BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SCA 8 HEARING: 5/15/13
AUTHOR: Corbett FISCAL: No
VERSION: 12/14/12 TAX LEVY: No
CONSULTANT: Grinnell
TRANSPORTATION PROJECTS: VOTER APPROVAL
Lowers the vote threshold to levy, increase, or extend
special taxes for transportation from 2/3 to 55%.
Background and Existing Law
The California Constitution states that taxes levied by
local governments are either general taxes, subject to
majority approval of its voters, or special taxes, subject
to 2/3 vote (Article XIII C). Proposition 13 (1978)
required a 2/3 vote of each house of the Legislature for
state tax increases, and 2/3 vote of local voters for local
special taxes. Proposition 62 (1986) prohibited local
agencies from imposing general taxes without majority
approval of local voters, and a 2/3 vote for special taxes.
Proposition 218 (1996) extended those vote thresholds to
charter cities, and limited local agencies' powers to levy
new assessments, fees, and taxes. Local agencies generally
propose to increase taxes by adopting an ordinance or a
resolution at a public hearing. The Constitution further
bars school districts from imposing general taxes, but
allows school districts, community college districts, and
county offices of education to issue bonded indebtedness
for school facilities with 55% percent approval
(Proposition 39, 2000).
Cities and counties may impose transactions and use taxes,
basically additional sales and use taxes levied in their
jurisdiction, provided that the combined rate in the county
does not exceed 2 percent, upon a 2/3 vote of the local
agency's governing board and voter approval according to
the above.
Additionally, SB 314 (Murray, 2003) authorized MTA to levy
a .5% transactions and use tax that was not subject to the
2% countywide cap for six and a half years, but MTA never
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put the measure to the voters. AB 2321 (Feuer, 2008)
reauthorized MTA to place the .5% transactions and use tax
for 30 years before the voters subject to the cap. SB 314
and SB 2321 required MTA to spend the tax proceeds in
certain ways or for specified projects. MTA placed a sales
tax ordinance, referred to as Measure R, on the November
2008 ballot. 67% of the voters approved the increase.
Los Angeles County Transportation Commission has two
additional .5% transactions and use taxes still in effect:
one enacted on April 1, 1991 and one enacted on July 1,
1982
Proposed Law
Senate Constitutional Amendment 8 lowers the vote threshold
for local agencies imposing, extending, or increasing a
special tax to fund local transportation projects within
their jurisdiction to 55%. The measure also makes
conforming changes to the Constitution.
SCA 8 additionally requires a local agency that previously
imposed a tax under a 2/3 vote from to first complete
capital projects funded by that tax before spending
proceeds from a tax approved by 55% of voters
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . According to the author, "State
and federal funding have been unreliable over the past
years for Alameda County. Alameda has seen unprecedented
service cuts to buses, trains, and severe underinvestment
in roads, highways and pedestrian paths. As a result,
Measure B1 was placed on the Alameda County Ballot this
past election cycle. The measure called for a special tax,
a half cent increase to the existing half cent sales tax to
help pay for improvement to roads, bicycle routes, bus
service and extension of BART to Livermore. Measure B1
required a two-thirds supermajority vote for approval,
because in California, when a local sales tax measure is
earmarked for a specific purpose, it requires a higher
SCA 8 - 12/14/12 -- Page 3
threshold for approval than local sales tax measures that
are not earmarked for specific purposes. Measure B1 of
2012 fell just 0.14 percent short of a two-thirds vote or
lost by 600 votes. Supermajority votes are intended to
avoid "tyranny of the majority" by encouraging deliberation
and compromise as proponents attempt to gather enough votes
to reach a supermajority. However, supermajorities can
have the unintended consequences of "tyranny of the
minority" - a minority can prevent the will of the
majority. Although the majority of Alameda County
residents need reliable and efficient transportation
options and is will to pay their fair share, a minority
vote bloc was able to dictate transportation policy. All
California residents need reliable and efficient
transportation. To receive federal and state matching
funds, counties must raise their fair share, irrespective
of a minority of voters or face the alternative - 100
percent county financing or a crumbling and outdated
transportation system.
