California Prop 43: Closing the Special Tax Loophole

Key Takeaways

  • Proposition 43 would require two-thirds voter approval for all local special taxes, including those placed on the ballot by citizen initiative.
  • If approved, the new requirement would take effect Jan. 1, 2027. A no vote keeps the current simple-majority standard for citizen-proposed special taxes.
  • The measure emerged from a last-minute deal between the Legislature and the Howard Jarvis Taxpayers Association, which withdrew a broader tax-limitation initiative.
  • Supporters say it closes a court-created loophole. Opponents argue it lets a minority block funding for housing, transit and other local services.

Introduction

California voters will see Proposition 43 on the November 2026 ballot, a constitutional amendment that would make it harder to pass local special taxes proposed by citizens. The measure is simple on paper, but its backstory involves backroom negotiations, a withdrawn initiative and a Democratic author who publicly opposes her own bill.

What Proposition 43 Would Do

Currently, local special taxes placed on the ballot by city councils, county boards or special districts require a two-thirds vote. Special taxes are levied for specific purposes such as affordable housing, transit, libraries, parks, emergency response and infrastructure. But because of court rulings, taxes placed on the ballot through the citizen initiative process have generally been allowed to pass with a simple majority.

Proposition 43 would eliminate that distinction by requiring a two-thirds vote for both government-placed and citizen-initiated local special taxes. The measure would amend the California Constitution and apply to elections after Jan. 1, 2027.

Supporters: Closing a Legal Loophole

The Howard Jarvis Taxpayers Association (HJTA), Reform California and several taxpayer and business groups support the measure. HJTA President Jon Coupal called it a victory for Proposition 13 protections, saying the Legislature “voted to make it harder to raise taxes” by advancing the amendment. Sen. Tony Strickland (R-Huntington Beach) said Californians deserve certainty that constitutional protections remain in place.

The Orange County Register editorial board also endorsed a yes vote, calling the measure “praiseworthy” for putting the brakes on local governments that collude with special interests to raise taxes. The board expressed disappointment, however, that the final version does not include a ban on local real estate transfer taxes, such as Los Angeles’ “mansion tax.”

Opponents: A Threat to Local Revenue

Opponents include Assemblymember Buffy Wicks (D-Oakland), who authored the measure as part of a compromise. “I'm the author of ACA 22. I'm also adamantly opposed to it,” Wicks wrote on Bluesky. She said she introduced the amendment to persuade HJTA to withdraw a broader initiative, not because she wanted it to become law.

Seamless Bay Area and public-service and transportation advocates argue the higher threshold would give a minority of voters the power to block revenue proposals supported by most residents. They say it could hinder future efforts to fund affordable housing, healthcare, fire protection and public transportation.

Political Backstory: A Last-Minute Deal

Proposition 43 originated as Assembly Constitutional Amendment 22, authored by Wicks. The Legislature approved it June 25 by a 68-2 vote in the Assembly and a 35-1 vote in the Senate. Because it is a constitutional amendment placed on the ballot by the Legislature, it did not require the governor’s signature.

The vote came after HJTA agreed to withdraw its broader Local Taxpayer Protection Act from the ballot. In exchange, legislative leaders advanced ACA 22 and withdrew a separate competing amendment, ACA 13, which would have made it harder to pass future tax-limitation initiatives.

Local California Context

The measure affects every city, county and special district in California. For example, Los Angeles’ transfer tax on high-value property sales has been criticized for suppressing housing production, and the compromise left that policy untouched. In the Bay Area, transit agencies that rely on special taxes are watching the outcome closely. The ballot language may be brief, but the impact would be felt across the state.

Background

Proposition 13, passed in 1978, established the two-thirds vote requirement for special taxes imposed by local governments. In 2017, the California Supreme Court’s ruling in California Cannabis Coalition v. City of Upland led to appellate decisions allowing citizen-initiated special taxes to pass with a simple majority. Proposition 43 would erase that distinction and restore the rule to its original design.

Conclusion

Voters will settle the debate in November. A yes vote on Proposition 43 means all local special taxes, regardless of who places them on the ballot, must meet the same two-thirds threshold. A no vote keeps the current system, where citizen-proposed special taxes can pass with a simple majority. The choice is about how hard it should be to raise taxes at the local level.

Sources and Materials


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