Should the California Constitution be amended to require two-thirds vote approval for the imposition of certain state and local fees that now require majority vote approval?
State and local governments impose a variety of taxes, fees and charges on individuals and businesses. Taxes typically fund public services such as education, prisons and health programs, and generally require two-thirds vote approval. Some state taxes may be approved by a majority vote if the overall effect of the law is revenue-neutral. In contrast, fees and charges, such as user fees and regulatory fees, typically fund a particular service or program related to activities of assessed individuals or businesses and usually require majority approval. Disagreement has emerged regarding differences between regulatory fees and taxes, but the California Supreme Court has upheld the use of regulatory fees for mitigation of adverse consequences to the public due to business activities.
Proposition 26 would expand the definition of a tax and a tax increase so that more revenue-generating proposals would require two-thirds vote approval at the local and state levels. Major provisions would:
- Classify as taxes some fees and charges that government currently may impose with a majority vote. These fees generally fund mitigation of health, environmental and socioeconomic harm caused by business activities.
- Require two-thirds approval by the legislature of any law that increases taxes on any taxpayer, even if the overall effect of the law is revenue-neutral.
- Repeal some approved 2010 state laws that conflict with Proposition 26 unless the laws are again approved by a two-thirds vote.
Depending on future actions of local governing bodies, local voters and the legislature, changes in the approval requirement–over time–could reduce government revenues and spending at both local and state levels that in the aggregate would total billions of dollars annually compared with what otherwise would have occurred.
- Prop 26 will close a loophole that allows politicians to approve taxes by calling them "fees" so that they can be passed with a majority vote.
- Prop 26 will repeal the legislature’s 2010 budget-solution gimmicks if those majority-passed bills cannot muster two-thirds approval.
- Prop 26 will preserve California’s strong environmental and consumer protection laws while protecting legitimate fees.
- We should not write special protections for polluters into the California Constitution.
- Changing the rules to allow repeal of tax laws already passed in 2010 would create havoc in an already unstable budgetary environment.
- Prop 26 will make it much harder to enact fees on large companies that cause harm to the environment, such as the Gulf oil spill, leaving taxpayers to pay for the clean-up.