Should California Voters Approve Proposition 43?

What Would Proposition 43 Do?

This measure would require at least two-thirds of local voters to approve any local initiative that would create, extend, or increase a special tax. The measure would apply to initiatives placed on a local ballot on or after January 1, 2027.

This new supermajority vote requirement would apply to special tax voter initiatives raising revenue for all types of local governments, including cities, counties, special districts, school and community college districts, and any other local or regional government entity.¹Under California’s Constitution, all taxes levied by special districts, school districts, and community college districts are considered “special taxes”, so Prop. 43’s two-thirds vote requirement would apply to any taxes placed on the ballot by voters to generate revenues for special districts and school districts, as well as city and county taxes for dedicated purposes.

Glossary of Key Terms

What Are the Current Vote Requirements for Local Revenue Increases in California?

California’s Constitution has a complex set of rules governing how local governments can raise taxes and other types of revenue. These rules were put in place by statewide ballot measures over the past several decades, beginning with Prop. 13 in 1978 and followed by other measures creating additional restrictions on local revenue-raising capacity, including Prop. 62 (1986) and Prop. 218 (1996).

These rules apply to local measures to create new taxes as well as to increase or extend any existing tax.

Tax measures proposed by local governments — such as city councils or county boards of supervisors — must go on the ballot and be approved by voters. Current voter-approval thresholds differ depending on the type of tax that would be raised:

• A general tax requires only a simple majority vote to pass, with the revenue available for any program or service.
• A special tax requires a two-thirds vote to pass, and includes a tax dedicated to a specific purpose.

Special taxes proposed through the local voter initiative process are subject to different rules. In recent years, a series of court decisions have clarified that the two-thirds vote requirement for special taxes in the state Constitution does not apply to special tax measures placed on the ballot by local voter initiative. Therefore, both general taxes and special taxes proposed by voters can be approved with a simple majority vote.²Several cases involving special tax voter initiatives that were approved with a simple majority vote were appealed to the California Supreme Court, but the Supreme Court denied review of the appellate court decisions, allowing these decisions to stand. A variety of special tax initiatives have been approved over the past several years with a simple majority vote, such as:

• San Francisco’s Measure C in November 2018, creating a tax on commercial landlords to raise funds for child care and early education, which passed with 51% of the vote.
• Fresno’s Measure P in November 2018, increasing the local sales tax rate to fund community parks, which passed with 52% of the vote.
• Los Angeles’ Measure ULA in November 2022, creating a property transfer tax on sales of high-value property to raise funds for affordable housing development and homelessness service, which passed with 58% of the vote.
• Madera County’s Measure T in November 2024, renewing a local sales tax rate to fund transportation projects, which passed with 52% of the vote.

Certain types of local taxes are always classified as special taxes for the purposes of voter approval requirements. This includes:

• Taxes levied by special-purpose districts, including school districts, community college districts, and special districts.
• Parcel taxes, which are taxes on parcels of property that are not based on the property value. These taxes are generally levied at a flat rate per parcel, but can also be levied on a per-square foot or per-room basis.

What Services Do Local Governments in California Provide?

Californians in every community across the state benefit from services provided by local governments. Local services help keep people safe and healthy by providing fire protection, law enforcement, public health services, hospitals and emergency services, road safety, and more. Local governments provide educational services through schools, community colleges, and public libraries, and provide outdoor community spaces like public parks and playgrounds.

Californians experiencing economic insecurity, food security, or who don’t have access to private health insurance can access financial assistance, food assistance, and health care because counties are there to administer public health and economic security programs. Cities can support the development of affordable housing to ensure more of their residents can afford a safe place to live.

The services provided by California’s local governments vary according to the type of entity:

• Counties administer health and human services programs such as Medi-Cal health coverage, CalFresh food assistance, and CalWORKs cash assistance for families. Counties also provide public health, behavioral health, and child welfare services. Additionally, counties are responsible for overseeing the local justice system and courts, administering elections, and providing municipal services like sewer systems and trash pick-up in unincorporated areas. 
• Cities provide a variety of municipal services such as fire protection, housing and urban planning, parks and recreation, libraries, street repair, water and sewer systems, and law enforcement — although some of these services may be provided by special districts in some areas.
• School and community college districts oversee thousands of TK-12 schools and over 100 community colleges.
• Special districts provide specialized services such as fire protection, water, electricity, parks and recreation, transit, hospitals, and other health care services.
• Regional entities such as Joint Powers Authorities and Councils of Government coordinate policy and service provision across regions spanning multiple cities or counties, such as regional transportation authorities.

