Elections in Los Angeles are getting really expensive.
The state constitution says local taxes for a dedicated purpose, also called special taxes, must receive a two-thirds vote of the electorate in order to pass. But ever since the state Supreme Court included some ambiguous language in its 2017 California Cannabis Coalition v. City of Upland decision, lower courts have held that a simple majority is enough if the tax was placed on the ballot by a citizens’ initiative.
Who are these citizens who want to collect signatures on petitions to raise taxes?
Currently in the city of Los Angeles, they are the firefighters’ union and the union representing hospitality workers employed in hotels, restaurants, universities, convention centers and airports.
United Firefighters of Los Angeles City Local 112 has filed an initiative with the City Clerk that would raise the sales tax in the city of L.A. by another one-half percent. The revenue would be dedicated to funding the fire department.
Unite Here Local 11 has filed an initiative that would impose an additional business tax on employers with at least 1,000 employees nationwide, including parent companies and subsidiaries, if the highest-paid managerial employee (anywhere in the world) receives a total compensation package that is more than 50 times higher than the median compensation paid to the company’s employees in the city of Los Angeles. The revenue would be dedicated to “affordable and moderate-income housing projects, street/sidewalk repairs, and other specified purposes.”
Both measures recently received their title and summary, and the business tax increase measure is cleared for circulation. Each would need about 140,000 signatures to qualify for the November 2026 ballot.
If the identical measures had been proposed by the City Council and placed on the ballot, they would require the approval of two-thirds of voters in Los Angeles in order to pass. But according to a series of decisions in the California appellate courts, 50% plus one vote is enough to raise taxes if the measure gets on the ballot through a citizens’ initiative.
This is how the sales tax in L.A. County was increased by one-half percent in November 2024 to pay for more homelessness programs of the type that already have caused billions of tax dollars to vanish into thin air. Measure A was a citizens’ initiative tax increase proposed by the organizations that receive the contracts to spend the money. It passed with 57.78% of the vote, short of the 66.67% it would have required if proposed by the Board of Supervisors.
Similarly, in the same election, 55.05% of voters in the Los Angeles County Fire Protection District approved a parcel tax of $0.06 per square foot on properties served by the county fire department. Measure E was a citizens’ initiative, sponsored by the firefighters’ union, with the revenue dedicated to the needs of the fire department.
In 2022, voters in the city of Los Angeles passed an initiative tax increase on the sale or transfer of properties valued at $5 million or above to pay for anti-homelessness programs. Measure ULA was approved by 57.77% of voters. It’s the law today even though the constitution says a local tax for a special purpose requires a two-thirds vote of the electorate AND Proposition 13 prohibited real estate transfer taxes above 0.11%. A loophole for higher transfer taxes was carved by the courts in the 1990s, and now, according to the courts, the constitution doesn’t apply to a citizens’ initiative.
The pushback is coming.
Not everybody knows that the California constitution allows voters to use the initiative process to repeal any tax, fee, assessment or charge. This a power that was added by section 3 of Proposition 218 in 1996. The signature requirement for a local tax-repeal measure is 5% of the total number of votes cast for governor in the last election. In the city of Los Angeles, that’s currently 46,024 signatures.
A coalition of business groups is circulating an initiative petition to completely repeal the gross receipts tax that the city of L.A. imposes on businesses. The same initiative process could also be used to repeal the county sales tax increases for homeless programs or Metro transit construction.
If it’s war, both sides get to fight.
Write Susan@SusanShelley.com and follow her on X@Susan_Shelley