Summary
In City and County of San Francisco v. All Persons Interested in Matter of Proposition C, 51 Cal. App. 5th 703 (2020), the California Court of Appeal held that San Francisco’s (“City”) Proposition C (“Prop C”) was validly passed by the electorate with a simple majority. Prop C was a voter-sponsored initiative that imposed a special tax on certain businesses to fund homeless services in the City. The California Supreme Court denied review of the case, establishing that only city-sponsored special tax measures require 2/3 voter approval.

Discussion
In November 2018, City voters approved Prop C with 61% of the vote. Prop C imposed a special tax on certain businesses in the City to fund homeless services in the City. Because the voters did not approve Prop C by a 2/3 vote, the City filed a lawsuit to establish whether Prop C was validly enacted. Several business associations opposed the City, arguing the special tax was invalid because it failed this 2/3 voter-approval threshold. The trial court ruled in favor of the City, and the Court of Appeal affirmed.

The initiative power, contained in the California Constitution, allows voters to propose statutes for the electorate to either adopt or reject. The Constitution also limits the power of the government to impose taxes without voter approval. Proposition 218 (“Prop 218”) amended the Constitution to provide that local governments may not impose: (1) taxes for general purposes unless they are approved by a simple majority vote, and (2) taxes for special purposes without a 2/3 vote. The Court held that because the language of Prop 218 does not show an intent to restrict the initiative power with its voter approval requirements, and because a majority vote is all that is generally required to approve ballot measures, Prop C was validly enacted.

Conclusion
Because the California Supreme Court denied review of the case, we now have clarification that only city-sponsored special tax measures require a 2/3 majority vote of the electorate.

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