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League of Women Voters of California

LWV California Education Fund Nonpartisan Analysis of

Proposition 218

Voter Approval for Local Government Taxes. Limitations on Fees and Assessments.

Initiative Constitutional Amendment

The Question

Should local government's authority to impose taxes, property-related assessments, and fees be subject to voter approval?

The Situation

Cities, counties, school districts, fire districts, library districts, and many other agents of local governments use taxes, assessment, and fees to raise revenues to pay for the services they provide. Local governments currently have the authority to raise some of these revenues without voter approval.

The Proposal

Proposition 218 provides that:
  • all future local general taxes must be approved by majority vote of the people and existing local general taxes established after December 31, 1994, without a vote of the people, be placed before the voters within two years.
  • only property owners could vote on assessments, or, if a court voids this provision, approval would require a two-thirds vote of the electorate.
  • proposed assessments and fees must be submitted to property owners for approval, after a detailed notice and public hearing.
  • schools and other public agencies that own parcels in an assessment district must pay assessments.
  • votes on assessments must be weighted proportionately on the basis of the amount that each parcel owner would pay.
  • no assessment or fee can be higher than a parcel's share of a project's cost or service delivered to that parcel.
  • a property-related fee cannot be charged for police, fire, library, ambulance, or any other service available to the general public.
Fiscal effect: The Legislative Analyst estimates that local governments would probably lose more than $100 million annually in the near future, and longer-term losses could potentially exceed hundreds of millions of dollars annually. There would be comparable reductions in spending for local services.

Supporters Say

  • local government can still raise money for local services, such as police, fire, and education, as long as officials convince voters that the taxes are really necessary.
  • property owners will be guaranteed the right to vote on homeowner assessments or fees and on taxes levied on utilities.
  • utility lifeline rates for the elderly and disabled would not be affected.

Opponents Say

  • Proposition 218 would reduce current funding for police, fire, library, park, emergency programs, and senior and disabled services in California.
  • corporations, wealthy landowners, foreigners, and developers would have more voting power than average homeowners.
  • subsidized Lifeline utility programs for seniors and disabled citizens, which are funded by property tax assessment, would be prohibited.
(Analysis prepared by the League of Women Voters of California Education Fund.)

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Last updated: October 20, 1996
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