers in matters relating to campaign spending by a local government.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Ballot Questions in Local Tax Elections
Local governments in California are generally allowed to write the ballot question for tax elections required under Proposition 218. The ballot question is the actual text that appears on the election ballot when voters cast their vote on a tax measure. How the ballot question is written can affect the outcome of a tax election. Issues often arise concerning the impartiality of ballot questions prepared by local governments that support tax measures they submit to the voters.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Ballot Questions in Local Tax Elections
California courts have generally allowed local governments significant leeway in preparing tax election ballot questions. Ballot questions can sometimes be misleading to many voters or may include incomplete information regarding the specifics of a tax measure. Local governments also sometimes "poll test" their ballot questions in an effort to further increase the chances of passing a tax measure. This process involves conducting polling before officially calling an election to determine the specific ballot measure language that yields the highest level of voter support.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Ballot Questions in Local Tax Elections
When controversial ballot questions are prepared by local governments, often the only practical remedy available to voters is to make the controversial ballot question a political issue during the tax measure political campaign, including informing voters about the specifics of the ballot controversy.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Ballot Questions in Local Tax Elections
Effective January 1, 2018, if a proposed local government measure imposes a tax or raises the rate of a tax, the ballot must include in the statement of the measure to be voted on the amount of money to be raised annually, the rate of the tax, and the duration of the tax to be levied. The statement of the tax measure must be a true and impartial synopsis of the purpose of the proposed tax measure, and must be in language that is neither argumentative nor likely to create prejudice for or against the tax measure. The statement requirement applies regardless of whether the tax measure is proposed by the local governing body or is submitted to the local voters as an initiative or referendum measure.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Politicians "Letting the Voters Decide"
The voter approval requirements for local taxes under Proposition 218 are mandatory. Thus, local politicians place tax measures on the ballot for voter approval not by a voluntary choice in support of protecting local taxpayers, but rather in response to the constitutional mandates of Proposition 218.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Politicians "Letting the Voters Decide"
In addition, when local politicians vote to place a local tax measure on the ballot, they are also approving that tax on the merits. This is typically done in the form of a local ordinance or resolution approving the tax. However, the tax approval does not become effective unless and until approved by the voters.


