Prop. 43: Should it be harder to raise local taxes for specific services?

Should California make it harder to pass local taxes designated for specific services?

That’s the question posed by Proposition 43, which would require a two-thirds vote to pass any local special taxes, such as those paying for wildfire prevention, education and healthcare.

Californians already approved a two-thirds vote requirement for special taxes in 1996. So why do we need to vote on it again?

That’s because for decades, it was widely assumed that the requirement applied to all special taxes — until 2017, when the state Supreme Court ruled that it applied specifically to taxes that local officials put on the ballot. 

But the justices did not say whether the same requirement applied to citizen-driven tax measures, when individuals or groups gather enough signatures to put them on the ballot. Since then, several high-profile tax measures, such as the hefty Los Angeles tax on mansion sales and a Sonoma County sales tax to fund emergency response, passed with a simple majority.

Prop. 43 would not scrap existing taxes, but would apply to future tax initiatives. 

The Howard Jarvis Taxpayers Association, an anti-tax group that sponsored Prop. 43, argues the measure would close the loophole the court created and clarify that the requirement applies to all local special taxes. The two-thirds requirement has existed since 1849, when the state Constitution required a two-thirds vote for the state to borrow money, said Jon Coupal, president of the association. 

“The power to tax is (the) government’s most draconian power,” he told CalMatters. “The people of the state of California have made it a policy that when you are going to exercise that power, it should require a higher degree of consensus.”

But local government officials, labor unions and affordable housing advocates opposed the measure, arguing it would allow “minority rule” because it would only take a third of voters to block special taxes, making it harder for locals to connect revenue for essential services.

Darrell Roberts, president of the California Professional Firefighters union, called Prop. 43 an insurmountable roadblock to raising local funding, stressing that Los Angeles voters are voting this November on a half-cent sales tax to hire more firefighters. 

“The motivation behind Prop. 43 is clear. It’s the same motivation that is behind efforts to restrict mail voting and otherwise rig the system to prevent everyday citizens from having a say in their own government,” Roberts wrote in an op-ed.

Prop. 43 was sparked by opposition to the Los Angeles mansion tax, which added a 4% tax on real estate sales of more than $5.3 million and 5.5% on sales more than $10.6 million. The tax, approved by 58% of voters in 2022, has generated $1.4 billion in revenue for the city. 

Anti-tax advocates and businesses fought the tax, arguing it impeded local development, including affordable housing. Earlier this year, Coupal championed an extensive ballot measure that would have retroactively canceled out the mansion tax, but reached a last-minute compromise with the Democratically-led Legislature to put Prop. 43 on the ballot instead. 

Democratic legislators voted for the deal but have urged voters to reject it. Assembly Appropriations Chair Buffy Wicks, an Oakland Democrat who wrote Prop. 43, said she wrote it merely to kill a worse proposal.

“The clock was running out, and we had a choice to make: Leave a retroactive measure on the ballot that threatened billions in local funding, or accept a much narrower constitutional amendment that I still believed was bad policy,” she said.