1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act

1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act

PURPOSE OF INITIATIVE – Proposition 218 addressed the perceived problem caused by user fees, charges, and assessments (so called “disguised taxes”) charged and levied without voter approval and by limitations on the exercise of initiative power in local fiscal matters.

PRINCIPAL PROVISIONS – Proposition 218 added Article XIIIC and Article XIIID to the California Constitution, requiring majority voter approval of “general taxes” and expanding the scope of “special taxes” requiring two-thirds voter approval. The added articles also impose substantive and procedural limitations on assessments and “property related fees and charges” other than charges for electricity and gas services and fees imposed as a condition of property development. In addition, Proposition 218 extended the local agency initiative power to taxes, assessments, fees and charges.

PRINCIPAL IMPACTS – Increased documentation and procedural requirements have resulted in significant cost to local government agencies. New or increased maintenance assessments and standby service charges have been effectively precluded. Pursuit of policy goals (e.g., water conservation) beyond recovery of the cost of providing service has been more challenging. Voter approval requirements have made tax increases more difficult.