☆ Susan Shelley: California and Silicon Valley voters should be able to reverse a tax-hiking loophole (2/3)
HJTA spokesperson Susan Shelley warns that despite Prop 13’s safeguards against runaway taxes, the state has aggressively chipped away at the voter’s intent. The courts even pulled a taxpayer protection act off the ballot last year. But she’s confident that in 2026, Californians and SV residents will get a chance to put the brakes on local tax hikes. An Opp Now exclusive Q&A.
Opportunity Now:You mentioned that you’re trying to get a local taxpayer protection act on the statewide ballot. But didn’t you try something similar in 2024, and the state removed it from the ballot?
Susan Shelley: Yes. The legal challenge to the 2024 Taxpayer Protection and Government Accountability Act was based on the idea that it did so much that it was really a revision of the state constitution. The legal complaint filed by Governor Newsom and legislative leaders said the measure impaired the state government's ability to raise revenue.
But this proposition stays well within what the California Supreme Court said was allowable in an initiative. This measure is focused on one provision that was in the 2024 Taxpayer Protection and Government Accountability Act.
ON: So, this time it’s much more targeted.
SS: Exactly. It's one provision, and it's reversing the Upland loophole that came out of the 2017 California Supreme Court decision, California Cannabis Coalition v. City of Upland, which reversed 40 years of previous law. So we don't see how this could possibly be regarded as a revision of the constitution.
ON: Doesn’t your 2026 proposition also address real estate transfer taxes?
SS: Yes. It bans and repeals all real estate transfer taxes that are higher than 0.11%, the documentary transfer tax that was already allowed in the Revenue and Taxation Code at the time Proposition 13 was approved.
ON: So, Prop 13 used to block transfer taxes. But the courts and local governments found workarounds, and what you’re trying to do is restore that original ban?
SS: Yes.
ON: And the Upland loophole lets transfer taxes pass with just 50%-plus-one-vote of the voters’ approval. But these are special taxes earmarked for specific community problems, right? What’s wrong with a simple majority approval?
SS: They're always going to be made to sound wonderful when they're on the ballot, and the ballots are crowded and complicated. This is a loophole that allows proponents to write their own tax increase, direct the money to themselves, bamboozle the voters and squeak these things through with just barely a simple majority. That’s not what the constitution says.
ON: Do you think the state will find a way to also remove this proposition from the ballot?
SS: They may try, but I don't think they will find a way. We just saw Senate Bill 423, an attempt to coerce or entice Los Angeles real estate interests to back away from supporting the Save Prop 13 initiative by offering them a break from the Measure ULA transfer tax, but only on the condition that the Save Prop 13 initiative does not qualify for the ballot. SB 423 offered tax relief to fire victims in the Palisades, but again, on the condition that the Save Prop 13 initiative does not qualify. It was beyond cynical, it was depraved. We were glad to see the authors withdraw that bill.
ON: And then when the Save Prop 13 initiative gets on the ballot, do you think it will pass?
SS: There probably will be the usual scare tactics. There were all kinds of scare tactics against Prop 13 in 1978. But the voters passed it by nearly a two-thirds margin anyway, because people are overtaxed. When you're telling people that someone’s trying to raise their taxes, they hear it the first time.
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