1996 California Proposition 218, Local Government Issues Related to Proposition 218 Elections, Local Politicians "Letting the Voters Decide"
Local politicians sometimes claim they are merely "letting the voters decide" when they vote on a tax proposal that would levy a new tax, a tax increase, or a tax extension. However, this is generally done by local politicians in an effort to avoid political accountability for supporting a tax on the merits.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections
Voter/taxpayer issues related to Proposition 218 elections can impact the individual voter decision-making process as well as election outcomes.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections
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.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Tax Increases and Public Employee Costs
As public employee salary and benefit obligations increase over time, particularly with regard to pensions and public employee retiree healthcare, the impacts on the local government budget become more significant and can even lead to bankruptcy. Local politicians end up having to reduce public services and/or raise taxes or other revenues such as fees and charges. To the extent that taxes are raised, the tax proceeds will generally either directly or indirectly pay for public employee salary and benefit obligations. Research has shown that many local tax increases are concentrated in California communities that have the largest public employee pension problems.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Tax Increases and Public Safety
Some local governments may also claim a lack of sufficient funding for priority programs and services such as public safety. This is intended to make a tax proposal more politically attractive.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Tax Increases and Public Safety
The California Constitution mandates that the "protection of the public safety is the first responsibility of local government and local officials have an obligation to give priority to the provision of adequate public safety services." This constitutional obligation exists regardless of whether a local tax measure is approved by voters.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Cumulative Tax Burdens and Precedent
Some local government tax proposals may be relatively modest in amount, but when added to other taxes currently paid would result in a cumulative tax burden that may be unacceptably high. This is especially the case concerning regressive parcel taxes that disproportionately burden homeowners. Before voting on any local government property tax measure (including any local general obligation bond measure that increases local property taxes to repay the bonds), it is considered a good practice by voters to review their current property tax bill to get a better picture of the cumulative impact of any property tax measure.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Cumulative Tax Burdens and Precedent
It is also not unusual for multiple tax proposals to appear on the same election ballot. This not only includes tax proposals from other local governments but sometimes even multiple tax proposals from the same local government. 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.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Cumulative Tax Burdens and Precedent
To avoid significantly higher levels of taxation than expected, voters also need to consider local tax proposals that are likely to appear on the ballot in the near future. Local governments frequently coordinate the scheduling of their tax elections to increase the chances of multiple tax measures passing over a short time window. For example, local tax measures may be placed on the ballot during a statewide primary election in coordination with other local governments placing their tax measures on a statewide general election occurring several months later. 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. This is especially the case for presidential general elections where voters tend to be more inclined to support taxes.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Voter Considerations in Local Proposition 218 Elections, Cumulative Tax Burdens and Precedent
Passage of a local government tax measure also establishes political precedent that often leads to additional and sometimes more expensive tax measures in the future by the same or other local governments in the area.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Taxpayer Tools
The Howard Jarvis Taxpayers Association has published various "taxpayer tools" to assist taxpayers in situations where a tax measure has been placed on the ballot by a local government.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections
In Proposition 218 tax elections, it is often helpful to voters to have financial data regarding the local government proposing the tax so that voters can make a more informed voting decision concerning the merits and need for the tax. This includes the availability of comparative financial data with other local governments, including other local governments similar in population as well as geographical proximity.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections
Much of the financial data about a local government, including detailed budgetary data, can be obtained directly from the local government itself. In some instances, it may be necessary to make written requests under the California Public Records Act. It may also be advisable to obtain data in electronic format to facilitate further study and analysis. Additional information that is generally of value to voters includes public employee salary data, public employee benefits data (including pensions), annual audited financial reports, historical (prior years) budgetary data within the local government, and budgetary projections in future years. Budgetary spending decisions, which typically reflect the spending policies and priorities of a local government, can be particularly helpful in general tax elections where local politicians decide how the tax proceeds will be spent.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections
The California Supreme Court has held that when a public official or employee uses a personal account and/or device to communicate about the conduct of public business, such as e-mails or text messages, the applicable writings may be subject to public disclosure under the California Public Records Act. Such communications may yield information relevant for voter consideration in Proposition 218 tax elections.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections
Large amounts of financial data concerning local governments in California are also available in digital format from state agencies, including the California State Controller, the California Department of Tax and Fee Administration, the California Secretary of State, and the California Department of Education.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections
Local government finance and budgetary data can also be of significant value to voters in connection with the exercise of the local initiative power under Proposition 218 to reduce or repeal local government levies. 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. Such data can also be utilized to bolster findings and declarations in a local initiative under Proposition 218, especially in connection with local government utility fee reductions or repeals that may be subject to statutory utility rate restrictions under California law.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California State Controller makes extensive and detailed local government financial data available on its Government Financial Reports Data website. The website has years of detailed financial data in an open data format from all California counties, most California cities, thousands of special districts, and pension-related information for state and local government pension plans. Detailed financial data provided about local governments include revenues, expenditures, liabilities, assets, and fund balances. The data are compiled from reports submitted by local governments to the California State Controller as required by law. The financial data are generally unaudited.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California State Controller also makes extensive and detailed salary and other compensation (e.g., retirement and health costs) data for local government public employees in California on its Government Compensation in California website. Extensive tools are provided for data analysis and comparison purposes. Extensive and detailed California local government public employee salary (including benefits) and pension data are also available on the Transparent California website. The data are obtained from local governments pursuant to public record requests under the California Public Records Act.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California Department of Tax and Fee Administration provides sales tax rates for local governments on its website. Current and historical tax rate data are provided. Tax rate data are also available for downloading to facilitate further study and analysis. The sales tax rate data are particularly useful to taxpayers and voters in local sales tax elections. Sales tax rate increases are being used more and more by local governments in California, especially cities, to fund government services, programs, infrastructure, and often high public employee salaries and benefits (including pension obligations). As a result, there exists significant variation in sales tax rates in local jurisdictions throughout California.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California Department of Education provides detailed California K-12 public education data on the Ed-Data website. Student and staff data are available at the state, county, school district, and school levels. Local revenue election data are available at the state, county, and school district levels. Financial data are available at the state and school district levels. Comparison tools at the school district and school levels are also available. The K-12 public education data can be helpful to taxpayers and voters in school parcel tax and school general obligation bond election campaigns.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
Local government data relating to matters other than budgetary or financial may also be helpful to voters in Proposition 218 tax elections. 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.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
Examples include crime data in connection with public safety taxes, student performance data in connection with education taxes (or bonds), traffic data in connection with transportation taxes, public safety response times in connection with a public safety tax, and park usage and maintenance in connection with a parks and recreation tax. Most of the performance data about a local government can be obtained directly from the local government itself. In some instances, it may be necessary to make a written request for performance data under the California Public Records Act. It is generally preferable to obtain the performance data in electronic format to facilitate further study and analysis.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California Secretary of State also provides a tool (known as Power Search) for searching campaign contribution data reported to the Secretary of State under the California Political Reform Act. Only electronically reported, state-level campaign data are generally provided. However, some contributions in local government elections, including tax elections under Proposition 218, are also included. Persons or entities that make campaign contributions at the local level, including in Proposition 218 tax elections, may also make campaign contributions at the state level that are politically relevant in a local tax election campaign. If such state level campaign contributions were made, the search tool will facilitate the identification of those campaign contributions.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
The California Secretary of State also provides detailed lobbying activity data on the Cal-Access website. This includes detailed data by lobbyist employers such as local governments. Information that is available includes the amount spent on lobbying activities, the names of the lobbyists, and the specific legislation/agencies lobbied. Comparative lobbying data with other lobbyist employers, including other local governments, can also be obtained.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
California law allows local governments to use public funds to lobby for or against legislation at the state and federal government levels. Such lobbying using public funds can also be done indirectly through associations such as the League of California Cities, the California State Association of Counties, and the Association of the California Water Agencies. Funding in support of these associations generally comes from annual dues payments (using public funds) made by the member local governments.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Availability of Local Government Data for Use by Voters in Tax Elections, Extensive Data Sources Available
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. Local governments seeking voter approval for a tax frequently claim a lack of public funding as a basis for proposing the tax. To the extent a local government spends significant public funds on lobbying activities in support of legislation that would erode or otherwise weaken taxpayer protections, this can become a significant campaign issue in a Proposition 218 local tax election.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Election Campaigns Involving Local Government Taxes
Local tax measures typically have well organized and funded support, especially from local public employee unions and frequently from the area business community. Business groups such as the Bay Area Council, the Silicon Valley Leadership Group, and the Los Angeles Area Chamber of Commerce frequently support local tax measures that disproportionately burden ordinary taxpayers, especially local sales taxes and local parcel taxes. Business interests that stand to financially benefit from the passage of a local tax measure also frequently make significant campaign contributions in support of such measures.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Election Campaigns Involving Local Government Taxes
The ballot arguments contained in the official ballot pamphlet sent to voters are usually the only opportunity for the opponents of a local government tax levy to reach all voters. There is a specified word limit for arguments which is generally set by statute. Arguments must also be accurate and not misleading to avoid a successful legal challenge. Any procedures applicable to the filing of arguments must also be followed. Ballot arguments must generally be filed early in the election process.


1996 California Proposition 218, Voter/Taxpayer Issues Related to Proposition 218 Elections, Election Campaigns Involving Local Government Taxes
As a result, it is important for interested voters to find out about the applicable deadlines for filing ballot arguments shortly following the decision by a local government to place a tax measure on the ballot. Ballot argument filing deadlines and requirements can generally be obtained from the local elections official conducting the tax election.


1996 California Proposition 218, Initiative Power to Reduce or Repeal Local Government Levies
One of the most significant provisions of Proposition 218 constitutionally reserves to local voters the exercise of the initiative power to reduce or repeal any local tax, assessment, fee or charge. The local initiative power under Proposition 218 is a powerful tool available to voters, particularly when local government officials are not responsive to their constituents in matters relating to local taxes, assessments, fees and charges. The specific constitutional language applicable to the local initiative power under Proposition 218 provides:


1996 California Proposition 218, Initiative Power to Reduce or Repeal Local Government Levies
SEC. 3. Initiative Power for Local Taxes, Assessments, Fees and Charges. Notwithstanding any other provision of this Constitution, including, but not limited to, Sections 8 and 9 of Article II, the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.


