Justices Reject Transit Tax Challenge; Measure M Awaits

The state Supreme Court on Thursday rejected a challenge to a half-cent sales tax surcharge approved by Los Angeles County voters in 1990, giving a green light to a far-ranging, $400-million-a-year transportation program.

In a brief order, the justices let stand an appeal court decision that upheld Proposition C, a measure providing for construction of Metro subway lines, new car-pool lanes on freeways, expanded bus service and other projects.

The Supreme Court has not yet decided whether to review a similar challenge to Orange County’s Measure M, a half-cent sales tax for traffic improvements approved in November, 1990. A decision is expected within the next few weeks.

Los Angeles transit officials, who were counting on the additional surcharge revenue to bail them out of recession-related budget shortfalls, were jubilant.

“This allows the will of the people to be done,” said Neil Peterson, executive director of the Los Angeles County Transportation Commission. “It will help cushion some of the negative effect we’re feeling because of the economy.”

Both the LACTC and the Southern California Rapid Transit District have been relying on a previous, 1980 half-cent surcharge for substantial parts of their construction and operating budgets. That surcharge has generated less money than expected during the recession, and Proposition C was meant to supplement that revenue.

Marvin Holen, president of the RTD board of directors, said he hoped Proposition C revenue now can be used to erase about one-third of the $60-million shortfall in the current budget and cover a whopping $130-million shortage for next fiscal year. “With Proposition C, we have an opportunity to repair that (shortfall) and maintain the current level of service,” Holen said.

Thursday’s action marked the first time that high court review had been sought of a local sales tax after a decision by the justices last December striking down a San Diego county tax to build courts and jails.

In that case, the justices found that the San Diego measure was subject to the two-thirds voter-approval requirement under Proposition 13, the 1978 property tax limitation initiative. The two-thirds majority was necessary because the agency collecting the tax was created after 1978 to raise revenue lost through Proposition 13, the high court said.

The December ruling appeared to cast a legal cloud over similar taxes enacted around the state, and some authorities thought the Los Angeles case might result in further guidance from the high court. But on Thursday the justices left the legal status of those other taxes unclear by declining to review the Los Angeles case--and, while leaving intact the appellate ruling approving the tax, saying that ruling could not be used as a legal precedent in future cases.

Proposition C was challenged in a suit brought by John Vernon and other members of the Libertarian Party of California. They contended that the measure--approved by a bare 50.4% majority--should be struck down because it lacked a two-thirds approval required under Proposition 13 and Proposition 62, a 1986 initiative aimed at closing court-created loopholes in Proposition 13.

But a state Court of Appeal in March held 3 to 0 that the LACTC--the agency receiving funds under the measure--was not subject to the two-thirds requirement because the commission lacked power to levy property taxes and was not formed to circumvent Proposition 13.

The measure’s opponents appealed the ruling to the state Supreme Court but only Justice Ronald M. George voted to review the issue, three votes short of the number required by the seven-member court.

Mark S. Rosen of Santa Ana, a lawyer for the foes of the measure, noted that the way is still clear for further challenges to other taxes similar to Proposition C. Rosen is also representing the plaintiffs in the case against Orange County’s Measure M sales tax.

Proposition C is a vital part of the county’s ambitious, 30-year transportation-improvement plan.

The first half-cent surcharge, passed in 1980 as Proposition A, was instrumental in allowing the county to build the Metro Blue Line and start the Red Line subway, the key element in a rapid transit network that is to expand to more than 300 miles.

Hager reported from San Francisco and Stein from Los Angeles.