California Proposition 218, Voter Approval Required Before Local Tax Increases (1996)
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Proposition 218 amended the California Constitution by adding Articles XIII C and XIII D to require local governments to obtain the approval of property owners in a local ballot measure before levying a new or increased tax assessment on those property owners.
Prior to Proposition 218, cities and counties were not required to obtain approval from property owners before levying special tax assessments on them.
Proposition 218 was seen as a victory for fiscal conservatives. It is often cited by local government officials, more than a decade after it passed, as making it harder for them to raise local taxes.[1]
Election results
| Proposition 218 | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
 Yes | 5,202,429 | 56.55% | ||
| No | 3,996,702 | 43.45% | ||
Aftermath
In 2006, the California Supreme Court ruled that the provisions of Proposition 218 apply to local water, refuse and sewer charges. This meant that a local jurisdiction cannot charge one group of water, refuse or sewer ratepayers in order to subsidize the fees of another group of water, refuse or sewer users.
Municipalities such as Palo Alto, subsequent to the 2006 court ruling, have had to reduce the amount they were charging businesses for water, refuse or sewer, and increase the amount they are charging to standard homeowners, upon recognizing that their charges to the two groups were disproportionate and therefore not allowed under Proposition 218.[2]
Constitutional changes
| California Constitution |
|---|
| Articles |
| I • II • III • IV • V • VI • VII • VIII • IX • X • XA • XB • XI • XII • XIII • XIII A • XIII B • XIII C • XIII D • XIV • XV • XVI • XVIII • XIX • XIX A • XIX B • XIX C • XX • XXI • XXII • XXXIV • XXXV |
Proposition 218 added:
- Article XIII C to the California Constitution.
- Article XIII D to the California Constitution.
Text of measure
Summary
The official ballot summary that appeared on the ballot said:
- Limits authority of local governments to impose taxes and property-related assessments, fees, and charges. Requires majority of voters approve increases in general taxes and reiterates that two-thirds must approve special tax.
- Assessments, fees, and charges must be submitted to property owners for approval or rejection, after notice and public hearing.
- Assessments are limited to the special benefit conferred.
- Fees and charges are limited to the cost of providing the service and may not be imposed for general governmental services available to the public.
Fiscal impact
The California Legislative Analyst's Office provided an estimate of net state and local government fiscal impact for Proposition 218. That estimate was:
- "Short-term local government revenue losses of more than $100 million annually."
- Long-term local government revenue losses of potentially hundreds of millions of dollars annually."
- Local government revenue losses generally would result in comparable reductions in spending for local public services."
Supporters
Related lawsuits
External links
- Official Voter Guide to Proposition 218
- Full text of Proposition 218
- November 5, 1996 California election results (PDF)
- PDF of the paper version of the November 5, 1996 Ballot Propositions Voter Guide
- Bighorn-Desert View Water Agency v. Verjil
- Understanding Prop 218 from the Legislative Analyst's Office
- FAQ from the City of Los Angeles
- League of Women Voters analysis
References
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