By Lou Binninger
The Howard Jarvis Taxpayers’ Association (HJTA) informed the Yuba County Supervisors today that their Measure K - 1% sales tax increase violates Proposition 218 “The Right to Vote on Taxes Act.” Proposition 218 amended the State Constitution to define “Special Tax.” “Prop 218 imposed a mandatory two-thirds voter approval requirement on all special taxes,” according to the HJTA letter.
Although the supervisors used hundreds of thousands of tax dollars to promote Measure K in spite of public protests, used wording that the tax was “special” and reserved for “public safety and essential or vital services” the ballot measure is described as only needing a majority of votes to pass. This is wrong and violates the law according to HJTA.
The HJTA letter quotes numerous laws that the county violated and bluntly states “Measure K is a special tax. It will need a two-thirds voter approval, not a simple majority.”
HJTA refers supervisors to findings on a previous lawsuit decided in favor of HJTA by the California Court of Appeals against the City of Roseville fifteen years ago. That city purposed a majority vote on what in reality was a special tax needing a two-thirds majority approval. The details in the Roseville case were basically identical to Measure K’s described purpose, wording and promotion.
The HJTA letter said that, “Political maneuvering around Proposition 218’s two-thirds voter approval requirement for a special tax is frowned upon.”
HJTA says that “Measure K is a special tax because it specified its purposes and may not be used generally. In fact, the Ordinance complies with the statutory requirements for a proposed special tax: A) A statement indicating the specific purposes of the special tax; B) A requirement that the proceeds be applied only to the specific purposes pursuant to subdivision A); C) An annual report pursuant to Section 500.75.3.”
Judging from the ordinance, public documents, and promotion of Measure K, HJTA concluded that “The Board thus seems cognizant that Measure K is a special tax because it follows the statutory formula.”
Did the Board’s legal counsel misunderstand the law’s requirements by crafting an ordinance needing a two-thirds vote but declaring only needing a majority for passage? Or, did they attempt to have it both ways to deceive the voters?
HJTA says, “Unfortunately, should the Board pass Measure K on less than two-thirds voter approval, it would violate Proposition 218. Consequently, Measure K could be subject to costly litigation.”
HJTA then recommends that the Board declare that Measure K will need a two-thirds vote to pass or consider other general tax measures or budget resolutions to address their pension and health care funding shortfall.
Will the board agree with HJTA or go to litigation? There was no mention in the HJTA letter of the Supervisors unanimously approving spending hundreds of thousands of tax dollars to take more of the voters’ money through increased taxation which is illegal. Are the County Administrator, County Counsel, and the Supervisors personally liable for this misappropriation of funds?
HJTA may have the answer to that as well.
HOWARD JARVIS, Founder (1903-1986) JON COUPAL, President TREVOR GRIMM, General Counsel, TIMOTHY BITTLE, Director of Legal Affairs, HOWARD JARVIS SACRAMENTO OFFICE: 921 11th Street, Suite 1201
Sacramento, CA 95814 (916) 444-9950, Fax:(916) 444-9823 www.hjta.org
September 26, 2018
Rachel Ferris, Clerk of the Board of Supervisors Yuba County Board of Supervisors
Re: Measure K
VIA Email and Priority Mail
Dear Yuba County Board of Supervisors,
In 1996, HJTA authored and principally sponsored Proposition 218, the "Right to Vote on Taxes Act." Proposition 218 amended the California Constitution to define "special tax." It also imposed a two-thirds voter approval requirement on all local special taxes.
HJTA understands the Board of Supervisors adopted Ordinance No. 1575 on August 9, 2018. The Board will place it on the November 2018 ballot for voter approval. Known as Measure K, it proposes a 1% sales tax. It will be called the "Public Safety/Essential Services Protection Ordinance."
The Ordinance purports to require only a majority vote, yet dedicates all proceeds to a "public safety/essential services trust fund or account." (Ordinance§§ 5.60.030(1); 5.60.160.) Under Proposition 218, a "special tax" is "any tax imposed for specific purposes." (Cal. Const., Art. XIIIC § l(d).) Further, "No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote." (Cal. Const., Art. XIII C § 2(d).) Measure K is a special tax. It will need two-thirds voter approval, not a simple majority.
HJTA litigated the issue presented by Measure K fifteen years ago. Like Yuba County, the City of Roseville proposed Measure Q "to ratify [a tax] and to restrict its use to certain specified purposes." (Howard Jarvis Taxpayers Association v. City of Rosevi]le (2003) 106 Cal.App.4th 1178, 1181.) The City's specified purposes were to fund police and fire departments, parks, recreation, and libraries. (Id. at p. 1182.) The Court of Appeal deemed Measure Q a special tax because of its "multiple specific purposes" and specifically disagreed with the City's argument that there could exist a "'hybrid [specific general services] tax"' not subject to two-thirds voter approval under Proposition 218. (Id. at pp. 1185, 1187.) Like Measure Q in Roseville, Measure K has multiple specific purposes.
Measure K's purposes are public safety and essential services protection. Signs promoting Measure K say "Keep Yuba County Safe." The terms "safety'' and "essential" leave room for interpretation." Safety," for example, would exclude library services. "Essential" means absolutely necessary or extremely important. Inevitably, "safety'' and "essential" cannot refer to everything in Yuba County's budget.
To call something "essential" means that something else is not. The "Farm Advisor/Agriculture Building" budget is one example. Pension liabilities also have nothing to do with safety or essential services. Restricting a tax to "safety'' or "essential" services automatically makes that tax special. Roseville shows there is no way around it.
Political maneuvering around Proposition 218's two-thirds voter approval requirement for a special tax is frowned upon. In Roseville, the Court said: "a local government must forgo any electoral advantage that might be gained from limiting the use of revenues to specific purposes." (Id. at p. 1189.) In the case of Measure Q, the Court said it appeared limiting the use of funds was "to gain an advantage among voters" since "most people believe that police, fire, parks and recreation, and library services are among the most important local government services.... Applicable constitutional provisions were enacted to avoid this type of political maneuvering." (Id. at p. 1189, n. 3; see also McDonough v. Superior Court (2012) 204 Cal.App.4th 1169 [ballot language threatening loss of fire, police, and community services likewise disapproved].)
Measure K is a special tax because it specifies its purposes and may not be used generally.
In fact, the Ordinance complies with the statutory requirements for a proposed special tax:
(a) A statement indicating the specific purposes of the special tax.
(b) A requirement that the proceeds be applied only to the specific purposes identified pursuant to subdivision (a).
(c) The creation of an account into which the proceeds shall be deposited.
(d) An annual report pursuant to Section 50075.3. (Gov. Code,§ 50075.1.)
Measure K states the specific purposes of the tax in its title and in Section 5.60.160, requires proceeds to be applied only to those purposes in Section 5.60.160, creates an account in Sections 5.60.160 and 5.60.170, and requires that a Citizens' Oversight Committee review the "use of that revenue" and "provide an audit report ... at least annually'' in Section 5.60.l70(6)(a). The Board thus seems cognizant that Measure K is a special tax because it follows the statutory formula.
I have enclosed copies of the Roseville and McDonough cases. Understandably, the Board must budget for Yuba County. Unfortunately, should the Board pass Measure K on less than two-thirds voter approval, it would violate Proposition 218. Consequently, Measure K could be subject to costly litigation. HJTA urges the Board to acknowledge that Measure K requires a two-thirds vote, or to consider a general tax or other budget resolutions to meet the needs of Yuba County. We hope you find this information helpful going forward.
Laura E. Murray Senior Staff Attorney