The Two Different Two-Thirds Requirements

In this column, Dan Walters distinguishes between the two-thirds requirements for passing a budget and increasing taxes (for purposes of increasing revenue). He says the former stands a reasonable chance of being repealed, while the latter is politically untouchable.

San Francisco Assessor Forms Committee To Take On Prop. 13

The Sacramento Bee reports here. One of their options is a "split roll," which would tax commercial and industrial property more heavily than residential property. I wrote a split roll initiative twenty years ago that just missed qualifying for the ballot. Good luck.

The Future Of Proposition 13

Dan Walters of the Sacramento Bee weighs in here on the future of Proposition 13--including an important change that would not require a constitutional amendment.

HJTA Files Reply In Support Of Petition In Budget Case

The Howard Jarvis Taxpayers Association has filed its reply (here) in support of the Petition for Review it filed in the Prop. 13 budget case. To recapitulate, the underlying issue is whether the Legislature violated the two-thirds vote requirement for new taxes imposed by Prop. 13 when it passed a budget in December by a majority vote. That budget never became effective because it was vetoed by the Governor. (Full disclosure: I represent the Legislature in this case.) The Court of Appeal's ruling in the case is referenced here.

Legislature Files Answer In Budget Case

The Legislature has filed its Answer to Petition for Review in the Proposition 13 case brought by the Howard Jarvis Taxpayers Association. A copy is available here. The HJTA has ten days from last Monday to file a reply. The answer was prepared by yours truly and the Office of the Legislative Counsel.

HJTA Files Petition for Review in State Budget Case

The Howard Jarvis Taxpayers Association has filed a petition for review in the lawsuit challenging the Legislature's approval by majority vote of n0w-vetoed budget legislation. The text of the Court of Appeal's denial of HJTA's petition for writ of mandate is here. The petition for review is here.

Court of Appeal Denies HJTA Petition

The Court of Appeal has denied the petition for writ of mandate filed by the Howard Jarvis Taxpayers Association and the Republican Members of the Legislature. As discussed in a previous post (here), the idea that the Legislature would adjudicate the constitutionality of vetoed legislation was, to put it politely, novel. Here's the Court's order: "BY THE COURT: Petitioners, Howard Jarvis Taxpayers Association et al., ask this court to issue a peremptory writ of mandate directing, among other things, "Respondents [Legislature of the State of California et al.] to set aside the Legislative action on AB 2 and SB 11 until such time as those measures receive a two-thirds vote of both houses of the Legislature, and [c]ommanding [the] Legislature to refrain from deeming as 'passed' . . . any other measures in the future that increase state taxes unless such measure has been approved by the requisite two-thirds vote in each house of the Legislature." We decline petitioners' invitation to intercede in the ongoing legislative process. Such judicial action is barred by the separation of powers doctrine enunciated in article III, section 3, of the California Constitution ["The powers of state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution"].) Hence, "the courts may not order the Legislature or its members to enact or not to enact, or the Governor to sign or not to sign, specific legislation . . . ." (Serrano v. Priest (1976) 18 Cal.3d 728, 751 [footnotes omitted]; see also, Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 445.) Absent the Legislature's passage and the Governor's signing of such legislation, adjudications of its constitutionality and the other matters raised by the petition are not yet ripe for judicial review. The petition for writ of mandate is denied.

ps. Here is today's Sacramento Bee story on the decision.

Howard Jarvis Association Tilts At Windmills

Yesterday the Howard Jarvis Taxpayers Association, vowing never to be second in the race to the courthouse, filed a lawsuit challenging the constitutionality of the budget proposal passed by the Legislature last month. But the legislation was never enacted into law because the Governor (as promised) vetoed it. How does the HJTA (and the Insurance Commissioner, one of the other plaintiffs) think they have standing to challenge legislation before it's enacted? Do they really think that the Third Appellate District will give the Legislature an advisory opinion about whether never-enacted legislation is constitutional? Here is the relevant article from the San Francisco Chronicle; here is the latest from the Los Angeles Times; and here and here are articles from the Sacramento Bee. Finally, here is a link to the pleading filed by HJTA. (Thanks, Tim Bittle, for pointing me to its web site.)

A quick skim of the lawsuit indicates that its plaintiffs include Republican members of the Senate and the Assembly who claim that their voting rights are being diluted because of the majority's alleged violation of Proposition 13's two-thirds vote requirement. To my mind, at least, that makes this case look more like an internal affair of the Legislature, and hence non-justiciable in its present form (until legislation is actually enacted). We'll see if the courts agree. Here is a link to the Court of Appeal's docket for the case.

Differing Views On Legislature's Tax Plan

The Sacramento Bee has canvassed law professors and received differing opinions as to the legality of adopting the Democratic plan for solving the budget crisis without a two-thirds vote. Interestingly, they didn't talk to any practitioners, other than Jon Coupal of the Howard Jarvis Taxpayers Association, who wants to be first in line at the courthouse. The article is here. Jesse Choper, in true law professor fashion, answered the reporter's question with his own (rhetorical) question ("What is a tax?"), and then said the answer, like most answers in the law, was complicated.

Governor Will Veto Democratic Budget Proposal

According to the San Francisco Chronicle (here), Governor Schwarzenegger has said he will veto the Democratic tax proposal passed by the Legislature with a majority vote. Whatever the political or economical wisdom of the veto may be, it will spare the State litigation over whether the budget proposal required a two-thirds vote under the portion of Proposition 13 that requires a super-majority for certain tax increases. Here is the analogous story from the Los Angeles Times.

Can The Democrats Increase State Revenues Without A Two-Thrds Vote?

The Los Angeles Times reports here on a proposal by legislative Democrats to fill state coffers by labeling revenue increases "fees" rather than "taxes," thus avoiding the need for the two-thirds vote required by Proposition 13. We'll provide more details as soon as we get them. And here is the relevant article from the San Francisco Chronicle and here is the corresponding article from the Sacramento Bee. This could get interesting.

Proposition 13 and the Budget Crisis

Daniel Weintraub of the Sacramento Bee has an interesting article, available here, on the impact of property tax reassessments on local finance. If you bought at the height of the housing bubble and the value of your house is now less than what you paid, you can get your property reassessed for property tax purposes. Similarly, foreclosure on a house will usually result in a sale price that is below the last purchase price, thus triggering reassessment at a lower value. All this translates into less money for local governments. And since the state is already in a giant financial hole itself, it won't come to the aid of cash-strapped local governments. It's hard to be a government that doesn't have a printing press.