Rider v. County of San Diego

GEORGE, J., Concurring.

I concur in the majority’s conclusion that the sales tax at issue in this case is a “special tax” that may validly be imposed only if approved by a two-thirds vote of the local electorate. Although I have signed the majority opinion, I write separately to explain why, in my view, the court’s decision in this case should be premised on the statutory provisions of Proposition 62, rather than on the constitutional provisions of Proposition 13. As I explain, basing our decision on nonconstitutional grounds not only would be more consistent with well-established principles of judicial restraint, but would avoid the necessity of placing a new “gloss” on the meaning of the term “special district” as interpreted in prior decisions of this court construing Proposition 13, a gloss that appears likely to engender considerable confusion and litigation and that will cause difficulty in applying the majority’s holding in future cases.

I

In this case, plaintiff taxpayers contend that the sales tax in question is invalid because it was not approved by a two-thirds vote of the local *17electorate. Plaintiffs maintain that a two-thirds vote is required under both Government Code section 53722, a provision of Proposition 62, and article XIII A, section 4 of the California Constitution (hereafter article XIII A, section 4), a provision of Proposition 13. The majority opinion turns immediately to an analysis of the proper interpretation of article XIII A, section 4, without considering whether the tax is invalid under the applicable provision of the Government Code.

In my view, the majority’s approach is inconsistent with well-established principles of judicial restraint. In his celebrated concurring opinion in Ashwander v. Valley Authority (1936) 297 U.S. 288, 347 [80 L.Ed. 688, 711, 56 S.Ct. 466], Justice Brandeis, in reviewing a number of settled precepts of judicial practice, observed that “[t]he Court will not pass upon a constitutional question although properly presented by the record, if there is also present some other ground upon which the case may be disposed of. . . . Thus, if a case can be decided on either of two grounds, one involving a constitutional question, the other a question of statutory construction or general law, the Court will decide only the latter. [Citations.]” California courts have long subscribed to this principle. (See, e.g., Palermo v. Stockton Theatres, Inc. (1948) 32 Cal.2d 53, 66 [195 P.2d 1] [“ ‘It is a well-established principle that this Court will not decide constitutional questions where other grounds are available and dispositive of the issues of the case.’ ”]; People v. Barton (1963) 216 Cal.App.2d 542, 546 [31 Cal.Rptr. 7].) I believe we should adhere to this settled maxim and evaluate the validity of the challenged tax under the statutory provisions of Proposition 62, reaching the question of the tax’s constitutionality under the provisions of Proposition 13 only if it is necessary for us to do so.

II

Proposition 62, an initiative measure drafted in response to a number of judicial decisions construing the earlier adopted Proposition 13 (see, e.g., City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47 [184 Cal.Rptr. 713, 648 P.2d 935] (hereafter Farrell); Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197 [182 Cal.Rptr. 324, 643 P.2d 941] (hereafter Richmond)), was enacted into law by the voters at the November 1986 General Election. This initiative added a new article to the Government Code, comprised of a number of related statutory provisions governing the imposition of both general and special taxes by local governmental entities. (See Gov. Code, §§ 53720-53730.) The legislation that created the local agency at issue here, and that authorized the agency to impose the challenged tax, was adopted less than a year after the voters’ enactment of Proposition 62. (Stats. 1987, ch. 1258, §§ 1-4, pp. 4471-4477.)

*18Plaintiffs contend that the tax at issue is invalid under one of the principal provisions of Proposition 62, Government Code section 53722.1 That section provides in full: “No local government or district may impose any special tax unless and until such special tax is submitted to the electorate of the local government, or district and approved by a two-thirds vote of the voters voting in an election on the issue.”

For the reasons discussed below, I believe that plaintiffs’ contention is well founded. Indeed, in my view, the provisions of Proposition 62 provide a much clearer and more straightforward basis for the decision in this case than the provisions of Proposition 13, on which the majority opinion relies.