How Do Local Governments Raise Revenue?

Local governments in California rely on a variety of revenue sources, including transfers from the state and federal governments, allocations of local property taxes, and various other taxes, service charges, assessments, and fees.

Most types of local governments receive some revenues from the local property tax, capped at 1% by Prop. 13 (1978). Property taxes are collected by counties and the revenues are allocated to support city and county governments, school districts, community college districts, and special districts in accordance with formulas established in state law. Local governments and voters cannot increase property taxes beyond the 1% rate, except to finance infrastructure bonds.³Property tax increases to support school infrastructure bonds can generally be approved by 55% of local voters. All other property taxes for infrastructure bonds must be approved by two-thirds of voters.

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Other common types of taxes supporting local services include sales taxes (known as transactions and use taxes at the local level), taxes on hotel stays (known as transient occupancy taxes), property transfer taxes, utility user taxes, and business license taxes.

The revenues that make up local government budgets vary by the type of entity, and the legal authority to raise taxes also differs by government type. Cities and counties have fairly broad authority to raise a variety of taxes — with voter approval — while special districts and school districts have more limited authority. These districts are largely limited to parcel taxes — a tax on parcels of land not based on their value — as a source of discretionary revenue, although some can levy district sales taxes and certain other types of taxes.

• More than half of county-level revenues statewide come from the state and federal governments and local property taxes. Other types of taxes make up a small share of total county revenues — generally less than 3%. Common types of taxes levied by counties include sales taxes, property transfer taxes, taxes on hotel stays, and utility user taxes.
• City-level revenues primarily come from service charges for municipal functions — such as electricity, water, and sewer services — and various taxes. These two categories generally each make up around one-third of total city revenues statewide. Local property tax revenues and sales taxes are the largest sources of tax revenues for cities, each representing about one-quarter of tax revenues. Other major tax revenue sources for cities include taxes on hotel stays, utility user taxes, and business license taxes.
• Special district revenues come largely from customer service charges for the service provided by the district, local property taxes, and certain other taxes and assessments, depending on the type of district.⁴The composition of special district revenues depends on the type of special district. Enterprise districts provide services to customers for a charge and operate similar to businesses, being largely financed by user charges. Examples of enterprise districts include health care districts, airport districts, water districts, and other utility districts. Non-enterprise districts provide benefits to entire communities — such as fire protection and road repair services — and are primarily funded by property taxes and other types of taxes and assessments. As noted above, taxes levied by special districts are always considered special taxes so they require approval of two-thirds of voters in the district, unless they are placed on the ballot by voters.
• School district revenues mainly come from the state through the Prop. 98 minimum funding guarantee and from local property taxes. Some school districts augment these funding sources with voter-approved parcel taxes.

How Would Proposition 43 Affect California Communities?

Proposition 43 Would Make It More Difficult for Communities to Generate Revenues to Meet Local Needs

California already imposes high barriers to raising local revenues by requiring all special taxes levied by local governments to be approved by two-thirds of voters instead of a simple majority, and by classifying certain types of taxes — parcel taxes and taxes levied by special districts and school districts — as special taxes subject to higher vote requirements. Extending the two-thirds vote requirement to voter-initiated special tax proposals, as Prop. 43 proposes, would decrease the likelihood that these measures would pass, even if a significant majority of local voters support the measure and the services that the new revenues would fund.

In contrast to the high bar for raising taxes, local governments do not need voter approval to reduce services — and cuts to services often result when localities face revenue shortfalls. Yet, communities also have the option of raising revenues to help close budget gaps. If Prop. 43 passes, counties and cities would still have the ability to raise general taxes with approval from a simple majority of voters to shore up local services. However, local voters’ ability to propose new special taxes to protect or strengthen key services would be limited as local voter initiatives would become much more challenging to pass. Additionally, voters in school districts and special districts would face a higher bar to increase revenues to preserve and expand services, regardless of whether the funds would be targeted to specific programs.

