Countywide : League Tries to Let Cities Keep Taxes

The League of California Cities is pushing for state legislation that would allow government agencies to keep utility, hotel and other taxes approved before a state Supreme Court ruling in September threw the validity of such levies into question.

The Supreme Court on Dec. 14 denied a request by the league and other groups to clarify its September ruling, which upheld the constitutionality of Proposition 62.

The voter-approved ballot measure requires that all taxes for general purposes be approved by a majority of voters and that all taxes for special purposes be passed by a two-thirds majority.

The decision struck down earlier lower court rulings that had declared Proposition 62 unconstitutional.

Based on the lower court decisions, many Orange County city councils imposed various taxes without voter approval.

But the Supreme Court ruling did not make clear whether Proposition 62 should be applied retroactively to invalidate city council-approved taxes.

Many city officials have said that the loss of tax revenue would force them to make sharp cutbacks in services.

“Retroactivity would have a devastating effect on public agencies across the state, not just cities,” said Janet M. Huston, executive director of the league’s Orange County division.

The league is now seeking legislation that would enable cities to continue to collect taxes approved before the Supreme Court decision.

“We’ve had a good response from legislators on this,” Huston said.