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HomeMy WebLinkAbout2023-06-13; City Council Legislative Subcommittee; ; Taxpayer Protection and Government Accountability Act (2024 Ballot Measure)LEGISLATIVE SUBCOMMITTEE Staff Report Meeting Date: June 13, 2023 To: Legislative Subcommittee From: Jason Haber, Intergovernmental Affairs Director Staff Contact: Jason Haber, Intergovernmental Affairs Director jason.haber@carlsbadca.gov, 442-339-2958 Subject: Taxpayer Protection and Government Accountability Act (2024 Ballot Measure) District: All Recommended Action Review and discuss options concerning the city's position on the 2024 Taxpayer Protection and Government Accountability Act ballot measure. Discussion On February 21, 2023, the City of Carlsbad received written correspondence from the League of California Cities Executive Director and CEO calling on the city to adopt a resolution formally opposing a 2024 ballot measure being proposed by the California Business Roundtable (Exhibit 1). The League correspondence referenced a February 6, 2023, letter and fact sheet that was sent from the Californians for Taxpayer Protection and Government Accountability Ad Committee to Mayors and Council Members throughout the state requesting they endorse the Taxpayer Protection and Government Accountability Act ballot measure (Exhibit 2). Additional information, including the group's reasons for pursuing the initiative, is available at https ://taxpaye rp rotectio n. com/. The League's correspondence also references an Action Alert (available at https://www.calcities.org/advocacy/take-action#O), which characterizes the proposed measure as a "State Ballot Measure Restricting Voters' Input and Local Taxing Authority." The League's Action Alert requests that cities "make sure your city's voice is heard by adopting a resolution opposing the harmful measure." A sample resolution and a sample letter of opposition, as proposed by Cal Cities, are attached for Subcommittee consideration (Exhibits 3 and 4). This subject was considered by the Legislative Subcommittee on April 11, 2023. Representatives from the League of California Cities and the California Business Roundtable were notified and invited to address the Subcommittee in advance of the April 11, 2023, Subcommittee meeting. On that date, the Subcommittee received a presentation from the League of California Cities; however, the California Business Roundtable did not have a representative in attendance. As such, this item has been placed on the current agenda to provide an opportunity for a representative of Reform California, a 527 political action committee that supports the California Business Roundtable position regarding this matter, to address the Subcommittee. June 13, 2023 Item #3 Page 1 of 12 State law allows a public agency to adopt a position on a ballot measure as long as the position is taken at an open meeting where all voices have the opportunity to be heard. However, state law prohibits the use of public resources to campaign for or against a ballot measure. A summary of permissible and impermissible activities is included in Exhibit 5. Next Steps If the Subcommittee decides to recommend that the city adopt a position concerning the Taxpayer Protection and Government Accountability Act Ballot Measure, staff will work with the City Manager to place an item on a future City Council agenda for consideration. The language of any proposed resolution will be reviewed and revised, if needed, by the City Attorney's Office to ensure legal compliance. Public Notification Public notice of this item was posted in keeping with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours before the scheduled meeting date. Exhibits 1. Correspondence from the League of California Cities Executive Director and CEO 2. Endorsement Request from the Californians for Taxpayer Protection and Government Accountability Act Committee 3. Sample resolution of opposition 4. Sample letter of opposition 5. Ballot Measure Activities & Public Resources June 13, 2023 Item #3 Page 2 of 12 Exhibit 1 February 21, 2023 To: City Managers From: Carolyn Coleman, Executive Director and CEO, League of California Cities Re: California Business Roundtable Great to see everyone at the City Managers Conference in Carlsbad! As a follow up to my remarks during the Conference, I wanted to let you know that the California Business Roundtable has mailed a letter and fact sheet to Mayors and Council Members throughout the state requesting they endorse the Taxpayer Protection and Government Accountability Act (see attachment). In anticipation of you receiving questions from your elected officials, I want you to know the letter and fact sheet mischaracterize the impacts the measure will have on cities if the voters approve it in November 2024. Specifically, the measure: 1. Does not clear up "confusion" about what a tax is. Rather, it expands what a tax is by converting some fees into taxes. 