1996 California Proposition 218, Initiative Power to Reduce or Repeal Local Government Levies, Reduced Signature Requirement Local Initiative Power
The local initiative power under Proposition 218 is also subject to a significantly reduced signature requirement which cannot exceed the requirement applicable to statewide statutory initiatives. The specific maximum signature requirement under Proposition 218 is five percent (5%) of the votes for all candidates for Governor at the last gubernatorial election within the territory of the local government.


1996 California Proposition 218, Initiative Power to Reduce or Repeal Local Government Levies, Example Uses of Local Initiative Power Under Proposition 218
The local initiative power under Proposition 218 can be used to reduce or repeal local taxes like utility user taxes, sales taxes, business taxes, parcel taxes, and also to reduce or repeal local government fees and charges such as stormwater fees, groundwater fees, public ambulance/paramedic fees, public park/sports fees, public parking fees, or utility fees and charges for water (including drought fees and surcharges), sewer, or refuse collection services.


1996 California Proposition 218, Initiative Power to Reduce or Repeal Local Government Levies, Validity of Local Initiative Power Under Proposition 218
Exercise of the local initiative power under Proposition 218 was unanimously confirmed and upheld by the California Supreme Court in Bighorn-Desert View Water Agency v. Verjil, 39 Cal. 4th 205 (July 2006). The California Legislative Analyst's Office stated that, based on the actual constitutional language of the initiative power provision, the only limits appear to be those under federal law. However, the scope of the local initiative power under Proposition 218 has yet to be fully determined by the California Supreme Court.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms
Section 4 of Proposition 218 added Article XIII D to the California Constitution. Article XIII D relates primarily to special assessments on real property and property-related fees and charges.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms
Section 1 of Article XIII D specifies that its provisions apply to all special assessments and property-related fees and charges irrespective of whether such levies are imposed pursuant to state statute or local charter authority. This makes it clear that Article XIII D applies to charter cities in California.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms
Section 1 further specifies that nothing in Proposition 218 provides any new authority to any local government to impose any tax, special assessment, or property-related fee or charge. This means that the legal authority to impose a local tax, special assessment, or property-related fee or charge must come from an independent legal source such as a state statute or a local city charter provision.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms
Section 1 also specifies two types of laws that are not affected by Proposition 218. First, existing laws relating to the imposition of fees or charges as a condition of property development (e.g., developer fees). Second, existing laws relating to the imposition of timber yield taxes. Under the express language of Proposition 218, the foregoing exceptions are limited to laws existing at the time Proposition 218 became law.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions
Section 2 of Article XIII D contains various definitions applicable to the article. A summary of the more significant definitions follows.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, "Agency"
The term "agency" sets forth the public entities subject to the article. The term "agency" in Article XIII D incorporates the same broad definition of "local government" used in Article XIII C. As a result, if a public entity is a "local government" under Article XIII C it is also an "agency" under Article XIII D.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, "Assessment"
The term "assessment" is defined as "any levy or charge upon real property by an agency for a special benefit conferred upon the real property." If a levy or charge is an "assessment," it is subject to the procedures and requirements applicable to assessments in Article XIII D. The detailed procedures and requirements for "assessments" are contained in Section 4 of Article XIII D. Proposition 218 maintains the traditional requirement that a special assessment must specially benefit the assessed property. However, a key reform under Proposition 218 is that it significantly tightens what constitutes a "special benefit" for purposes of levying a lawful special assessment.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, "Assessment"
A "special benefit" means "a particular and distinct benefit over and above general benefits conferred on real property locate in the district or to the public at large. General enhancement of property value does not constitute 'special benefit.'" The California Supreme Court unanimously confirmed and upheld the tighter "special benefit" definition in interpreting it to mean that a special benefit must affect an assessed property in a way that is particular and distinct from its effect on other parcels, and that real property in general and the public at large do not share.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
Proposition 218 created a new type of fee or charge known as a property-related fee or charge. Whether a fee or charge is "property-related" is legally significant because if a fee or charge is "property-related," it is subject to the procedures and requirements applicable to such levies in Article XIII D. The detailed procedures and requirements for property-related fees or charges are contained in Section 6 of Article XIII D.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
A "property-related" fee or charge is "any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property-related service." A "property-related service" is defined as "a public service having a direct relationship to property ownership."


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
Initially, the California Supreme Court in 2001 narrowly interpreted what constitutes a "property-related" fee or charge in concluding that a residential rental inspection fee was not "property-related."


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
In 2002, a California appellate court held that an in-lieu franchise fee for water, sewer, and refuse collection services was a "property-related" fee subject to Article XIII D. Also in 2002, another California appellate court held that a stormwater drainage fee imposed on developed parcels was a "property-related" fee subject Article XIII D.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
In 2004, the California Supreme Court held that a fire suppression fee imposed as a condition for making a new connection to a water system was not a "property-related" fee because the fee was not imposed by virtue of property ownership, but instead was imposed as an incident of the voluntary act of the property owner in applying for a water service connection.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
In 2005, a California appellate court held that a fee in lieu of property taxes assessed upon municipal utility departments providing water, sewer, and solid waste collection services was a "property-related" fee.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
In 2006, the California Supreme Court definitively held that a utility charge imposed by an agency for ongoing water delivery, including a consumption based utility charge, was a "property-related" fee. In reaching the preceding conclusion about consumption based utility charges, the court relied on the "user fee or charge for a property-related service" component of the constitutional definition. Based on the court's reasoning, fees and charges for ongoing sewer and refuse collection services are also "property-related."


