Lowering the bar for raising local taxes

California is home to some of the nation’s highest taxes. It may get even worse, as cities find a way to get around the 66% tax increase threshold. Richard Colman from California Political Review explores.

In early September 2020, the California Supreme Court refused to review a lower state court’s decision that makes raising local taxes easier.

Under California’s Proposition 218 of 1996, a local government’s decision to raise taxes must win voter approval.  Under this proposition, a local government could raise general-purpose taxes (such as a sales tax) by a simple majority vote.  However, a tax for a specific purpose (such as early childhood education) would require a two-thirds vote.

The California Supreme Court’s action (really an inaction), in effect, changed the rules for raising local taxes.  The court declined to intervene in a lower court’s decision that ruled that local tax increases passed by voter initiatives only need a simple majority of votes to pass, not a two-thirds majority.  However, the Supreme Court’s action did not change the  two-thirds requirement for passage of ballot measures sought by local governments.

California can be considered an overtaxed state.  Currently, California has the nation’s highest sales tax, the nation’s highest (or second highest) gasoline tax, and the nation’s top bracket (13.3 percent) for the state’s personal income tax.

This article originally appeared in California Political Review.

Follow Opportunity Now on Twitter @svopportunity.

Image by David Grant