2. Does not preserve the predictability of tax dollars. It actually creates fiscal uncertainty by making the measure retroactive to Jan. 1, 2022. 3. Does not preserve local control. It prevents a city from negotiating the rental and sale of its own property. 4. Cannot "eliminate hidden taxes" because there is no such thing as a hidden tax. s. Cannot "require truthful descriptions of new tax proposals" because truthful descriptions are already required. A general tax can be used for any governmental purpose, and a special tax must be used for the particular purpose earmarked by the voters. 6. Falsely argues that "massive increases in taxes and fees" punish hard-working families, when the measure in fact makes it more difficult for a city to punish municipal code violators and protect residents. No matter how the California Business Roundtable tries to paint a different picture, let me be clear: this measure is one of the biggest threats to local control that we have ever faced. Why do we all oppose it? 1. This measure calls for stricter rules for raising taxes, fees, assessments, and property-related fees that fund critical local services. June 13, 2023 Item #3 Page 3 of 12 2. The measure puts at risk the billions of dollars currently dedicated to funding critical local services by creating new mechanisms to challenge or repeal local revenue-raising measures. 3. It could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services that support homeless residents, mental health services, and more. 4. The measure reduces funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities. Your regional public affairs manager has shared an Action Alert calling on all cities to adopt a resolution formally opposing this measure. Currently, over 100 cities have passed resolutions. If you have not already adopted one, be sure your city is on record opposing this dangerous ballot measure as soon as possible. Thank you for all you do and for supporting Cal Cities! As always, please do not hesitate to reach out to me if you have any questions. Carolyn Carolyn M. Coleman Executive Director a nd CEO League of California Cities Office: 916.658.8275 Cell: 916.769.5729 ccoleman@calcities.org I www.calcities.org Twitter I Facebook I YouTube I Linkedln CAUTION: Do not o en attachments or click on links unless ou reco nize the sender an know the content is safe. June 13, 2023 Item #3 Page 4 of 12 TAXPAYER PR e TECTION Accountability Act February 6, 2023 The Honorable Katherine Aleman 2870 Clark Ave Norco, CA 92860-1903 Dear Council Member Aleman: ~--"'-.... -· t;.·,· ia,, RECEIVED CITY OF NORCO FEB 1 3 2023 CITY CLERK Exhibit 2 Five years ago, the will of the voters and the decades of tax law they created started unraveling in highly mistaken appellate court responses to the California State Supreme Court's decision in California Cannabis Coalition v. City of Upland. Two Courts of Appeal took this case beyond its holding to create significant loopholes in established tax law and policy relied upon wisely by voters and government for over forty years. Combined with several other court cases, including Ca/Chamber v. California Air Resources Board, the courts have created uncertainty and confusion that must be addressed. In an effort to close these loopholes and restore the tax policy prior to these decisions, we recently qualified the Taxpayer Protection and Government Accountability Act initiative for the November 2024 statewide ballot. The Act builds upon decades of popular voter-approved ballot measures, beginning with Prop. 13 in 1978 and further strengthened by Prop. 218 (1996) and Prop. 26 (2010). In the past decade, each of these ballot measures has been significantly weakened by the courts, unraveling the status quo and decades of established tax law for cities, counties, and the entire state. The Taxpayer Protection and Government Accountability Act has been enthusiastically supported by voters, as evidenced by the more than 1,430,000 signatures we submitted to local county registrars to qualify the Act for the 2024 ballot. Prop. 218 was settled law-undisputed by cities and counties-and created a clear framework that provided taxpayers certainty on new and higher taxes, while giving local jurisdictions the ability to raise both general and special taxes. In fact, local governments were so comfortable with the framework of Prop. 218, and their ability to raise necessary revenue under its provisions, that the League of Cities defended Prop. 218's taxpayer protection provisions in an Amicus Curiae brief filed in the California