To begin with, it is clear beyond dispute that section 53722 applies to the local agency that imposed the tax in this case—the San Diego County Regional Justice Facility Financing Agency (hereafter the Agency). Unlike the comparable provision of Proposition 13 (art. XIII A, § 4), which by its terms applies only to cities, counties and “special districts,” a phrase that has been given a narrow interpretation by prior decisions of this court (see, e.g., Richmond, supra, 31 Cal.3d 197, 201-208; Huntington Park Redevelopment Agency v. Martin (1985) 38 Cal.3d 100, 106 [211 Cal.Rptr. 133, 695 P.2d 220]), section 53722 applies to all “local government[s]” or “district[s].” Section 53720, the initial provision of Proposition 62, defines these terms broadly: “As used in this Article: [SI] (a) ‘local government’ means any county, city, city and county, including a chartered city or county, or any public or municipal corporation; and [f] (b) ‘district’ means an agency of the state, formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries.” (Italics added.)

Because of the breadth and clarity of the applicable statutory language, there is no question but that the Agency is a “district” subject to the provisions of section 53722. In contrast to the determination whether the Agency is to be considered a “special district” within the meaning of Proposition 13 under the interpretation set forth in the majority opinion (see maj. opn., ante, pp. 10-13), there is no need to inquire into the purpose for which the Agency was established or to determine whether the Agency is “essentially controlled” by another local governmental agency, in order to determine whether the Agency is subject to the limitations of section 53722. Thus, reliance on section 53722 in this case and in future cases would avoid entangling courts in the difficult inquiries that inevitably will follow from the majority opinion’s holding with regard to the meaning of the term “special district” in Proposition 13.

*19Furthermore, under the terms of Proposition 62, I believe it is equally clear that the tax at issue here is a “special tax” within the meaning of section 53722. Unlike Proposition 13, which contains no explicit definition of the term “special tax” as used in that measure (see Farrell, supra, 32 Cal.3d 47, 53-57), Proposition 62 does contain a specific provision directed to this point. Section 53721 provides: “All taxes are either special taxes or general taxes. General taxes are taxes imposed for general governmental purposes. Special taxes are taxes imposed for specific purposes.”

Under this controlling statutory definition, I conclude that the sales tax challenged in this case is a special tax. As the majority opinion explains, the tax was imposed for the specific purpose of financing the construction of justice facilities in the county, and the proceeds from the tax are earmarked for this specific purpose. Although the legislation creating the Agency purported to designate the tax as a “general tax” (see § 26251) which would require only a majority, rather than a two-thirds, approval of the local electorate under Proposition 62 (see § 53723), in light of the very narrow scope of the Agency’s authority—limited to only one specific governmental activity, the construction of justice facilities—this tax cannot, in my view, properly be said to have been imposed for “general governmental purposes” within the meaning of section 53721, notwithstanding the deference that usually is accorded the Legislature’s interpretation of governing provisions.2 The tax in question plainly is of the kind, “imposed for [a] specific purpose[]” (§ 53721), that Proposition 62 contemplated would be treated as a special tax.

Accordingly, because the Agency that imposed the tax clearly is subject to the provisions of section 53722, and because equally clearly the tax in question is a special tax within the meaning of this section, I conclude that under section 53722 the tax was not validly enacted since it was not approved by the requisite two-thirds vote of the local electorate.

*20III

Defendant contends, however, that even if the tax at issue is inconsistent with the requirements of section 53722, the inconsistency is of no moment because this statute is itself unconstitutional. Defendant argues that insofar as section 53722 requires a local government to obtain prior approval of the local electorate before imposing a special tax, the statute improperly authorizes a local tax referendum and thereby assertedly violates the provisions of article II, sections 9, subdivision (a) and 11 of the California Constitution (hereafter article II, sections 9(a) and ll).3 Although the Court of Appeal in this case agreed with defendant’s contention, in my view the Court of Appeal’s conclusion rests on a misinterpretation of this court’s decision in Geiger v. Board of Supervisors (1957) 48 Cal.2d 832 [313 P.2d 545] (hereafter Geiger).

