12 months ago

The right to vote on taxes: California Cannabis Coalition v. City of Upland

By Meriem L. Hubbard Senior Attorney

Today PLF filed an amicus brief in California Cannabis Coalition v. City of Upland.  The case was accepted for review in the California Supreme Court in late June.  Despite its name, the case is not about marijuana.  It is about Californians’ right to vote on taxes.  That right was established through a string of voter-approved referenda beginning with Proposition 13 (property taxes), and followed by Proposition 62 (special and general taxes), Proposition 218 (taxes, assessments, fees, charges), and Proposition 26 (levies, charges, exactions).

Generally, taxation cases are brought against government entities when they refuse to let the public vote on taxes, fees, assessments, and other charges.  But this case is different. Here, the California Cannabis Coalition sued after it had gathered enough signatures in the City of Upland to (1) repeal a city ordinance banning medical marijuana dispensaries, (2) permit and establish standards for the operation of those dispensaries, and (3) require that each dispensary pay the City an annual fee of $75,000.

The City determined that it would only cost slightly more than $15,000 to issue a license and conduct annual inspections of a medical marijuana dispensary.  The remaining $50,000 would would go to the general fund, so, under California law, it is a proposed general tax.  Pursuant to Proposition 218, a proposed general tax must be voted on by the public in an election where the members of the City’s governing body are on the ballot.  The Cannabis Coalition argued that is wrong, because the tax was not imposed by the City, but rather by an initiative drafted and sponsored by the Cannabis Coalition.  The trial court disagreed, but the appellate court reversed and ruled for the Cannabis Coalition.

PLF’s brief discusses the reasons for what is know as the California tax revolt, which began with Proposition 13 in 1978.  Voters were initially frustrated by some of the highest property taxes in the county.  In fact, California property taxes exceeded the national norm by approximately 52 percent.  The voters hoped that Proposition 13 would fix the problem, but that did not happen because politicians devised creative ways to avoid voter approval of taxes and other charges.  The voters fought back, passing three more initiatives as their frustration shifted from excessive taxation to a distrust of government and a desire to exert more control over government spending and decision making.  The Legislative Analyst’s Office noted that “Proposition 218 shifts most of the power over taxation from locally elected governing boards to residents and property owners.”

The California Cannabis Coalition’s effort to exempt taxes proposed by initiative creates yet another loophole that would deny voters the power to approve or defeat new taxes.  Additionally, allowing private parties to bring initiatives that are not subject to voter approval can lead to collusion between local governments and private entities.  For those reasons, we are hopeful that the California Supreme Court will reaffirm the right of voters to participate in decisions involving taxes and other charges.

 

 

 

 

 

 

 

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