BILL ANALYSIS
ACA 9
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Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
ACA 9 (Huffman) - As Amended: June 26, 2009
Policy Committee: Revenue and
Taxation Vote: 6-3
Local Government 5-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This ACA lowers local vote thresholds for special taxes and bond
authorizations, and creates an exception to the 1% property tax
rate limitation for local debt service on bonds. Specifically,
the bill:
1)Exempts from the 1% property tax rate limitation debt service
incurred by cities, counties, and special districts to fund
public improvements related to transportation, public safety,
and low and moderate income housing.
2)Lowers the vote requirement for a city, county, or special
district to impose a special tax from a two-thirds to 55%.
3)Lowers the vote requirement for a city and county to incur
bonded indebtedness from two-thirds to 55%.
4)Includes various accountability measures.
FISCAL EFFECTS
1)Moderate GF costs of about $220,000 in 2009-10 to the
Secretary of State to place this measure in the statewide
election voter pamphlet. This estimate assumes about four
pages at $55,000 per page.
2)Potentially substantial local government special tax revenue
increases, to the extent that lowering the voter approval
threshold from two-thirds to 55% results in the approval of
more special tax measures.
ACA 9
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3)Potential increases in local infrastructure spending, to the
extent the exemption from the 1% property tax rate limitation
and the reduced voter approval threshold results in greater
use of infrastructure bonds.
COMMENTS
1)Background . Constitutional requirements for voter approval of
tax measures were initiated with the passage of Proposition 13
in 1978, and solidified with the passage of Proposition 218 in
1996. The latter measure clarified that general taxes for
general governmental purposes require approval of a majority
of voters, while special taxes for any specified purposes must
be approved by two-thirds of voters. Proposition 13 also
limits the general property tax rate to 1%, but subsequent
amendments to the Constitution provided an exception to this
limitation for debt service on infrastructure bonds approved
by 55% of local voters and issued by K-12 districts, community
college districts, and county offices of education.
2)Rationale. The purpose of this bill is to make it easier for
local voters to approve special taxes and bond-supported
infrastructure projects. The author maintains that "ACA 9
brings the conversation back to the voters about how to fund
local needs." The author also notes that that "for many
communities around the state, the quality, and indeed the
viability of critical services like police and fire
protection, schools, libraries, parks, road maintenance, and
flood control will be in jeopardy without additional revenues.
Yet, to secure essential funding for these services, local
governments face the daunting prospect of bringing a special
tax measure to the voters and winning two-thirds approval."
3)Opponents (including Cal-Tax, the Howard Jarvis Taxpayers'
Association, and the California Association of Realtors) argue
that current voter thresholds ensure that tax increases are
carefully deliberated, that general consensus is achieved
before taxes are raised, and that tax increases are a last
resort.
4)Related Legislation . This year there are several other
measures revising voting thresholds for various local
purposes. These include ACA 15 (Arambula), ACA 10 (Torlakson),
SCA 12 (Kehoe), and SCA 6 (Simitian).
ACA 9
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Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081