2. More or less . Majority rule is a two-edged sword:
democratically elected governments are supposed to enact
policies that the voters want, but both federal and state
systems of government restrict the majority's ability to
oppress a minority interests. For the great majority of
public issues, fifty-percent plus one of a legislative body
or an electorate rule. But for some issues, the United
States and California Constitutions provide that a majority
is not enough and a higher threshold is necessary, such as
amending the U.S. Constitution, impeaching a president, or
overriding a veto. States largely import the 2/3 vote from
the United States Constitution into their own for those
same purposes, but also require 2/3 vote on taxes or other
measures. In a series of voter initiatives, Californians
have elevated local special tax increases and legislatively
enacted state tax increases to this level, while almost
every other change can be enacted by majority vote; local
agencies can enact general taxes, and voters can approve
tax initiatives increasing state taxes by majority vote, as
they did with Proposition 30 (2012). As such, local
agencies need a majority vote to assess taxes and spend the
proceeds on whatever purposes they want to, but 2/3 if they
restrict the use of the tax proceeds. Supermajorities of
the Legislature are necessary to increase taxes, but only
majorities of voters can.
SCA 8 - 12/14/12 -- Page 4
SCA 8 adds another layer onto the complex system above. If
enacted, local agencies can enact special taxes for
transportation purposes at 55% vote, paralleling
Proposition 39's similar allowance for school bonds.
However, the measure doesn't affect thresholds for any
other kind of tax. The first policy question for the
Committee is: what should be the voting threshold for local
special taxes? The Legislative Analyst's Office says
there's no right answer, as requirements vary across
states, but adds that the process should be easy enough for
voters to understand and reflect overarching objectives for
voter participation in tax decisions. The second is:
should the thresholds be different based on the use of the
tax proceeds, like transportation? The Committee may wish
to consider the reasons for affording transportation taxes
special treatment when contemplating the overall system of
voter thresholds necessary to increase taxes.
3. Join the party . The Committee will hear five other
measures that change the vote threshold for special taxes:
SCA 3 (Leno) - allows school districts, community
college districts, and county office of education to
levy parcel taxes at 55% vote.
SCA 4 (Liu) - identical to this measure except this
one does not include SCA 4's restriction on local
agencies spending proceeds from new taxes until
completing capital projects from previously imposed
taxes.
SCA 7 (Wolk) - lowers the vote threshold for bonded
indebtedness incurred to construct, reconstruct,
rehabilitate, or replace public libraries; al-lows
local agencies to levy, extend, or increase special
taxes at 55% vote to fund public libraries.
SCA 9 (Corbett) - allows local agencies to levy,
extend, or increase special taxes at 55% vote for
community and economic development projects.
SCA 11 (Hancock) - allows local agencies to levy,
extend, or increase special taxes at 55% vote for any
purpose.
Support and Opposition (05/09/13)
Support : California State Association of Counties;
California Transportation Commission; Capitol Corridor
Joint Powers Authority; City of Petaluma; City and County
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of San Francisco; County of Tulare; League of California
Cities;
Metropolitan Transportation Commission; Peninsula Corridor
Joint Powers Board (Caltrain); Running Springs Water
District; San Mateo County Transit District; San Mateo
Transportation Authority; San Mateo County Transit
District; San Mateo County Transportation Authority; Santa
Clara Valley Transportation Authority; Self-Help Counties
Coalition; Silicon Valley Leadership Group; Solano
Transportation Authority; Southwest California Legislative
Council; Transportation Agency for Monterey County.
Opposition : Apartment Association of Greater Los Angeles;
Apartment Association California Southern Cities; Apartment
Association of Orange County;
Associated Builders and Contractors of California;
California Ambulance Association; California Asian Pacific
Chamber of Commerce; California Association of Winegrape
Growers; California Business Properties Association;
California Chamber of Commerce; California Farm Bureau
Federation; California Grocers Association; California
Manufacturers and Technology Association; California
Retailer Association; California Taxpayers Association;
Camarillo Chamber of Commerce; East Bay Rental Housing
Association; Howard Jarvis Taxpayers Association; National
Federation of Independent Business; Nor Cal Rental Property
Association; Orange County Association of Realtors; San
Diego County Apartment Association; Santa Barbara Rental
Property Association; Tulare County Board of Supervisors;
Western Manufactured Housing Communities.