A state appeals panel has ruled California's state government can move ahead with a ballot initiative this fall which could make it significantly easier for local governments to borrow money and raise taxes, even though challengers and a lower court judge agreed the ballot measure's description put forward by lawmakers and the Attorney General would deceive voters.
On Aug. 13, a three-justice panel of the California Third District Appellate Court in Sacramento overturned the decision of Sacramento County Superior Court Judge Shelleyanne W.L. Chang, potentially clearing the way for Democrats to place the measure known as Proposition 5 on the fall ballot.
The dispute had landed before the court after California Attorney General Rob Bonta appealed Chang's ruling requiring changes to the ballot language for Prop 5.
Jon Coupal, president of the Howard Jarvis Taxpayers Association
Should Prop 5 be approved by voters this fall, the California state constitution would be rewritten to allow local governments to issue bonds for "local infrastructure and housing for low- and middle-income Californians" after securing permission from only 55% of voters. Currently, the constitution would require such bonds to be approved by at least two-thirds of voters.
The new vote threshold would apply to bonds issued by nearly all local taxpayer-funded bodies, including cities, transit districts and government associations. Infrastructure bonds could be used to pay for improvements to roads, transit, parks, ports and more. Housing bonds could be used to give certain homebuyers down payment assistance or to promote so-called affordable housing or homelessness assistance programs.
All bonds issued by local governments would be debt issued by the local government, and would result in higher property taxes to repay it.
After state lawmakers voted to place Prop 5 on the ballot, opponents, including the Howard Jarvis Taxpayers Association, filed suit in Sacramento County court to try to force Bonta to rewrite what they said was misleading language about Prop 5 on the ballot which could disguise the measure's true intent and affects on tax bills.
The lawsuit centered on the so-called "ballot label" which briefly describes the measure for voters. In the label, which was written by Bonta's office, the state said Prop 5 "allows approval of local infrastructure and housing bonds ... with 55% vote."
The Howard Jarvis organization asserted this is misleading and deceptive, because it doesn't make clear that the change would make it much easier for local governments to issue bonds and raise taxes to pay for new programs and projects to be funded by the new debt.
Opponents assert the ballot label should tell voters that the current standard to issue bonds and raise property taxes is a two-thirds approval.
Judge Chang agreed, issuing an order directing Bonta to revise the ballot language and include the additional language clarifying what Prop 5 will change.
However, the appellate justices said Chang was wrong.
The appellate decision was authored by Justice Ronald B. Robie. Justices Elena J. Duarte and Jonathan K. Renner concurred.
In the ruling, the appellate justices said they believe the label is "factually accurate." And they said other language on the ballot, including the "ballot summary" and language from a legislative analyst both state the measure would allow for a lower threshold for increased borrowing and property taxes.
The Howard Jarvis objectors asserted the label, however, would still mislead voters, because it doesn't make immediately clear the purpose and effects of Prop 5. The objectors said relying on the other language would require voters to piece together the full picture from a "trail of breadcrumbs."
But appellate justices said they believed the ballot language accurately enough describes "what Proposition 5 would itself effectuate ... in concise language that is easy to understand."
"While the ballot label is undoubtedly prominent in the voter information materials, the fact the title and summary here contain the information that real parties want included in the label substantially diminishes the force of their argument that there is a danger voters will be misled," Robie said. "(The objectors) presented no evidence establishing voters will be misled by the ballot materials at issue or that these materials are inconsistent with the Elections Code, much less evidence necessary to support a clear and convincing evidence finding by the trial court."
Following the decision, Howard Jarvis president Jon Coupal described the ruling as a "horrible anti-transparency decision."
"We may have lost the battle on this, but we will defeat Prop 5 anyway despite the assault by A.G. Bonta on ballot transparency," Coupal said in a message posted on X.com, formerly known as Twitter.
Objectors Jon Coupal and the Howard Jarvis Taxpayers Association were represented by attorneys Thomas W. Hiltachk and Paul Gough, of the firm of Bell McAndrews & Hiltachk, of Sacramento.
The state was represented by Bonta and other attorneys from the Attorney General's office.