In Geiger, supra, 48 Cal.2d 832, our court was faced with the question whether a county board of supervisors had acted lawfully in refusing to hold a referendum election on a local tax ordinance when a properly certified petition demanding such a referendum had been timely filed with the county prior to the effective date of the ordinance. In defense of its action, the county maintained that the constitutional referendum authority with respect to local legislation did not extend to local tax measures. Relying on the circumstance that the then-applicable constitutional provision—former article IV, section 1 of the California Constitution—specifically excepted “acts calling elections, acts providing for tax levies or appropriations for the usual current expenses of the State, and urgency measures” (italics added) from the reach of the referendum power applicable to state legislation, the county argued that a similar limitation was implicit in the constitutionally reserved referendum power applicable to local legislation.4

*21The Geiger court agreed with the county’s contention, concluding that “the same exception [applicable to state referenda] applies to the referendum powers reserved to the county electors, and, therefore, the Constitution, standing alone, does not secure to county electors the right of referendum over tax levies or appropriations for the usual current expenses of county government.” (Geiger, supra, 48 Cal.2d 832, 836.)

The plaintiffs in Geiger contended, however, that even if the constitutionally reserved referendum power did not, of its own force, extend to local tax measures, the Legislature, by several statutory enactments, had granted the local electorate the right to invoke the referendum with regard to tax measures. The Geiger court rejected the contention, finding no indication that the Legislature had intended to subject either local taxes in general, or the specific tax at issue in that case, to the referendum power. (Geiger, supra, 48 Cal.2d at pp. 837-839.)

Although this conclusion completely disposed of the plaintiffs’ contention, the Geiger court, in dictum, went on to address the question whether the Legislature had the constitutional authority to expand the referendum power beyond the scope of the power reserved by the Constitution. The Geiger court indicated that in its view the Legislature did not have such power, stating: “The listing of exceptions in the Constitution amounts to a declaration of policy against subjecting legislation concerning the excepted matters to a vote of the people. While section 1 of article IV does not expressly prohibit the Legislature from extending the right of referendum to include a county sales tax ordinance, any holding that such measures are subject to referendum would be contrary to this policy and against the clear implication of the constitutional provision.” (Geiger, supra, 48 Cal.2d at pp. 836-837.)

The Court of Appeal in the present case, relying on this broad language in Geiger, concluded that section 53722 is unconstitutional under article II, sections 9(a) and 11—the successor provisions to the constitutional provision at issue in Geiger—insofar as the statute requires a local government or district to obtain the approval of its electorate before imposing a tax. The Court of Appeal was of the opinion that under Geiger any statute that requires voter approval of a local tax is unconstitutional.

For a number of reasons, I disagree with the Court of Appeal’s conclusion. First, as already noted, the broad language in Geiger on which the Court of *22Appeal relied was clearly dictum, because in Geiger there was no statutory provision that purported to authorize the use of the referendum against a tax ordinance. The holding of Geiger was simply that the referendum power reserved to the people by the state Constitution with respect to local legislation, like the referendum power reserved by the Constitution with respect to state legislation, does not extend to tax measures. In view of the well-established principles concerning the breadth of the legislative power retained by the Legislature (see, e.g., Collins v. Riley (1944) 24 Cal.2d 912, 915-916 [152 P.2d 169]; Fitts v. Superior Court (1936) 6 Cal.2d 230, 234 [57 P.2d 510]), and the absence of any specific constitutional provision purporting to restrict the Legislature’s authority to extend by statute the people’s referendum power, I believe the broad dictum in Geiger is questionable.

Second, even assuming the dictum in Geiger were correct and should be followed, in my view that language would not apply to a statutory provision like section 53722. Unlike the hypothetical statute to which the Geiger dictum was addressed, section 53722 does not purport to subject local tax measures to the general referendum process, but rather imposes, as part of enabling legislation granting taxing authority to the local governmental entity, a voter-approval precondition that qualifies the local entity’s fundamental authority to impose the tax. In contrast to a referendum, which is initiated by a petition signed by a relatively small percentage of the electorate and operates to suspend the effectiveness of a duly enacted legislative act that would otherwise go into effect of its own accord (see, e.g., Whitmore v. Carr (1934) 2 Cal.App.2d 590, 592 [38 P.2d 802]), the voter-approval provision of section 53722 is a legislatively mandated requirement that applies in every instance without initiation by the voters and is an essential prerequisite to the valid enactment of any tax measure to which the section applies.5 The inclusion of such a condition precedent in enabling legislation is quite distinct from a referendum and, as explained hereafter, does not pose the same hazards of uncertainty for local fiscal affairs that the Geiger court found implicit in the exercise of the referendum power with regard to tax measures.