Cannabis Coalition v. City of Upland case: "The core issue in this case is whether a local tax measure proposed by a citizen of a municipal corporation (or other local government agency) through an initiative is subject to the same constitutional requirements as one proposed by the municipal corporation's governing body. The trial court held yes, but in an unprecedented Ad paid for by Californians for Taxpayer Protection and Government Accountability. sponsored by California homeowners. taxpayers. and businesses Ad Committee's Top Funders California Business Roundtable AMR Holdco Kilroy Realty LP Funding details at www.fppc.ca.gov June 13, 2023 Item #3 Page 5 of 12 0000328 opinion the Court of Appeal held that article XIII C's requirements do not apply to taxes imposed through the initiative process. As a result, the League finds itself ironically aligned in this case with the Howard Jarvis Taxpayers Association, proponents of Propositions 218 and 26, in arguing that a proper interpretation of the Constitution does not countenance different treatment for local tax measures, regardless of their origin, and certainly does not create an exemption for initiatives that swallows all the rules created by Proposition 218." (emphasis added) So, what does the Taxpayer Protection and Government Accountability Act do? In short, at the local level it restores the key provisions of Prop. 218, requiring special taxes placed on the ballot by citizen initiative to obtain a two-thirds vote of the electorate once again. In addition, the Act clearly clarifies the existing definition of what is a 'tax,' and requires either voters, or the local governing body, to approve all taxes and exempt charges. Despite the clear intent of the voters when they passed Prop. 13, Prop. 218, and Prop. 26, the courts have, for the last decade, created significant loopholes that directly contradict what voters approved at the ballot box. Lastly, to preserve local control and predictability of tax dollars, the Act requires local property tax revenue to stay in the county in which it is collected. There have been repeated attempts to direct this revenue to the state for redistribution back to the counties, forcing some counties to lose millions of dollars in local property tax revenue. Thanks to Prop. 13, local property tax revenue is one of the most predictable and stable funding sources for a county. The Taxpayer Protection and Government Accountability Act ensures these dollars-and the certainty they provide-stay within the county in which they were generated. The Act also applies many of these same provisions at the state level, requiring voters to approve all statewide taxes passed by the Legislature and requiring the Legislature to approve all fees and other charges, as defined by the measure. Attached please find a fact sheet on the measure, which gives additional information on the key provisions of the Act. Please do not hesitate to reach out if you have any questions regarding the measure or its provisions. Thank you, Robert C. Lapsley President California Business Roundtable June 13, 2023 Matthew Hargrove President and CEO California Business Properties Association Jon Coupal President Howard Jarvis Taxpayers Asso- ciation Item #3 Page 6 of 12 TAXPAYER PR6'TECTION and Government Accountability Act TaxpayerProtection.com California has the highest tax rates in America. Massive increases in taxes and fees over the past decade only add to the state's already sky-high cost of living -punishing hard-working families who are now struggling with soaring inflation. Even still, politicians, bureaucrats and special interests continue to make it harder for Californians to make ends meet. In 2022 alone, they considered nearly $200 billion in higher taxes and fees. THE SOLUTION The Taxpayer Protection and Government Accountability Act is a simple measure that gives voters the final say on new and higher taxes and closes court-created loopholes that have made it easier for special interests and politicians to raise taxes. ✓ Gives voters the final say on all new and higher taxes Requires all new taxes passed by the Legislature to be approved by voters. Restores two-thirds voter approval for all new local special tax increases. ✓ Eliminates all "hidden taxes" Clearly defines what is a tax or fee -addressing recent court decisions that overturned decades of established taxpayer protections. Prevents unelected boards and commissions from passing hidden taxes or fees without approval from elected officials or voters. ✓ Requires truthful descriptions of new tax proposals Holds politicians accountable by requiring they clearly identify how revenue will be spent before any tax or fee is enacted and ensures it is not diverted to other purposes. Ensures