Update on Statewide November 2024 Ballot Measures

November 11, 2024

Californians once again showed a healthy appetite for using bond funding to address some of the state’s most pressing challenges, including school funding and climate change, in passing Propositions 2 and 4 on the November 2024 ballot. However, voters rejected Prop 5, which would have lowered the threshold for passing certain local bond measures. They also said no to increasing the minimum wage (Prop 32) and to allowing cities to establish rent control (Prop 33). Last, they supported Prop 36, which allows courts to increase sentencing for specific drug and property crimes.

Original Article, January 2024:

This November, Californians will take to the polls to shape the future of their national and state governments. In addition to voting for President and other public offices, Californians will vote on several statewide ballot measures that may change the financial and regulatory landscape for public agencies within the state. Here is a look at some of the key ballot measures up for a vote this fall that might affect public agencies.

Prop 2

Proposition 2 would authorize the State to borrow $10 billion to build new schools and educational facilities, distributing much of these funds to counties and school districts. It would also make it easier for school districts to qualify for financial hardship assistance by raising the bonding capacity limit for qualifying districts from $5,000,000 to $15,000,000. This ceiling will also be inflation-adjusted moving forward.

Prop 4

Similar to Prop 2, Proposition 4 would authorize the State to borrow $10 billion to pay for climate change adaptation and other environmental projects. The measure is known as the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024. It authorizes $3.8 billion for clean water, $1.5 billion for wildfire and forest resilience projects, $1.2 billion for coastal resilience, $1.2 billion for biodiversity preservation, $450 million for extreme heat mitigation, $300 million for sustainable and resilient agriculture, $700 million for parks and outdoor recreation, and $850 million for clean air. The measure earmarks much of these funds for public agency use and contemplates that agencies will administer project grants to nonprofits, public institutions and other applicants.  Prop 4 is backed by the League of California Cities.

Prop 5

Proposition 5 originated as Assembly Constitutional Amendment 1 (ACA 1) in the State Assembly. ACA 1, a measure backed by the League of California Cities, would originally have lowered the voter approval threshold for local governments to adopt special taxes and bonds from two-thirds to 55%. After polling indicated that the measure was unlikely to pass as initially drafted, the Legislature adopted ACA 10, amending ACA 1 to eliminate the 55% approval threshold for special taxes. As amended, ACA 1 still establishes a lower 55% voter approval threshold for city, county, and special district to approve bond measures. If adopted, the 55% voter approval threshold would apply to any local bond measures on the same November 2024 ballot or any subsequent ballot.  This proposition would essentially put cities, counties, and special districts on the same footing as school districts with respect to the voter approval requirement for bonds.

Prop 32

Proposition 32, or the California Living Wage Act, would increase the state minimum wage from $16 to $18 per hour by 2026. The new minimum wage would apply to all employers, including public agencies, and would be annually adjusted based on cost of living starting in 2027.

Prop 33

Proposition 33 would empower cities and counties to pass new rent control legislation. The initiative would abolish the Costa-Hawkins Rental Housing Act. Under Costa-Hawkins, local governments are prevented from enacting rent control on single family homes and housing built after 1995, and are unable to limit what landlords can charge new tenants. By eliminating Costa-Hawkins, Prop 33 would remove key obstacles to rent control legislation in California. Cities should take note that if Prop 33 passes, it will open the door to new local rent control measures for cities and counties wishing to adopt them. Opponents of the measure, however, have noted concerns that new rent control measures will discourage new housing developments and worsen the state housing crisis.

Prop 36

Proposition 36 would partially roll back a previous ballot initiative limiting penalties for drug and theft crimes. Prop 47, approved by voters in 2014, reduced the number of crimes that can be punished as felonies and reduced the number of people that could be sentenced to state prison. Prop 36 would allow harsher penalties for certain drug and theft crimes and allow treatment-mandated felonies to be charged for drug crimes. This measure is endorsed by the League of California Cities and opposed by the Governor due to its fiscal implications.

Two other notable initiatives did not make the final cut after either being struck from the ballot or postponed to the next election. If approved in the future, these two initiatives could have large fiscal impacts on public agencies and local governments.

ACA 13

ACA 13 would amend the state Constitution to limit the ability of future statewide measures to impose supermajority voter approval requirements on state and local taxes. Specifically, ACA 13 would provide that any statewide initiative proposing to increase the voter approval requirement would be approved and take effect only if the proportion of votes cast in favor of the initiative measure is equal to or greater than the highest voter approval requirement that the initiative measure would impose So, for instance, if a future proposed statewide initiative measure would impose a 60% voter approval threshold for new local taxes, that measure would have to pass with at least 60% voter approval in order to take effect. Originally slated for the November 2024 ballot, ACA 13 is now scheduled for a vote at the 2026 election.

Taxpayer Protection and Government Accountability Act

The Taxpayer Protection and Government Accountability Act (the “TPA”) would have amended the state Constitution to require a two-thirds voter approval of all new local taxes and fees, and to require two-thirds legislative approval and a majority voter approval for all new State taxes. It would have also applied retroactively to taxes and fees passed after 2022. While the TPA qualified for placement on the November 2024 ballot, the California Supreme Court ordered the Secretary of State not to place the measure on the ballot in response to a lawsuit filed directly in that Court by the Legislature and the Governor.  In Legislature of the State of California  v. Weber, the Court found that because the TPA amounted to a “revision” of the state Constitution, it must be accomplished through the structured legislative revision process, not via ballot initiative. This was a huge win for local governments, because the TPA would have effectively rolled back many of the court and legislative victories by local governments regarding the scope of Prop. 13 and its progeny over the past 50 years.

ACA 13, discussed above, was originally placed on the November 2024 ballot partly in response to the TPA and would have required the TPA to be approved by two-thirds of the voters in order to take effect. After the Supreme Court issued its decision in Legislature v. Weber, the Legislature removed ACA 13 from the 2024 ballot and instead directed that ACA 13 be placed on the November 2026 ballot.

It’s an exciting time for public agencies and municipalities across the State with so many important initiatives at stake this fall. If you have questions about the information shared in this article, contact Perl Perlmutter at perlmutter@smwlaw.com or 415-552-7272.

This article was prepared by SMW law clerk Adelaide Duckett.