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
In 2017, the California Supreme Court held that a fee imposed upon persons on the extraction of groundwater was generally not a property-related fee. The 2017 California Supreme Court decision disapproved two previous Court of Appeal published decisions holding that a fee on the extraction of groundwater was a property-related fee under Proposition 218. This was the first time the California Supreme Court disapproved a published Court of Appeal decision with the resulting effect of taking away Proposition 218 constitutional rights and protections previously recognized by a California appellate court.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Constitutional Definitions, Property-Related Fee or Charge
Although fees imposed upon persons on the extraction of groundwater are generally no longer a property-related fee under Proposition 218, such levies may still be subject to local voter approval as a tax under Proposition 26 which California voters approved in 2010. However, groundwater fees imposed upon parcels of property may still be subject to the requirements of Proposition 218. 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. This gives local voters an available political remedy to compel an election regarding a groundwater fee approved by a local government. The local initiative power under Proposition 218 has been used before to repeal a local groundwater fee.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations
Section 3 of Article XIII D specifies that no tax, assessment, or property-related fee or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (1) constitutionally permitted property taxes based on the assessed value of the property; (2) special taxes receiving a two-thirds vote under Proposition 13; (3) assessments on real property as provided by Article XIII D; and (4) property-related fees or charges for property-related services as provided by Article XIII D.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations
The preceding requirement generally means that all parcel taxes must be levied as special taxes subject to two-thirds voter approval. The preceding requirement also means that property-related fees or charges may only be imposed for property-related services.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations
A tax imposed on the owners of wholesale liquid fuel storage facilities based solely on the storage capacity of the facilities' tanks, regardless of whether the tanks are used or any fuel is stored in them, was found by a California appellate court to be subject to the constitutional restrictions under Section 3 of Article XIII D.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations
The courts have yet to fully determine what taxes (e.g., certain utility user taxes) are deemed imposed upon a "person as an incident of property ownership," thereby requiring the tax to be a special tax subject to two-thirds voter approval.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations, Electrical or Gas Service Exemption Under Article XIII D
Section 3 of Article XIII D also contains an exemption that for purposes of Article XIII D, fees and charges for electrical or gas service are not property-related fees or charges imposed as an incident of property ownership. This means that electrical or gas service fees and charges imposed by local agencies are not subject to the procedures and requirements applicable to property-related fees or charges, including the proportional cost of service requirement.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations, Electrical or Gas Service Exemption Under Article XIII D
The scope of the exemption for electrical or gas service fees and charges only applies to Article XIII D. Depending upon the specific circumstances, electrical or gas service fees and charges imposed by a local agency could constitute a "tax" subject to voter approval under Article XIII C, as amended by Proposition 26 in 2010.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations, Electrical or Gas Service Exemption Under Article XIII D
Electrical or gas service fees and charges that are exempt under Article XIII D and imposed by a local public agency (but not a private entity) are generally subject to reduction or repeal using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder. This provides local voters with a legislative remedy to address electrical or gas service utility fees and charges imposed by a local public agency that are considered excessive or unreasonable.


1996 California Proposition 218, Article XIII D – Assessment and Property-Related Fee Reforms, Proposition 218 Levy Limitations, Electrical or Gas Service Exemption Under Article XIII D
As an example, the local initiative power under Proposition 218 could be used to reduce electrical service fees and charges in situations where a local public agency such as a city transfers substantial utility fee or charge revenues to the general fund of the local public agency, whether done as legally allowable "profit" or as reimbursement for questionable services rendered to the utility by the local public agency. Once transferred to the general fund of a local public agency, the utility revenue proceeds can generally be spent at the complete discretion of local politicians.


1996 California Proposition 218, Assessments – Procedures and Requirements
Section 4 of Article XIII D contains detailed procedures and requirements applicable to special benefit assessments on real property. The assessment procedures and requirements are designed to ensure that any special assessment levied by an agency is a legitimate special assessment.


1996 California Proposition 218, Assessments – Procedures and Requirements
Proposition 218 also requires an agency to have a vote of the affected property owners (referred to as an assessment ballot proceeding) before any proposed new or increased assessment can be levied by an agency. Prior to Proposition 218, an agency was not required to obtain ballot approval from affected property owners before levying assessments on real property.


1996 California Proposition 218, Assessments – Procedures and Requirements
The assessment process is formally initiated by the local agency. For some assessments, other laws (e.g., a state statute or a local law such as an ordinance or a local charter provision) may also legally require a property owner petition to initiate the assessment process, but a property owner petition is not required under Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, Identification of Parcels Subject to Assessment
An agency that proposes to levy an assessment under Proposition 218 must first identify all parcels which will have a special benefit conferred upon them and upon which an assessment is proposed for imposition. The geographic area determined by an agency to contain all parcels of property which will have a special benefit conferred upon them is referred to as an assessment district.


1996 California Proposition 218, Assessments – Procedures and Requirements, Identification of Parcels Subject to Assessment
The proportionate special benefit derived by each identified parcel must be determined by the agency in relationship to the entirety of the capital costs of the public improvement(s) being financed, the maintenance and operation expenses of the public improvement(s), or the cost of the property-related service(s) being provided. Proposition 218 does not preclude assessments for public services, but under the applicable constitutional requirements only "property-related services" are generally assessable.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report
All assessments must be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California. The required engineering report is ordinarily prepared by a registered civil engineer.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report
The engineer's report is a critical document in the assessment process because it contains the detailed supporting basis for levying the assessment. This includes a detailed supporting basis for compliance with the substantive requirements for assessments such as presence of special benefits, proper apportionment of special benefits between parcels, separability of general benefits from special benefits, proper assessment of parcels owned by public agencies, detailed cost information, and the manner of calculating assessments upon specific parcels. In a legal challenge concerning the validity of an assessment, the courts typically refer to the engineer's report to determine whether the assessment complies with Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report
Proposition 218 does not require the engineer's report be mailed to property owners as part of the assessment notification process. However, the engineer's report is a public record whereby a member of the public, including property owners subject to a proposed assessment, may make a written request and receive a copy of an engineer's report under the California Public Records Act.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report
The engineer's report is also sometimes available in electronic format where it can be downloaded by the public. However, Proposition 218 does not require an engineer's report be made available in an electronic format. The California Public Records Act generally requires that public records in an electronic format be made available when requested by a member of the public.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report, Electronic Data Files
Electronic data files containing information relating to the calculation and/or amount of a proposed assessment for each parcel within an assessment district may also be available. Some assessment districts may contain many thousands of parcels, and sometimes the assessment calculations for each parcel are only available as an electronic data file. These data files are generally public records subject to disclosure under the California Public Records Act.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report, Electronic Data Files
The data files must also generally be made available in the electronic format requested by the public if the requested format is one that has been used by the agency to create copies for its own use or for provision to other public agencies. The foregoing requirement is important to facilitate independent analysis of electronic data files by the public for purposes of verifying Proposition 218 compliance.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report, Electronic Data Files
Related electronic data files may also be used to help verify Proposition 218 compliance. In particular, use of geographic information system (GIS) data files. GIS data files containing location-based information relating to a proposed assessment for each parcel within an assessment district may also be available. In addition, separate GIS data files may have also been used as part of the assessment calculation process such as GIS data files containing the location and attributes of streetlights and parcels within an assessment district.