that the tax rate and length oftime a new or higher tax will be in effect is listed on the ballot. With families across California struggling and the cost of living continuing to skyrocket, we must act now. The Taxpayer Protection and Government Accountability Act will guarantee voters, not politicians, have the fina l say on whether or not to raise taxes, while maintaining current revenue and spending. Join our coalition to protect taxpayers and hold the government accountable! Ad pa id for by Californians for Taxpayer Protection and Government Accountabiljty. sponsored by California homeowners. taxpayers. and businesses Ad Committee's Top Funders California Business Roundtable AMR Holdco Kilroy Realty LP June 13, 023 Funding details atwww.fppcca.gov Item #3 Pa e 7 of 12 Exhibit 3 Sample Resolution to Oppose Initiative 21-0042A 1 WHEREAS, a n association representing California's wealthiest corporations and developers is spending millions to push a deceptive proposition aimed for the November 2024 statewide ballot; and WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and infrastruc ture, and would limit voter input by prohibiting local advisory measures where voters provide direction on how they want their local tax dollars spent; and WHEREAS, the measure c reates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including local infrastructure and our environment; and WHEREAS, the measure may make it much more difficult for sta te and local regulators to issue fines and levies on corporations that violate laws intended to pro tect our environme nt, public health and safety, and our neighborhoods; and WHEREAS, the measure puts billions of dollars currently dedicated to local services at risk and could force cuts to fire and e mergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, me ntal health services, and more; and THEREFORE, BE IT RESOLVED that the City/Town of [NAME] opposes Initiative 21- 0042A 1; BE IT FURTHER RESOLVED, that the City/Town o f [NAME] will join the No on Initiative 21-0042A 1 coalition, a growing coalition of public safety, education, labor, local government, and infrastructure groups throughout the state. We direct staff to email a cop y o f this adopted resolution to the League of California Cities at BallotMeasures@calcities.org. PASSED, APPROVED, AND ADOPTED this day __ of __ , 2023. June 13, 2023 Item #3 Page 8 of 12 SAMPLE OPPOSE LETTER Email a copy to BallotMeasures@calcities.org as well as your Regional Public Affairs Manager. ***CITY LETTERHEAD*** DATE Bismarck Obando Director of Public Affairs, League of California Cities 1400 K Street, Suite 400 Sacramento, CA 95814 RE: Letter Opposing Initiative 21-0042A 1 Exhibit 4 On DA TE, the City /Town of ____ voted to oppose Initiative 2 l -0042A l, a deceptive, developer-sponsored proposition aimed for the November 2024 statewide ballot that would significantly jeopardize cities' ability to provide essential services and infrastructure for our residents. The measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and projects and would limit voter input by prohibiting local advisory measures where voters can express a preference on how they want their local tax dollars spent. This measure creates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including impacts on local infrastructure and our environment. This measure also may make it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods. Unless defeated, the measure puts billions of dollars currently dedicated to local services at risk, and could force cuts to fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services, and more. PLEASE CITE SPECIFIC IMPACTS TO YOUR CITY THAT WOULD RESULT FROM THIS INITIATIVE. June 13, 2023 Item #3 Page 9 of 12 The measure benefits wealthy corporations and real estate developers while decimating our local communities and neighborh oods. You may list the City/Town of ____ ~in formal opposition to Initiative #21-0042A 1 and include our city as part of the growing coalition of public safety, labor, local government, infrastructure advocates, and other organiza tions throughout the state opposed to this deceptive proposition. Sincerely, NAME TITLE CITY /TOWN of -------' June 13, 2023 Item #3 Page 10 of 12 Exhibit 5 1 111!!11 I NSTITUTE 1oiz ~ LOCAL GOVERNMENT" Ballot Measure Activities & Public Resources A s important as ballot measures are to policymaking, public agencies and officials face important restrictions and requirements related to ballot measure activities. The basic rule is that public resources may not be used for ballot measure campaign activities. Public resources may be used, however, for informational activities. The key difference between campaign activities and informational activities is that campaign activities support or oppose a ballot measure, while informational activities provide accurate context and facts about a ballot measure to voters. This document summarizes some of the key applications of these principles. The law, however, is not always clear and the stakes are high. Missteps in this area are punishable as both criminal and civil offenses. Always check with agency counsel for guidance on how these rules apply in any specific situation. Public Agency Resources May Be Used To 0 Draft and place a measure on the ballot. 