Legal update: Recent developments regarding school districts and parcel taxes

By Bode Owoyele, CSBA Associate General Counsel

Parcel taxes have long been an essential part of school financing in California. Under the state Constitution, a school district may impose a special tax when a ballot measure proposing the tax is supported by two-thirds of qualified electors within that district. (California Constitution, Art. XIII A, § 4) The November 2022 election saw the placement of only seven such school district tax measures on the ballot, one of which failed to garner the required two-thirds support of the district’s qualified voters. According to EdSource’s Dec. 6, 2022, report, this low number of parcel tax measures on the November 2022 ballot is attributable to the calculations that districts make about the likelihood that a parcel tax measure will receive the required two-thirds support from district voters. EdSource stated that, “Over four decades, about two in five tax measures failed for lack of a two-thirds majority.” With this high two-thirds support hurdle, some school districts are beginning to defer to local citizen’s initiatives, which require a simple majority, to pass their parcel tax. (California Constitution, Art. II, § 10) Though these citizen-led efforts have not gone by without challenges in the courts, they have been successful.

For example, in City and County of San Francisco v. All Persons Interested in The Matter of Proposition G, ((2021) 282 Cal. Rptr. 3d 17), Proposition G, a parcel tax proposal for the San Francisco Unified School District’s specific uses, including teacher salaries, passed with 60 percent support of San Francisco voters. In negotiation with its labor union, the district had agreed to a pay increase for employees, contingent upon additional revenues being approved by San Francisco voters. Upon the filing of an action by the city to establish that Proposition G was validly enacted, defendants contended that Proposition G was invalid because it failed to garner two-thirds vote required under various constitutional provisions. (California Constitution, Art. XIII A, § 4, Art. XIII C, § 2, Art. XIII D, § 3(a).)  Defendants also argued that the three individuals who signed the notice of intent to circulate petitions on behalf of Proposition G were not the proponents of the measure and, in effect, Proposition G was not a citizen’s initiative and was subject to the two-thirds majority requirement to pass.

The Court of Appeal, affirming its earlier decision[1], ruled that the two-thirds majority requirement “constrained only local government entities” who place a measure on the ballot and did not displace the citizens’ right to enact initiatives by simple majority. The court also rejected defendants’ arguments seeking to define “local governmental entities,” such as cities, counties and districts, as inclusive of citizens of such entities, to which the two-thirds majority requirement would apply. Thus, the court held that Proposition G was validly enacted as a citizen’s initiative measure.

From this case and others like it, there are lessons to be learned. First, in imposing taxes, citizens have more latitude than local government agencies. As stated by the California Supreme Court in California Cannabis Coalition v. City of Upland, ((2017) 3 Cal.5th 924) “The Constitution speaks of the initiative and referendum, not as a right granted the people, but as a power reserved by them.” Consequently, courts have jealously guarded and liberally construed the initiative power, and have consistently resolved any doubt in favor of voters exercising the right to place taxation measures on the ballot whenever possible.

In addition, when the use of a local citizen’s initiative proposal for parcel tax purposes is being considered, districts should carefully monitor the involvement of district staff and officials, including trustees, senior management, etc. Districts should cooperate and/or collaborate with interested community members only to the extent permitted by law. Even as the court rejected defendants’ argument in the Proposition G case that the definition of “cities, counties and special districts” includes citizens of those local entities, too much involvement by a local government entity could turn a court’s analysis such that it finds that the tax measure was actually a local government-sponsored measure. Thus, it is prudent to understand that a determination of whether a district’s involvement was appropriate or illegal will turn on the facts of each case and to anticipate that opponents of the exercise of the citizen’s initiative power will want to explore any legal shortcomings. Finally, districts must ensure that district funds, services, supplies or equipment are not used to support or defeat a parcel tax ballot measure in violation of Education Code §7054.

Any district with a question on parcel taxes should consult CSBA’s District and County Office of Education Legal Services at or their district legal counsel.

[1] City of S.F. v. All Persons Interested in Matter of Proposition C, (2020) 265 Cal. Rptr. 3d 437.