California Proposition 65, Local Government Revenues (2004)
If Proposition 65 had been approved, it would have changed the California Constitution to require voter approval for any state legislation that reduced certain local government revenues from January 2003 levels.
Local governments (cities and counties) in California primarily receive their revenue from three sources: property taxes, local sales taxes, and the vehicle license fee. Proposition 65 was born out of frustration from local governments as the state government increasingly used local revenues to pay for state government programs, especially during tough financial times. Proponents of the proposition ultimately used it as a bargaining tool to negotiate an agreement with Governor Arnold Schwarzenegger and the California State Legislature on protecting local government revenues. The result was the compromise Proposition 1A on the same ballot, which provided more flexible terms and deferred its restrictions until 2006. As a result, previous proponents of Proposition 65 dropped their support in favor of Proposition 1A.
This proposition conflicted with the provisions of Proposition 1A on the same ballot. The California Constitution provides that if the provisions of two approved propositions are in conflict, only the provisions of the measure with the higher number of "yes" votes at the statewide election take effect. (Since Proposition 65 did not pass, the issue was moot.)
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- Added an entirely new Article XIII E to the California Constitution
- Amended Section 6 of Article XIII B
Text of measure
The ballot title was:
The question on the ballot was:
- "Should reduction of local fee/tax revenues require voter approval? Permits suspension of state mandate if no state reimbursement to local government within 180 days after obligation determined."
- Requires voter approval for any legislation that provides for any reduction, based on January 1, 2003 levels, of local governments' vehicle license fee revenues, sales tax powers and revenues, and proportionate share of local property tax revenues.
- Permits local government to suspend performance of state mandate if state fails to reimburse local government within 180 days of final determination of state-mandated obligation; except mandates requiring local government to provide/modify: any protection, benefit or employment status to employee/retiree, or any procedural/substantive employment right for employee or employee organization.
- See also: Fiscal impact statement
The California Legislative Analyst's Office provided an estimate of net state and local government fiscal impact for Proposition 65. That estimate was:
- Significant changes to state authority over local finances. Higher local government revenues than otherwise would have been the case, possibly in the billions of dollars annually over time. Any such local revenue impacts would result in decreased resources to the state of similar amounts.
After proponents of Proposition 65 qualified it for the ballot, the California State Legislature voted to refer Proposition 1A to the same ballot. Proposition 1A explicitly conflicted with Proposition 65 and included this "poison pill" language in its text:
- "That the people find and declare that this measure and the Taxpayers and Public Safety Protection Act, which appears as Proposition 65 on the November 2, 2004, general election ballot (hereafter Proposition 65) both relate to local government, including matters concerning tax revenues and reimbursement for the cost of state mandates, in a comprehensive and substantively conflicting manner. Because this measure is intended to be a comprehensive and competing alternative to Proposition 65, it is the intent of the people that this measure supersede in its entirety Proposition 65, if this measure and Proposition 65 both are approved and this measure receives a higher number of affirmative votes than Proposition 65. Therefore, in the event that this measure and Proposition 65 both are approved and this measure receives a higher number of affirmative votes, none of the provisions of Proposition 65 shall take effect."
According to Cal-Access, no ballot committees were formed to either support or oppose Proposition 65.
- Official Voter Information Guide with text of Proposition 65
- November 2004 election results from the California Secretary of State
- LAO analysis of Proposition 65
- Guide to Proposition 65 from the California Voter Foundation
- Analysis of Proposition 65 from the Institute of Governmental Studies
- PDF of the mailed November 2, 2004 voter guide for Proposition 65