The state’s Supreme Court’s new ruling might make it easier to raise funds for funding transit and infrastructure projects.
Last November, Sacramento County, California, floated a countywide tax hike to fund transportation projects. The measure would have funded a light-rail extension to the airport, the widening of a local freeway, and other projects. All seven cities in the county backed the effort, and Sacramento’s mayor loaned the campaign $200,000.
It won the support of more than 65 percent of Sacramento County voters. But in the uniquely byzantine world of California planning and finance, that meant it failed.
In November 2016 alone, at least six countywide measures to fund transportation projects up and down California—from San Luis Obispo to Sacramento to San Diego—got more than 50 percent of the vote but fell short of the supermajority required to pass such measures.
Planning, particularly raising money to build and maintain things, is a convoluted mess in California, largely thanks to two laws governing taxes and ballot initiatives—both of which started out as ballot initiatives themselves, naturally. (Government by ballot box is big in California.) But a state Supreme Court ruling this week could also mean measures like Sacramento County’s transportation tax will get easier to pass in the future.
The state’s infamous Proposition 13, passed in 1978, capped property taxes and set a high bar for local governments to collect any special taxes—taxes that go toward a specific purpose, like funding a park or road repairs. Because of Prop. 13, those must be passed by two-thirds of voters, instead of a simple majority. In 1996, Proposition 218 set even more requirements for when and how tax measures can be passed.
When it comes to planning and taxes, “everything you’ve seen in the last 40 years has been a workaround for Prop. 13, and then the courts desperately trying to make sense of all those workarounds,” says Bill Fulton, director of the Kinder Institute for Urban Research at Rice University who’s served stints as mayor of Ventura and director of planning for the city of San Diego.
Those requirements were put to the test by the ruling handed down this week, California Cannabis Coalition v. City of Upland, a case that focused on a provision of Prop. 218 that dictates when cities must hold elections on measures imposing a tax or fee.
Like with any big ruling tackling a complex topic, there’s some debate about just how far it goes. The court made clear that there’s a distinction between measures put on the ballot by citizen groups and ones advanced by local governments. But it’s unclear whether the court shot down every requirement for citizen initiatives, including the two-thirds threshold, or whether the justices merely provided an embossed invitation for someone to challenge that rule.
Regardless, “this decision could be transformational for local ‘self-help’ efforts,” wrote Ethan Elkind, director of the Climate Change and Business Program at UC Berkeley School of Law. In particular, a lowered bar to passing voter initiatives could be a boon when it comes to funding transit and infrastructure projects.
Even with the high hurdle of the two-thirds requirement, Californians have proven relatively receptive to special taxes that fund things like road repairs, traffic improvements and public transit projects. Between 2003 and 2016, 50 local sales tax measures to fund transportation projects were put on the ballot, and 27 were able to net supermajority votes and pass, according to a June report from the University of California Center on Economic Competitiveness. But another 15 of those measures received a simple majority of votes, but not a supermajority. Those are the ones that, had they been floated by citizens’ groups in a post-Upland world, would be law right now.
Martin Wachs, a UCLA professor who studies transportation financing, said that an easier route to passing transportation tax measures might not have a big impact in places like Los Angeles, where voters have already approved multiple funding measures. “It’s more likely what we would see is measures passing for the first time in some of the outlying areas and smaller areas where opposition to tax increases has been more substantial,” Wachs says.
But before Golden State suburban transit fans celebrate, Fulton has a few words of caution. Though citizen-led measures are often thought of as “direct democracy,” they can be less transparent than measures led by local governments. Campaigns take money to pull off—especially in states like California with expensive media markets—leaving citizen measures open to heavy influence from any special interest group that can put up financing.
“Someone’s cutting a deal in the back room to pay for the initiative,” he says. “You could have a transportation tax that has projects in it that benefit a very small number of people, or maybe even a few developers, but gets sold to the public as being in the public interest, and only needs 50 percent to pass, as opposed to a long public process that at least involved voting by representatives of each city, and comments and debate. There’s no guarantee that this would happen under this scenario.”
Fulton sees another potential pitfall if special-interest groups and citizen coalitions start putting their own transportation tax plans together: “It’s one thing to put a zoning measure on the ballot, that’s relatively simple. But to put a multi-decade transit tax on the ballot with a bunch of projects on it is complicated. How do you get the expertise to do that?”