California Supreme Court To Decide Voter Approval Threshold on Taxes

The Chargers stadium initiative and other tax initiatives stand in balance.

Fees and special assessments specifically earmarked for certain purposes like infrastructure upgrades, stadiums or sales-tax hikes are particularly hard to pass in California because of the state's stringent two-thirds voter approval requirement, which was recently lowered by an appellate court.

That lower threshold now stands in jeopardy as the state's highest court has agreed to weigh-in on the issue.

The California Supreme Court will decide whether or not certain tax increases need the approval of two-thirds voters or whether a simple majority is sufficient, when those proposals initiate with a citizen's request.

A change in precedent could drastically impact California's political landscape, including whether or not the Chargers can garner enough to support to build a stadium in downtown San Diego.

"I can’t think of anything that would change California politics more," said Voice of San Diego's Scott Lewis. "This would have ramifications far beyond our little sports drama."

The decision to take up the case marks a potential reversal from a recent appellate court ruling that would have lowered the threshold for voter approval to a simple majority.

The appellate court decision, if unchallenged, would have brought California more in line with other states like Texas and Colorado that have approved building stadiums in recent years with a simple majority of voters.

Tax increases for general purposes still only require a simple majority.

Attorney Cory Briggs, backing the Citizens' Plan, said his initiative is not impacted by the decision, because the money collected from a proposed hotel tax would be deposited into the city's general fund and not specially earmarked for certain purposes.

"The significance locally is that the Chargers no longer have the benefit of the lower appellate court ruling that says they would only need 50 percent plus one for their special tax," Briggs said. "They now face uncertainty for the next couple years."

The state's highest court could take years to make a decision.

City Attorney Jan Goldsmith said the ruling would have far-reaching impacts across the state and even just the signal that the CA Supreme Court has taken up the case means the long-established two thirds voter approval requirement stands.

"Absent further court rulings, we plan to return to well-established law requiring two-thirds voter approval," Goldsmith said.

Briggs, however, said the decision for the CA Supreme Court to review the appellate court’s ruling means only uncertainty for the next few years.

"You can't read anything into it," Briggs said. "Just because the Supreme Court is intervening doesn't mean they are going to reverse lower court. They'll take it just to settle the controversy sooner rather than later."

Besides the Chargers proposal to increase local hotel taxes and build a stadium downtown with some public money, the ruling could lower voter approval on school bond measures, sales tax hikes, or other tax increases, as long as those proposals initiate with a citizen's request.

It's not good news for the Chargers.

If their plan passes with more than 50 percent of the vote but less than the two-thirds, execution could be delayed for years as the high court decision is made, according to Lewis.

"This certainly complicates their picture," Lewis said. "With the appellate court's decision, they had a much smaller hurdle."

Briggs said he foresees no impact on the Citizens' Plan because there is no special earmarking, but the City Attorney doesn't agree.

Having both plans on the November ballot could potentially confuse voters, but Briggs said it's of no concern.

"We’re very confident that the voters are capable of evaluating the proposal and making a decision one way or another," Briggs said.

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