California Proposition 65 (2004)
Encyclopedia
Proposition 65 was a California ballot proposition
on the November 2, 2004 ballot. It failed to pass with 3,901,748 (37.6%) votes in favor and 6,471,506 (62.4%) against. It was a state constitutional amendment
that would have required voter approval for any state legislation reducing certain local government
revenues from January 2003 levels. It was officially known as the Local Taxpayers and Public Safety Protection Act.
Local governments (cities and counties) in California
primarily receive their revenue from three sources: property tax
es, local sales tax
es, and the vehicle license
fees. Proposition 65 was born out of frustration from local governments as the California state government
increasingly used local revenues to pay for state government
programs, especially during tough financial times.
Proponents of the proposition ultimately used it as a bargaining tool to negotiate an agreement with Governor Arnold Schwarzenegger
and the California State Legislature
on protecting local government revenues. The result was the compromise Proposition 1A
on the same ballot, which provided more flexible terms and deferred its restrictions until 2006. As a result, previous proponents of Proposition 65 dropped their support in favor of Proposition 1A.
This proposition conflicted with the provisions of Proposition 1A on the same ballot. The California Constitution
provides that if the provisions of two approved propositions are in conflict, only the provisions of the measure with the higher number of "yes" votes at the statewide election take effect. (Since Prop 65 did not pass, the issue was moot.)
Summary of Legislative Analyst's Estimate of Net State and Local Government Fiscal Impact:
California ballot proposition
In California, a ballot proposition is a proposed law that is submitted to the electorate for approval in a direct vote . It may take the form of a constitutional amendment or an ordinary statute. A ballot proposition may be proposed by the State Legislature or by a petition signed by members of...
on the November 2, 2004 ballot. It failed to pass with 3,901,748 (37.6%) votes in favor and 6,471,506 (62.4%) against. It was a state constitutional amendment
Constitutional amendment
A constitutional amendment is a formal change to the text of the written constitution of a nation or state.Most constitutions require that amendments cannot be enacted unless they have passed a special procedure that is more stringent than that required of ordinary legislation...
that would have required voter approval for any state legislation reducing certain local government
Local government in the United States
Local government in the United States is generally structured in accordance with the laws of the various individual states. Typically each state has at least two separate tiers: counties and municipalities. Some states have their counties divided into townships...
revenues from January 2003 levels. It was officially known as the Local Taxpayers and Public Safety Protection Act.
Local governments (cities and counties) in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
primarily receive their revenue from three sources: property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
es, local sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
es, and the vehicle license
Vehicle registration plate
A vehicle registration plate is a metal or plastic plate attached to a motor vehicle or trailer for official identification purposes. The registration identifier is a numeric or alphanumeric code that uniquely identifies the vehicle within the issuing region's database...
fees. Proposition 65 was born out of frustration from local governments as the California state government
Government of California
The government of California operates in the context of a democratic republic with three branches of government: the executive branch consisting of the Governor of California and the other elected constitutional officers; the legislative branch consisting of the California State Legislature which...
increasingly used local revenues to pay for state government
State governments of the United States
State governments in the United States are those republics formed by citizens in the jurisdiction thereof as provided by the United States Constitution; with the original 13 States forming the first Articles of Confederation, and later the aforementioned Constitution. Within the U.S...
programs, especially during tough financial times.
Proponents of the proposition ultimately used it as a bargaining tool to negotiate an agreement with Governor Arnold Schwarzenegger
Arnold Schwarzenegger
Arnold Alois Schwarzenegger is an Austrian-American former professional bodybuilder, actor, businessman, investor, and politician. Schwarzenegger served as the 38th Governor of California from 2003 until 2011....
and the California State Legislature
California State Legislature
The California State Legislature is the state legislature of the U.S. state of California. It is a bicameral body consisting of the lower house, the California State Assembly, with 80 members, and the upper house, the California State Senate, with 40 members...
on protecting local government revenues. The result was the compromise Proposition 1A
California Proposition 1A (2004)
Proposition 1A was a California ballot proposition on the November 2, 2004 ballot. The proposition successfully passed with 9,411,198 votes in favor and 1,840,002 against....
on the same ballot, which provided more flexible terms and deferred its restrictions until 2006. As a result, previous proponents of Proposition 65 dropped their support in favor of Proposition 1A.
This proposition conflicted with the provisions of Proposition 1A on the same ballot. The California Constitution
California Constitution
The document that establishes and describes the duties, powers, structure and function of the government of the U.S. state of California. The original constitution, adopted in November 1849 in advance of California attaining U.S. statehood in 1850, was superseded by the current constitution, which...
provides that if the provisions of two approved propositions are in conflict, only the provisions of the measure with the higher number of "yes" votes at the statewide election take effect. (Since Prop 65 did not pass, the issue was moot.)
Official summary
- Requires voter approval for any legislation that provides for any reduction, based on January 1, 2003 levels, of local governments' vehicle license fee revenues, sales tax powers and revenues, and proportionate share of local property tax revenues.
- Permits local government to suspend performance of state mandate if state fails to reimburse local government within 180 days of final determination of state-mandated obligation; except mandates requiring local government to provide/modify: any protection, benefit or employment status to employee/retiree, or any procedural/substantive employment right for employee or employee organization.
Summary of Legislative Analyst's Estimate of Net State and Local Government Fiscal Impact:
- Significant changes to state authority over local finances. Higher local government revenues than otherwise would have been the case, possibly in the billions of dollars annually over time. Any such local revenue impacts would result in decreased resources to the state of similar amounts.