Proposition 43’s Constraints on Local Revenues Would Make Things Harder for Communities Already Struggling

Governments across the board have felt the impacts of inflation on the costs of providing public services, and the state’s aging population increasing the cost of providing some services such as health care. The impacts of the 2025 federal budget reconciliation law, H.R. 1 — also known as the “One Big Beautiful Bill Act” — along with the effects of climate change, the labor market and broader economic impacts of arrests and deportations of immigrants, and other federal policy changes such as tariffs, are also creating challenges for localities.

H.R. 1 will deeply harm Californians by cutting funding for essential health care and food assistance programs, primarily Medi-Cal and CalFresh, pushing more people into poverty and widening racial and economic inequities across the state. This is already increasing the level of need in communities as people lose health coverage and food assistance benefits while increasing costs for some local governments. The pressures on local governments will continue to increase substantially in the coming years as additional H.R. 1 policies go into effect.

Counties

Counties will be the most impacted by H.R. 1 and will see higher costs due to a combination of direct funding reductions and cost shifts, workload increases, and increases in uninsured individuals seeking basic care at county hospitals, which counties are legally required to provide. In addition to the direct impacts of H.R. 1, the increase in hardship created by the federal cuts will likely increase the demand for other county services such as housing and homelessness supports, and counties will have difficulty meeting this demand with less funding.

Local Health Districts

Local health care districts — a type of special district that can provide hospital care, ambulance services, health clinics, skilled nursing facilities, and other health-related services — will likely also be strained as individuals lose health coverage. Many of these districts are located in rural or underserved areas.

Public Hospitals

Many California public hospitals — including those operated by counties and local health care districts — have already been facing financial strain in recent years, particularly rural hospitals and others that serve high shares of patients with coverage through Medi-Cal and or Medicare. H.R. 1’s Medi-Cal cuts will compound these challenges. Nationwide, there are concerns about how rural hospitals and clinics will stay afloat as the cuts continue to go into effect. If health care providers cut services or close down, many individuals in those communities would be left without adequate health care.

Cities

While cities will be less directly impacted by H.R. 1, the federal law did rescind some funding related to transportation and climate-related programs. In addition, cities will likely be impacted by some downstream effects of the health care and food assistance cuts. For example, local economies may be impacted by the strains on household budgets, and the need for city services such as affordable housing and homelessness services may increase as more residents are faced with the choice between paying for food and medical care or paying rent.

These challenges would come on top of existing financial pressures such as increasingly frequent climate disasters (such as the devastating January 2025 Los Angeles wildfires) and the increasing cost of providing city services due to inflation and other factors, including rising health care costs driving up expenses for health benefits for city workers and retirees.

School Districts

School districts also face challenges from federal funding freezes and grant cancellations,  inflationary pressures, increasing need for special education, growing costs of services, and decreased funding levels due to declining enrollment.

Proposition 43 Would Give Disproportionate Power to a Small Share of Voters

Supermajority vote requirements allow a small share of voters to block policies favored by a large majority of voters. For example, Prop. 43 would allow 35% of local voters to block an initiative that 65% of voters support. In other words, a minority of voters could prevent the community from raising revenues to support services that the vast majority of community members say are needed.

Proposition 43 Would Allow Statewide Voters to Restrict Local Control to Raise Revenue

Statewide ballot measures require just a simple majority vote to pass, even if the measure proposes to amend the state Constitution. Prop. 43 would allow a bare majority of statewide voters to impose a supermajority vote requirement on local voters, limiting the ability of local voters to raise revenues to fund public services — even though different communities in the state have different needs and preferences.

Proposition 43 Supporters and Opponents

Prop. 43 is supported by the Howard Jarvis Taxpayers Association and Reform California, a political action committee headed by State Assemblymember Carl DeMaio. It is opposed by Evolve California, a grassroots organization focused on public education funding and Prop. 13 reform, and State Assemblymember Buffy Wicks.

The California Budget & Policy Center is a nonpartisan research and analysis nonprofit and does not endorse or oppose ballot measures. This analysis reflects the institutional position of the Budget Center, developed and reviewed by our policy leadership team.

Kayla Kitson and Scott Graves contributed to this publication.