Legislative Update

Assembly Approves Two Constitutional Amendments Threatening Taxpayers’ Rights

Sacramento Capitol

The Assembly approved two constitutional amendments September 6 that would impact taxpayer protections and the vote requirements needed to approve new taxes.

ACA 1 (Aguiar-Curry) proposes lowering the vote threshold from two-thirds to 55 percent to pass infrastructure-related local bonds and special taxes. This would strip taxpayers of the two-thirds vote requirement established by Proposition 13 to prevent local governments from increasing taxes in response to Proposition 13’s property tax limitations.

ACA 1 needed at least 54 votes to clear the Assembly, and was approved with a 55-12 vote.

The measure now moves to the Senate. If it receives at least 27 votes in the 40-member house, it will be placed on the ballot in 2024 and a majority vote in a statewide election will determine its fate.

“ACA 1 will lead to higher taxes – including higher property taxes to repay local bonds – and a higher cost of living in California,” CalTax President Robert Gutierrez said. “Proponents claim their goal is to develop more affordable housing, but their proposal would actually make everything in California less affordable by paving the way for major tax increases.”

CalTax noted that ACA 1 directly attacks section four of Article XIIIA of the California Constitution, established by Proposition 13 – the requirement that a two-thirds vote of the electorate is needed to increase local special taxes. (The other three sections establish a maximum uniform tax rate of 1 percent of real property’s assessed value; require acquisition-value assessments, in which the value of locally assessed real property is based on the purchase price or appraised value at the time of a change in ownership or new construction, plus an increase for inflation not to exceed 2 percent annually; and require a two-thirds vote of the Legislature to increase state taxes.)

On September 7, supporters of the measure amended SB 789 (Allen and Wiener) to place ACA 1 on the November 2024 ballot if it is approved by the Senate. ACA 1 includes language stating that its provisions apply to local measures that appear on the ballot in the same election, so the lower vote threshold would be in effect for the November election. Local officials are likely to view this election as favorable for tax measures.

The second measure approved by the Assembly is ACA 13 (Ward), which would require any statewide initiative that changes any vote requirements to receive the same votes in support as the vote requirement specified in the initiative.

ACA 13 was introduced in the last weeks of session in direct response to the Taxpayer Protection and Government Accountability Act, an initiative proposed by the California Business Roundtable that has qualified for the November 2024 ballot. The initiative would require statewide voter approval of all legislative tax increases, a two-thirds vote for all local special taxes, and a public vote for municipal fees.

Assembly Member Vince Fong said ACA 13 is a misguided attempt to change the rules of a pending election because of a policy disagreement.

“Direct democracy is a fundamental part of our state, history, and constitution,” Fong said. “Just because one doesn’t like an idea doesn’t justify changing the rules.”

ACA 13 was approved with a final vote of 57-19, and now goes to the Senate.

If approved by at least two-thirds of the Senate, ACA 13 will appear on the March 2024 ballot. If approved by a majority of voters in that election, the rules would change for the Taxpayer Protection Act – which qualified for the ballot in 2022 – and the initiative would need a two-thirds vote for passage in November. ACA 13 would not require ACA 1 to be approved by a 55 percent vote, because ACA 13 applies only to measures placed on the ballot by the public (additionally, it applies only to measures that increase vote thresholds, not those that decrease them).