1996 California Proposition 218, Assessments – Procedures and Requirements, Engineer's Report, Electronic Data Files
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. The California Supreme Court has ruled that GIS database files are generally deemed public records subject to disclosure under the California Public Records Act.


1996 California Proposition 218, Assessments – Procedures and Requirements, Special Benefit and Proportionality Requirements
Under Proposition 218, only special benefits are assessable. Proposition 218 contains its own constitutional definition of "special benefit" that significantly tightens the kind of special assessments an agency can levy on real property. Some special assessments that may have been permissible prior to Proposition 218 are no longer legally permissible because of a lack of "special benefit" under the tightened definition.


1996 California Proposition 218, Assessments – Procedures and Requirements, Special Benefit and Proportionality Requirements, Separating General Benefits From Special Benefits
Proposition 218 also requires an agency to separate the general benefits from the special benefits conferred on a parcel. Pre -Proposition 218 case law did not invalidate assessments because they also provided general benefits in addition to special benefits, and the courts did not demand a strict separation of general benefits from special benefits. The benefit separation requirement under Proposition 218 helps ensure compliance with the requirement that only special benefits are assessable. Since general benefits are not assessable, they must be excluded and financed using revenue sources other than assessments (e.g., from taxes).


1996 California Proposition 218, Assessments – Procedures and Requirements, Special Benefit and Proportionality Requirements, Separating General Benefits From Special Benefits
The "assessment" definition refers to a levy on real property for a "special benefit" conferred upon the real property. Since permissible assessments are limited to special benefits conferred upon real property, in addition to separating the general benefits conferred on a parcel, benefits to persons or to personal property must also be excluded from assessment. As a practical matter, this makes it much more difficult to legally justify the imposition of special assessments for public improvements or services that primarily benefit people instead of real property.


1996 California Proposition 218, Assessments – Procedures and Requirements, Special Benefit and Proportionality Requirements, Proportionality Requirement
Under Proposition 218, no assessment may be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel. The proportionality requirement ensures that the aggregate assessment imposed on all parcels is distributed among all assessed parcels in proportion to the special benefits conferred on each parcel.


1996 California Proposition 218, Assessments – Procedures and Requirements, Special Benefit and Proportionality Requirements, Proportionality Requirement
An agency may provide a discounted assessment less than the reasonable cost of the proportional special benefit conferred so long as any discounts do not cause the assessments imposed on the remaining parcels in the assessment district to exceed the reasonable cost of the proportional special benefit conferred on those parcels.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Parcels Also Subject to Assessment
Proposition 218 provides that parcels within an assessment district that are owned or used by any local agency, the State of California, or the United States are not exempt from assessment unless the agency can demonstrate by clear and convincing evidence that the publicly owned parcels receive no special benefit. This requirement has been confirmed and upheld by a California appellate court.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Parcels Also Subject to Assessment
Historically, publicly owned parcels were exempt from paying assessments on real property. The courts construed an implied exemption for special assessments under the provision of the California Constitution exempting local governments from property taxation. The practical effect of the historical exemption was to require private property owners, in addition to paying an assessment share attributable to their own parcel, to also pay the share of assessments that would otherwise be attributable to publicly owned parcels.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Parcels Also Subject to 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. To the extent any exemption for federal property exists under federal law, Proposition 218 prohibits an agency from shifting the assessment burden from federally exempt parcels to other parcels within an assessment district.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement
Once an agency has identified the parcels subject to assessment, the agency must then calculate the amount of the proposed assessment for each identified parcel and must give the record owner of each identified parcel written notice by mail of the proposed assessment.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement
The required written notice must state the total assessment amount chargeable to the entire assessment district, the amount chargeable to the record owner's particular parcel, the duration of the assessment payments, the reason(s) for the assessment and the basis upon which the amount of the proposed assessment was calculated, together with the date, time, and location of a public hearing on the proposed assessment.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement
The required notice must also include, in a conspicuous place on the notice, a summary of the procedures applicable to the completion, return, and tabulation of the assessment ballots required under Proposition 218, including a disclosure statement that the assessment will not be imposed if the ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment, with the ballots weighted according to the proportional financial obligation of the each affected property.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement
Some property owners may not realize the importance of the written notice and assessment ballot and end up throwing away the mailing thinking it is junk mail. To help address this matter, the California Legislature enacted additional requirements relating to the envelope containing the assessment notice and ballot. On the face of each envelope mailed to the record owner in which the required notice and assessment ballot are enclosed, there must appear in substantially the following form the phrase "OFFICIAL BALLOT ENCLOSED" in no smaller than 16-point bold type. A local agency may additionally place the phrase "OFFICIAL BALLOT ENCLOSED" on the face of the envelope in a language or languages other than English.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement, Inclusion of Assessment Ballot
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.