*23The Geiger court, in concluding that the explicit limitations on the statewide referendum power also applied to the local referendum power, explained the purpose underlying the relevant constitutional provision as follows: “One of the reasons, if not the chief reason, why the Constitution excepts from the referendum power acts of the Legislature providing for tax levies or appropriations for the usual current expenses of the state is to prevent disruption of its operations by interference with the administration of its fiscal powers and policies. The same reasoning applies to similar acts of a county board of supervisors .... Before the board can properly prepare a budget, it must be able to ascertain with reasonable accuracy the amount of income which may be expected from all sources, and, when it has adopted ordinances imposing taxes, it cannot make an accurate estimate unless it knows whether the ordinance will become effective.” (Geiger, supra, 48 Cal.2d 832, 839-840.)

As this passage indicates, the Geiger court reasoned that while the constitutional referendum provision generally affords the electorate the authority to call for a referendum on any legislative act, the Constitution withholds the referendum power with regard to tax measures in recognition of the fact that when a legislative body establishes tax levels in connection with the budget process, the governmental entity must be able to rely on the receipt of those tax revenues and cannot have the viability of such measures continually placed in doubt by the possibility that a referendum may be initiated by a relatively small percentage of the electorate. (See also Hunt v. Mayor & Council of Riverside (1948) 31 Cal.2d 619, 629-630 [191 P.2d 426]; Carlson v. Cory (1983) 139 Cal.App.3d 724, 730 [189 Cal.Rptr. 185].) This reason for limiting the referendum power, however, does not apply to a voter-approval requirement that, under the governing statutes, constitutes an essential precondition to a local entity’s authority to impose a particular tax. Because such a prior-voter-approval requirement always will be known in advance, the local legislative body will be aware that it lacks the power to levy the tax until voter approval has been obtained, and thus the local entity will not include the anticipated tax revenue in its enacted budget until after the electorate has approved the tax. Once such approval has been obtained, annual budget measures imposing the tax would be exempt from the referendum process, just like any other tax measure. (See Elec. Code, § 3751, subd. (a)(3); Gov. Code, § 25123, subd. (c) [tax ordinances take effect immediately].)6

To my knowledge, in the many years that have passed since the Geiger decision (supra, 48 Cal.2d 832), the limitations on the referendum power *24embodied in article II, sections 9(a) and 11, have not generally been understood to preclude the Legislature, in enacting enabling legislation in the tax field, from conditioning a local entity’s taxing authority on prior voter approval of the tax. For example, in our decision in Richmond, supra, 31 Cal.3d 197, we noted in passing that the 1976 legislation that created the Los Angeles County Transportation Commission had conditioned the commission’s authority to impose a tax on prior voter approval of the tax measure. (Id. at p. 199 [citing Pub. Util. Code, § 130354].) Indeed, in the very legislation that created the local agency involved in the case before us and granted that agency the authority to impose a one-half cent sales tax, the Legislature specifically conditioned the Agency’s imposition of such a tax on the prior approval of a majority of the local electorate. (See § 26271.) Because the Legislature was willing to grant the Agency the authority to impose a tax only in the event the tax was supported by a majority of voters in a local election, if article II, sections 9(a) and 11, were interpreted to render unconstitutional any statutory provision imposing a voter-approval requirement with regard to a local tax, as defendant suggests, the Agency might well lose its statutory authority to impose any tax, even one approved by a two-thirds vote of the electorate. The other, numerous local governmental entities whose authority to impose a tax are similarly dependent upon voter approval might well suffer a similar fate. In view of the number of instances in which the Legislature has chosen to condition a grant of taxing authority to a local entity on the approval of the local electorate, the claim that the Geiger decision, supra, 48 Cal.2d 832, should be interpreted to preclude such legislation is untenable.

Accordingly, I conclude that section 53722, requiring a local government or district to obtain prior approval by the local electorate before imposing a special tax, is not unconstitutional under article II, sections 9(a) and 11.

IV

Although for the foregoing reasons I believe it appropriate to base the decision in this case on the statutory provisions of section 53722 rather than on the constitutional provisions of Proposition 13, a majority of my colleagues do not share this view. I strongly believe that, whenever possible, we *25should strive to decide the cases before us through authoritative opinions that command the support of a majority of the justices and thus serve as precedent for future cases. For this reason, and because I would agree with the majority opinion’s conclusion that the enactment of the tax in question was invalid under Proposition 13 were I to believe it appropriate to reach that issue, I have joined the majority opinion.