0 Pay for polling to determine whether to place a measure on the ballot. 0 Prepare and distribute an objective and fact-based analysis on the effect a ballot measure may have on the agency and those the agency serves. 0 Express the agency's views about the effect of the measure on the agency and its programs, provided the agency is exceedingly careful not to advocate for or against the measure's passage. 0 Adopt a position on the measure, as long as that position is taken by the governing body at an open meeting where all voices have the opportunity to be heard. 0 Respond to inquiries about the ballot measure in an objective and fact-based manner. Considerations 0 Agency communications about ballot measures should not contain inflammatory language or argumentative rhetoric, or urge any particular vote. 0 Public employees and elected officials may, on their own time and with their own resources, engage in the following activities: » Work on ballot measure campaigns or attend campaign-related events on personal time (for example, evenings, weekends and lunch hours). » Make campaign contributions to ballot measures, using one's own money or campaign funds (while observing campaign reporting rules). » Send and receive campaign related emails or text messages using one's personal (non-agency) account or device. » Personally endorse or oppose a measure. BALLOT MEASURE ACTIVITIES & PUBLIC RESOURCES I APRIL 2022 June 13, 2023 Item #3 Page 11 of 12 1 11111 I NSTITUTE IOR ll!I LOCAL GOVERNMENT ' Public Officials Should Not l!l Engage in campaign activities while on agency time, in uniform, or with agency resources. l!l Use agency resources (including office equipment, supplies, staff time, vehicles or public funds) to engage in advocacy-related activities, including producing campaign-type materials or performing campaign tasks. l!l Use public funds to pay for campaign-related expenses (for example, television, radio, digital advertising, bumper stickers or signs) or make campaign contributions. l!l Use agency devices or email addresses for campaign communication activities. Best Practices 0 Inform agency employees and public officials about these legal restrictions, particularly once a ballot measure affecting the agency has qualified for the ballot. 0 Include language on informational materials that clarifies that they are for informational purposes only. For example, "these statements shall not be construed in support of or against XX ballot measure." WHEN DO THESE RESTRICTIONS KICKIN? The rules against the use of public resources for campaign activities certainly are triggered once a measure has qualified for the ballot. However, the rules also may apply while a clearly identified measure is in the qualification process. Agencies should always consult with agency counsel regarding the permissibility of specific activities. DISCLOSURE REQUIREMENTS Ballot measure expenditures that cross the line into advocacy are also subject to disclosure (transparency) requirements under California's Political Reform Act (Government Code sections 81000 et seq.). Thank You to Our Partners The Institute for Local Government would like to thank the following partners for their support and contributions to this publication: Best Best & Krieger, LLP Burke Williams & Sorensen, LLP Colantuono, Highsmith & Whatley Hanson Bridgett Kronick Moskovitz Tiedemann & Girard Liebert Cassidy Whitmore Renne Public Law Group Richards Watson & Gershon /LG is the non-profit training and education affiliate of the League of California Cities, California State Association of Counties and the California Special Districts Association which represent 1000s of local agencies across the state. /LG helps local officials and staff navigate the constantly changing landscape of their jobs by offering training, technical assistance, written resources and facilitation services specifically designed for local agencies. From leadership to public engagement to housing and workforce, /LG can help with a wide range of issues. Visit www.ca-ilg.org for more infonnation. © 2022 Institute for Local Government. All rights reserved. 2 BALLOT MEASURE ACTIVITIES & PUBLIC RESOURCES I APRIL 2022 June 13, 2023 Item #3 Page 12 of 12