TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
George Gabriel, Assistant to the City Manager
SUBJECT:Title
Consideration of a Resolution Opposing State Ballot Initiative No. 21-0042A1 Titled the “Taxpayer Protection and Government Accountability Act” (City Manager Moe).
ADOPT RESOLUTION NO. 23-0036
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 23-0036 opposing State Ballot Initiative No. 21-0042A1 titled the “Taxpayer Protection and Government Accountability Act.
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FISCAL IMPLICATIONS:
There are no fiscal implications associated with the recommended action. However, should the ballot initiative pass at the November 2024 election, the measure would have significant impacts on the City of Manhattan Beach’s ability to raise new revenue, recover costs or impose certain fines or penalties.
BACKGROUND:
On January 4, 2022, the California Business Roundtable filed the “Taxpayer Protection and Government Accountability Act.” On February 1, 2023, the ballot initiative qualified for the November 5, 2024, ballot.
The Taxpayer Protection and Government Accountability Act (Attachment #2) would amend the California Constitution with provisions that limit voters’ authority and input, adopt new and stricter rules for raising taxes and fees, and may make it more difficult to impose fines and penalties for violation of state and local laws. The measure puts billions of local government tax and fee revenues at risk statewide with related core public service impacts. The proposed constitutional initiative is sponsored by the California Business Roundtable. Major provisions of the ballot initiative include the following:
• Requires voter approval in order to apply an existing local tax to a territory that is annexed;
• Prohibits local advisory measures which allow voters to express a preference for how local general tax dollars should be spent;
• Retroactively requires all new or increased taxes adopted after January 1, 2022, to include a sunset date;
• Requires simple majority approval of the state electorate for all new or increased state taxes;
• Prohibits, as a condition of property development or occupancy, a fee regulating vehicle miles traveled;
• Prohibits local fees for services or permits to exceed the “actual cost” and defines “actual cost,” as the minimum amount necessary; and
• May require voter approval of fines and penalties for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties.
The measure is anticipated to put approximately $2 billion of voter-approved local government tax and fee revenues at risk statewide with related core public service impacts. The League of California Cities along with a broad coalition of local governments, labor, public safety leaders, and infrastructure advocates strongly oppose this ballot initiative.
DISCUSSION:
The Manhattan Beach City Council periodically reviews bills, initiatives, or legislation pending in other governmental agencies. The purpose of this is to outline the position of the City Council on priority issues and matters that impact the City’s ability to operate effectively, promote City interests and protect local authority.
In the state of California, cities use revenues raised from local taxes, fees and charges, and fines to pay for local services including, but not limited to, police and fire services, street and sidewalk maintenance, and recreation programs.
California State law prescribes the process for instituting new, or increasing existing, taxes and fees. Local governments seeking to institute new, or increase existing taxes and fees are required by law to comply with a clear public process. The proposed initiative would result in several changes that would impose greater restrictions on local governments’ ability to raise revenue to cover costs of providing services.
The California Legislative Analyst's Office released a summary of estimate outlining the proposal and fiscal effects on January 19, 2022 (Attachment #3). The League of California Cities and municipal financial expert Michael Coleman of CaliforniaCityFinance.com also prepared expert summaries regarding the initiatives impacts (Attachments #4 and #5).
The League of California Cities is requesting member cities adopt a resolution to demonstrate the harm this measure would cause to local communities and the people of California.
CONCLUSION:
Staff recommends that the City Council adopt Resolution No. 23-0036 opposing State Ballot Initiative No. 21-0042A1 titled the “Taxpayer Protection and Government Accountability Act.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 23-0036
2. Proposed Initiative File No. 21-0042A1
3. Summary of Estimate by Legislative Analyst and Director of Finance
4. League of California Cities Analysis
5. Fiscal and Program Effects of Initiative 21-0042A1 on Local Governments