Finally, although obvious, one additional comment appears appropriate. As judges, we are not free to disregard applicable statutory or constitutional requirements even when they impose formidable obstacles to the government’s financial ability to meet pressing public needs. The provisions of Proposition 62 and Proposition 13 were enacted by the voters of this state, and under our constitutional system the remedy for any untoward consequences that flow from those provisions necessarily lies with the voters, not with the justices of this court.

Panelli, J., concurred.

Hereafter, all section references are to the Government Code unless otherwise specified.

Contrary to the argument of defendant and its supporting amici curiae, this conclusion does not mean that any tax imposed by any special district or local agency invariably will be a special tax. Some special districts or agencies may have broad enough authority over a sufficient number of different subject areas that a tax whose proceeds are not earmarked for a specific purpose and are to be deposited in the district’s general fund may properly be considered a general tax. When such multipurpose local districts are involved, the legislative designation of a tax as a general, rather than a special, tax may be significant.

Given the narrow authority and purpose of the Agency in this case, however, a conclusion that the tax at issue here is a general tax would effectively read the distinction between general and special taxes out of section 53721. Proposition 62 clearly did not intend to give the Legislature the authority to transform what would otherwise clearly be a special tax into a general tax, simply by creating a specialized agency and directing that the proceeds of the tax be paid into that agency’s “general” fund.

Article H, section 9(a), provides in full: “The referendum is the power of the electors to approve or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State.”

Article II, section 11, provides in full: “Initiative and referendum powers may be exercised by the electors of each city or county under procedures that the Legislature shall provide. This section does not affect a city having a charter.”

At the time Geiger was decided, article IV, section 1, provided in relevant part: “The second power reserved to the people shall be known as the referendum. No act passed by the Legislature shall go into effect until 90 days after the final adjournment of the session of the Legislature which passed such act, except acts calling elections, acts providing for tax levies or appropriations for the usual current expenses of the State, and urgency measures. . . . Upon the presentation to the Secretary of State within 90 days after the final adjournment of the Legislature of a [qualified] petition . . . asking that any act . . . of the Legislature be submitted to the electors for their approval or rejection, the Secretary of State shall submit [the matter] to the electors for their approval or rejection . . . and no such act . . . shall go *21into effect until and unless approved by a majority of the qualified electors voting thereon. .. . The . . . referendum powers of the people are hereby further reserved to the electors of each county, city and county, city and town of the State to be exercised under such procedure as may be provided by law.”

In these respects, the voter-approval requirement of section 53722 is similar to the provisions of article XVI, section 18 of the California Constitution, which prohibit local governmental entities from “incurring any indebtedness . . . exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the qualified electors thereof . . . .”

In contrast, “[t]he referendum process allows the voters to veto statutes and ordinances enacted by their elected legislative bodies before those laws become effective. (American Federation of Labor v. Eu (1984) 36 Cal.3d 687, 713-714 [206 Cal.Rptr. 89, 686P. 2d 609].) Referenda do not enact law . . . .” (Referendum Committee v. City of Hermosa Beach (1986) 184 Cal.App.3d 152, 157 [229 Cal.Rptr. 51].)

In City of Westminster v. County of Orange (1988) 204 Cal.App.3d 623, 627-631 [251 Cal.Rptr. 511], the Court of Appeal concluded that in light of the Geiger decision, a separate provision of Proposition 62—section 53727, subdivision (b)—could not constitutionally be applied to require local governmental entities to obtain voter approval of taxes that already *24were in place at the time Proposition 62 was enacted. Unlike section 53722, which establishes a precondition for the imposition of future taxes, section 53727, subdivision (b) operated more like a referendum, subjecting taxes that already had been validly enacted—and whose anticipated revenues had been taken into consideration by the affected local entities—to potential rejection by the voters. Accordingly, even if the City of Westminster decision was correct in applying the Geiger dictum to invalidate section 53727, subdivision (b), in my view the reasoning of that decision should not be extended to render invalid section 53722, which applies only to new taxes adopted after the enactment of Proposition 62.