The Tax War’s Newest Battle

A High-Stakes Clash Over Local Funding, Voter Thresholds, and Fiscal Autonomy

Initiative 25-0006, titled the “Local Taxpayer Protection Act to Save Proposition 13,” would have significantly constrained the ability of cities, counties, and special districts to raise local revenue. The measure sought to:

• Amend the California Constitution to increase the vote requirement to pass citizen-initiated local special taxes from a simple majority (50%+1) to a two-thirds (66.67%) vote.
• Prohibit charter cities from imposing their own real estate transfer taxes, whether for general or specific purposes, above the existing statutory rate of $0.275 per $500 of value.
• Invalidate any property-related special taxes previously adopted with an approval rate below two-thirds or real estate transfer taxes in charter cities.

Following negotiation and legislative compromise, proponents withdrew the initiative and the state withdrew their response, Assembly Constitutional Amendment 13 (ACA13), which was designed to protect local governance and revenue.

Instead, the state legislature has voted to put forward Proposition 43 on the November ballot. This measure would amend the California Constitution to require that local ballot measures that propose, extend or increase special taxes initiated by citizens receive a two-thirds (66.67%) vote.

The win for local government was in eliminating the retroactivity provisions and preserving the ability of charter cities to impose their own real estate transfer taxes.

Let the campaigning begin!