1996 California Proposition 218, Assessments – Procedures and Requirements, Written Notice Requirement, Inclusion of Assessment Ballot
The California Legislature has enacted additional requirements relating to the completion and delivery of assessment ballots. While not required by Proposition 218, these additional statutory requirements must be followed for an assessment ballot to be counted. An assessment ballot must be signed and either mailed or otherwise delivered to the address indicated on the assessment ballot. Regardless of the method of delivery, all assessment ballots must be received at the address indicated, or the location of the public testimony, in order to be included in the tabulation of a majority protest. An assessment ballot may be submitted, changed, or withdrawn by the person who submitted the ballot prior to the conclusion of the public testimony on the proposed assessment at the required public hearing.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement
The agency must conduct at least one public hearing upon the proposed assessment not less than 45 days after mailing the notice of the proposed assessment to the record owners of each identified parcel subject to the proposed assessment. At the public hearing, any person is permitted to present written or oral testimony to the agency. The public hearing may also be continued from time to time.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
At the public hearing, the agency must consider all protests against the proposed assessment. At the conclusion of the public hearing, an impartial person designated by the agency who does not have a vested interest in the outcome of the proposed assessment must tabulate the assessment ballots. The governing body of the agency may, if necessary, continue the assessment ballot tabulation at a different time or location accessible to the public, provided the governing body announces the time and location at the public hearing. The impartial person may use technological methods of tabulating the assessment ballots, including, but not limited to, punchcard or optically readable (bar-coded) assessment ballots.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
In tabulating the assessment ballots, the ballots must be weighted according to the proportional financial obligation of the affected parcel. If more than one of the record owners of an identified parcel submits an assessment ballot, the amount of the proposed assessment to be imposed upon the identified parcel must be allocated to each ballot submitted in proportion to the respective record ownership interests or, if the ownership interests are not shown on the record, as established to the satisfaction of the agency by documentation provided by those record owners. The assessment ballot process under Proposition 218 is frequently referred to as an "assessment ballot proceeding" and is not technically regarded as an election.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
The weighted assessment ballot requirement under Proposition 218 is not new. Neither is the requirement that the assessment ballot process be limited to property owners. Prior to Proposition 218, the majority protest process was limited to property owners subject to a proposed assessment. For a small number of assessments, a property owner election with weighted voting was required. The constitutionality of these property owner elections has previously been upheld by the California Supreme Court.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
Proposition 218 does not directly address issues associated with the secrecy of assessment ballots. However, these issues have been addressed by statutes adopted by the California Legislature.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
An assessment ballot must be in a form that conceals its contents once it is sealed by the person submitting the assessment ballot, and must remain sealed until the tabulation of assessment ballots starts. Assessment ballots must be unsealed and tabulated in public view at the conclusion of the required public hearing so as to permit all interested persons to meaningfully monitor the accuracy of the ballot tabulation process.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
During and after the ballot tabulation, assessment ballots and the information used to determine the weight of each assessment ballot are disclosable public records under the California Public Records Act, and must be made equally available for inspection by the proponents and the opponents of the proposed assessment. Assessment ballots must be preserved for a minimum of two years, after which they may be destroyed as provided by law.


1996 California Proposition 218, Assessments – Procedures and Requirements, Public Hearing Requirement, Assessment Ballot Tabulation; Weighted Ballots
The California Supreme Court has ruled that voting secrecy protections under the California Constitution do not apply to assessment ballot proceedings under Proposition 218. To the extent any secrecy protections exist for assessment ballots, they are generally derived from state statutes or local laws. Prior to Proposition 218, assessment protests by property owners were generally treated as public records subject to disclosure under the California Public Records Act. Proposition 218 did not alter the public record status of assessment protests by property owners.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments
An agency may not impose a proposed assessment if there is a majority protest. 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. The assessment ballots are weighted by the amount of the proposed assessment to be imposed upon the identified parcel for which each assessment ballot was submitted.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments
Proposition 218 continues the concept of a majority protest for assessments. 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. No assessment ballot was involved. If a property owner did not affirmatively protest an assessment (i.e., if a property owner did nothing), that effectively counted as a vote in support of the proposed assessment. This contributed to the inequity of the assessment process prior to the passage of Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments
Also prior to Proposition 218, even if an absolute majority of property owners protested an assessment and a majority protest existed, state laws often allowed local agencies to overrule a majority protest by a specified supermajority vote requirement (typically by a four-fifths vote) of the governing body of the local agency. What this meant in practical terms for a typical five-member governing body was that it would take at least three votes to approve an assessment in the absence of a majority protest and at least four votes would be required to overrule a majority protest. Prior to Proposition 218, sustained majority protests for assessments were rare events.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments
One of the most significant assessment reforms under Proposition 218 is how a majority protest is determined. Rather than being based on an absolute majority, as was the case prior to Proposition 218, a majority protest is now determined based on the assessment ballots actually received by the local agency. If a property owner does not properly return an assessment ballot, that fact will not count for or against the proposed assessment. Proposition 218 also does not allow an agency to overrule a majority protest. If a majority protest exists under Proposition 218, the agency is constitutionally prohibited from imposing the proposed assessment.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments, Validity of Assessment Ballot Process Under Proposition 218
The validity of the assessment ballot process under Proposition 218 was upheld by a California appellate court in 2002. Property owner elections with weighted voting do not violate the federal constitutional requirement of "one man, one vote" under the limited circumstances of a special-purpose unit of government assigned the performance of functions affecting definable groups of constituents more than others. Such is the case with assessment districts under Proposition 218. 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.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments, Validity of Assessment Ballot Process Under Proposition 218
Proposition 218 contains a special additional requirement in the event a court determines the assessment ballot process violates federal law. If any such violation were to occur, an assessment may not be levied under Proposition 218 unless approved by a two-thirds vote of the electorate in the assessment district.


1996 California Proposition 218, Assessments – Procedures and Requirements, Majority Protest for Assessments, Validity of Assessment Ballot Process Under Proposition 218
The practical effect of the federal law invalidity provision is that if the assessment ballot process were invalidated under federal law, the approval requirements for assessments under Proposition 218 would become even more restrictive than if either no legal challenge under federal law had occurred or if any such legal challenge were unsuccessful. This provides a strong disincentive to legally challenge the assessment ballot process under Proposition 218. However, the assessment ballot process under Proposition 218 has been found by a California appellate court to not violate applicable federal law.


1996 California Proposition 218, Assessments – Procedures and Requirements, Local Agency Burden to Demonstrate Compliance
Prior to Proposition 218, a person challenging an assessment had the burden to prove that the assessment was not legal. An important reform under Proposition 218 is that it shifted the burden of demonstrating compliance to the local agency in a lawsuit challenging an assessment.


1996 California Proposition 218, Assessments – Procedures and Requirements, Local Agency Burden to Demonstrate Compliance
In any legal action contesting the validity of an assessment, the burden is on the local agency to demonstrate that the properties in question receive a special benefit over and above the benefits conferred on the public at large and that the amount of any contested assessment is proportional to, and no greater than, the benefits conferred on the properties in question. This change makes it significantly easier for taxpayers to win a legal challenge.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
The detailed and substantive assessment reforms contained in Proposition 218 were unanimously confirmed and upheld by the California Supreme Court in Silicon Valley Taxpayers' Association, Inc. v. Santa Clara County Open Space Authority, 44 Cal. 4th 431 (July 2008).


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
The Silicon Valley Taxpayers case is also one of the most important and significant taxpayer protection cases in a generation (and is listed as one of the most important and influential decisions in the history of the California Supreme Court) in large part because of the California Supreme Court holding on the standard of review issue. The standard of review issue addresses the level of deference a court will ordinarily give a local agency in reviewing its legislative actions such as the approval of an assessment. The extent of deference given by the courts has a major bearing on the outcome of a lawsuit.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
Before Proposition 218 became law, in a legal challenge involving an assessment the courts reviewed the actions of the local agency under a highly deferential standard of review. Under this highly deferential standard of review, the courts presumed that an assessment was valid and the person challenging the assessment had to show that the record before the local agency clearly did not support the underlying determinations of special benefit and proportionality. The underlying legal basis for the historical deferential standard of review was that the establishment of an assessment district takes place as a result of a peculiarly legislative process.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
As a result, the constitutional separation of powers doctrine demanded a more deferential standard of review by the courts. Property owners rarely won assessment lawsuits on the merits prior to Proposition 218. Because it was so difficult to win a legal challenge, lawyers were candidly urged not to bother even trying to challenge an assessment in court.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
The constitutional status of the substantive assessment requirements under Proposition 218 altered the standard of review analysis. The substantive requirements for assessments are contained in constitutional provisions of dignity at least equal to the constitutional separation of powers provision. Prior to Proposition 218, special assessment laws were generally statutory, and the constitutional separation of powers doctrine served as a foundation for a more deferential standard of review by the courts. However, after Proposition 218 became law, an assessment's validity is now a constitutional question.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
Relying on various provisions of Proposition 218, including the burden of demonstration provision applicable to assessments, as well as language in the Proposition 218 ballot pamphlet, the California Supreme Court concluded that because Proposition 218's underlying purpose was to limit government's power to exact revenue and to curtail the deference that had been traditionally accorded legislative enactments on fees, assessments, and charges, a more rigorous standard of review was warranted. The separation of powers doctrine no longer justified allowing a local agency to usurp the judicial function of interpreting and applying the constitutional provisions that govern assessments under Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
Under the new standard adopted by the California Supreme Court in the Silicon Valley Taxpayers case, California courts must exercise their independent judgment in reviewing whether an assessment imposed by a local agency violates the constitutional provisions of Proposition 218. This new standard makes it significantly easier for taxpayers to win lawsuits challenging the validity of assessments under Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
The California Supreme Court in the Silicon Valley Taxpayers case also stated that with respect to Proposition 218 all legislation must be subordinate to the constitutional provision, and in furtherance of its purpose, and must not in any particular attempt to narrow or embarrass the measure. As a result, when government, whether state or local, acts in a legislative capacity it has no authority to exercise its discretion in a way that violates Proposition 218 or undermines its effect. Thus, even the California Legislature cannot enact statutes that narrow or undermine the constitutional protections under Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case
Appellate counsel who represented the interests of taxpayers and Proposition 218 before the California Supreme Court in the landmark Silicon Valley Taxpayers case included Tony Tanke, Jack Cohen, and James Burling. The successful equal dignity argument applicable to the standard of review issue in the Silicon Valley Taxpayers case was developed by constitutional attorney Jack Cohen.


1996 California Proposition 218, Assessments – Procedures and Requirements, The Landmark 2008 Silicon Valley Taxpayers Supreme Court Case, Changed Legal Environment Following Silicon Valley Taxpayers Case
The Silicon Valley Taxpayers case profoundly changed the legal environment in California as it relates to constitutional taxpayer protections. As a California Law Review article noted following the Silicon Valley Taxpayers decision: "[T]he California Supreme Court's opinion in Silicon Valley elevates fiscal limitations to the same level as core California constitutional issues." This represented a watershed change in judicial interpretation compared to the historical interpretation of constitutional taxpayer protections in California, especially under Proposition 13, that generally resulted in a narrow construction of constitutional taxpayer protections to limit their scope, application, and impact.


1996 California Proposition 218, Assessments – Procedures and Requirements, Local Initiative Power to Reduce or Repeal Approved Assessments
After approval of an assessment, the local initiative power under Proposition 218 can generally be used to reduce or repeal that assessment. This includes the significantly reduced signature requirement thereunder.


1996 California Proposition 218, Assessments – Procedures and Requirements, Local Initiative Power to Reduce or Repeal Approved Assessments
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. An assessment district consisting of residential parcels paying lower assessments and a significant number of larger parcels paying higher assessments, such as large publicly owned or commercial parcels, can sometimes result in an assessment being approved under weighted voting even though a majority of the residential property owners opposed the assessment. A local initiative to reduce or repeal the assessment is an available remedy to address such an inequity. Should an assessment reduction or repeal initiative qualify for the ballot, the election would be by the registered voters and the ballots would not be weighted.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions
Section 5 of Article XIII D sets forth the effective date of the article. Section 5 also includes four exemptions from the assessment procedures and approval process contained in Section 4 of Article XIII D.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions
Section 5 states that Article XIII D was effective the day after the election (November 6, 1996 effective date) unless otherwise provided. Section 5 further states that beginning July 1, 1997, all existing, new, or increased assessments must comply with Article XIII D. However, Section 5 specifies that four classes of assessments existing on the effective date of Article XIII D (November 6, 1996) are exempt from the procedures and approval process contained in that article.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
The first exemption is for 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. This specific exemption is often referred to as the "traditional purpose" exemption, and was intended to allow traditionally appropriate, nonabusive assessments. Technically, if an existing assessment is not imposed exclusively for an enumerated traditional purpose, it does not qualify for the exemption.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
Any subsequent increases in a traditional purpose assessment must comply with the procedures and approval process contained in Section 4 of Article XIII D. The traditional purpose exemption applicable to special assessments is broader in scope than the narrower election exemptions applicable to property-related fees and charges which only apply to fees and charges for water, sewer, or refuse collection services.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
The second exemption is for any assessment imposed pursuant to a petition signed by the person(s) owning all of the parcels subject to the assessment at the time the assessment was initially imposed. This exemption typically involves circumstances where a developer approved one or more assessments as a condition for developing property. Any subsequent increases in a petition exempt assessment must comply with the procedures and approval process contained in Section 4 of Article XIII D.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
The third exemption is for any assessment the proceeds of which are used to repay bonded indebtedness of which the failure to pay would violate the United States Constitution. The exemption only applies to the extent that the Contract Impairment Clause of the United States Constitution is violated.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
The fourth exemption is for any assessment which previously received majority voter approval from the voters voting in an election on the issue of the assessment. Prior to Proposition 218, voter approval of an assessment was generally not required, but a local agency could voluntarily decide to hold an election on the approval of an assessment. Technically, to qualify for the exemption the election had to be legally binding and not advisory in nature. Any subsequent increases in a prior voter approval exempt assessment must comply with the procedures and approval process contained in Section 4 of Article XIII D.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
When an agency "increases" an assessment, compliance with the assessment process under Proposition 218 is required and the exemptions generally do not apply to the increased assessment. The California Legislature adopted a statute interpreting the term "increase" as applied to assessments. However, the courts have final say in interpreting when an assessment is "increased" under Proposition 218.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
Under the applicable statutory provisions, an assessment is deemed "increased" for purposes of Proposition 218 when a local agency makes a decision that does any of the following: (1) increases any applicable rate used to calculate the assessment; or (2) revises the methodology by which the assessment is calculated, if that revision results in an increased amount being levied on any parcel.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Assessment Exemptions
An assessment is not "increased" in the case in which the actual payments from a parcel are higher than would have resulted when the agency approved the assessment, if those higher payments are attributable to events other than an increased assessment rate or revised methodology, such as a change in the density, intensity, or nature of the use of land.


1996 California Proposition 218, Assessments – Procedures and Requirements, Article Effective Date; Assessment Exemptions, Local Initiative Power to Reduce or Repeal Exempt Assessments
Although assessments exempt under Section 5 are not subject to the assessment approval process contained in Article XIII D, the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder, can generally be used to reduce or repeal an exempt assessment since that power expressly applies to assessments. The only exception would likely be for the bonded indebtedness exemption where a violation of the Contract Impairment Clause of the United States Constitution would occur if the local initiative power under Proposition 218 were exercised to reduce or repeal an assessment subject to that particular exemption.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements
Section 6 of Article XIII D contains the detailed procedures and requirements applicable to property-related fees and charges. These procedures and requirements are designed to ensure that any property-related fee or charge levied by a local agency is a legitimate fee or charge and not an unlawful tax imposed without voter approval.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements
The property-related fee and charge provisions only apply if a fee or charge is "property-related" under the definition contained in Proposition 218. Some property-related fees or charges are levied upon parcels and appear on the annual property tax bill sent to property owners while other property-related fees or charges are levied upon persons and may be paid by a tenant instead of the property owner.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements
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. Proposition 26 amended Proposition 218 by adding a broad constitutional definition of a "tax" for purposes of determining the scope of levies subject to the voter approval requirement for local taxes under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements
Property-related fees or charges may only be levied for "property-related services." A "property-related service" is a public service having a direct relationship to property ownership. Some of the more common property-related fees or charges levied by local agencies include utility fees for ongoing domestic water, sanitary sewer, refuse collection services, stormwater fees, and flood control fees. 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.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions
The type of property-related service involved as well as whether the property-related fee or charge is new, increased, or already existing determines to what extent a levy is subject to the various procedures and requirements contained in Section 6 of Article XIII D, including whether an election is required. Starting July 1, 1997, all property-related fees or charges must comply with Section 6 of Article XIII D.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Increased"
When an agency "increases" a property-related fee or charge, compliance with the property-related fee or charge process under Proposition 218 is required. The California Legislature adopted a statute interpreting the term "increase" as applied to property-related fees or charges. However, the courts have final say in interpreting when a property-related fee or charge is "increased" under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Increased"
A property-related fee or charge is "increased" for purposes of Proposition 218 when an agency makes a decision that does any of the following: (1) increases any applicable rate used to calculate the property-related fee or charge; or (2) revises the methodology by which the property-related fee or charge is calculated, if that revision results in an increased amount being levied on any person or parcel of property.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Increased"
A property-related fee or charge is not "increased" for purposes of Proposition 218 when an agency does either or both of the following: (1) adjusts the amount of a property-related fee or charge in accordance with a schedule of adjustments, including a clearly defined formula for inflation adjustment that was adopted by the agency prior to November 6, 1996; or (2) implements or collects a previously approved property-related fee or charge so long as the fee or charge rate is not increased beyond the level previously approved by the agency, and the methodology previously approved by the agency is not revised so as to result in an increase in the amount being levied on any person or parcel of property.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Increased"
A property-related fee or charge is not "increased" for purposes of Proposition 218 in the case in which the actual payments from a person or a parcel of property are higher than would have resulted when the agency approved the property-related fee or charge, if those higher payments are attributable to events other than an increased fee or charge rate or revised methodology, such as a change in the density, intensity, or nature of the use of land.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Extended"
When an agency "extends" a property-related fee or charge, compliance with the property-related fee or charge process under Proposition 218 is required. The California Legislature adopted a statute interpreting the term "extended" for purposes of the property-related fee or charge provisions of Proposition 218. However, the courts have final say in interpreting when a property-related fee or charge is "extended" under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Triggering Events for Property-Related Fee or Charge Provisions, When Property-Related Fees or Charges Deemed "Extended"
A property-related fee or charge is "extended" for purposes of Proposition 218 when, as applied to an existing property-related fee or charge, an agency extends the stated effective period for the property-related fee or charge, including, but not limited to, amendment or removal of a sunset provision or expiration date. 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.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges
Subdivision (a) of Section 6 of Article XIII D sets forth the procedures an agency must follow for any new or increased property-related fee or charge. The procedures for a new or increased property-related fee or charge help ensure that a property owner receives appropriate written notice and is given an opportunity to provide input prior to the local agency deciding whether to approve a proposed property-related fee or charge.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Written Notice Requirement
The parcels upon which a new or increased property-related fee or charge is proposed for imposition must be identified by the agency. The amount or rate of the property-related fee or charge proposed for imposition upon each identified parcel must also be calculated by the agency. The agency must provide written notice by mail of the proposed property-related fee or charge to the record owner of each identified parcel upon which the property-related fee or charge is proposed for imposition.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Written Notice Requirement
The written notice must include the amount or rate of the property-related fee or charge proposed upon each parcel, the basis upon which the amount or rate of the proposed property-related fee or charge was calculated, the reason(s) for the property-related fee or charge, together with the date, time and location of at least one public hearing on the proposed property-related fee or charge.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Written Notice Requirement
The required notice may be given by including it in the agency's regular billing statement for the property-related fee or charge, or by any other mailing by the agency to the address to which the agency customarily mails the billing statement for the property-related fee or charge.