[21] As a result of the Knox decision, local governments could legally impose special assessments on real property for a wide range of purposes without voter approval.
[24] For example, the California Supreme Court ruled that a local municipal utility, such as a city providing domestic water service, is entitled to a reasonable "return on investment" (otherwise referred to as "profit").
[72] The California Supreme Court construed the election consolidation requirement to not apply when a general tax is proposed by the voters exercising the local initiative power.
Since general taxes are not legally dedicated for specific purposes, they can be spent at the complete discretion of local politicians, including on public employee salaries and benefits.
"[90] Proposition 218 constitutionally requires that its provisions be "liberally construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer consent.
[95] While the California Cannabis Coalition decision applied only to the election timing requirement for general taxes under Proposition 218,[72] in Altadena Library District v. Bloodgood, 192 Cal.
[106] California courts have generally been lenient in allowing local governments to spend public funds associated with activities (such as opinion polling) before a tax proposal is placed on the ballot.
This process involves conducting polling before officially calling an election to determine the specific ballot measure language that yields the highest level of voter support.
Exercise of the local initiative power under Proposition 218 was unanimously confirmed and upheld by the California Supreme Court in Bighorn-Desert View Water Agency v. Verjil, 39 Cal.
[125] The California Legislative Analyst's Office stated that, based on the actual constitutional language of the initiative power provision, the only limits appear to be those under federal law.
Section 1 of Article XIII D specifies that its provisions apply to all special assessments and property-related fees and charges regardless of whether such levies are imposed pursuant to state statute or local charter authority.
[149] Fees on the extraction of groundwater are also generally subject to reduction or repeal using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder.
[186] The detailed and substantive assessment reforms contained in Proposition 218 were unanimously confirmed and upheld by the California Supreme Court in Silicon Valley Taxpayers' Association, Inc. v. Santa Clara County Open Space Authority, 44 Cal.
[189] The underlying legal basis for the historical deferential standard of review was that the establishment of an assessment district takes place as a result of a peculiarly legislative process.
Prior to Proposition 218, special assessment laws were generally statutory, and the constitutional separation of powers doctrine served as a foundation for a more deferential standard of review by the courts.
[191] The separation of powers doctrine no longer justified allowing a local agency to usurp the judicial function of interpreting and applying the constitutional provisions that govern assessments under Proposition 218.
[195] The California Supreme Court in the Silicon Valley Taxpayers case also stated that with respect to Proposition 218 all legislation must be subordinate to the constitutional provision, and in furtherance of its purpose, and must not in any particular attempt to narrow or embarrass the measure.
[198] The successful equal dignity argument applicable to the standard of review issue in the Silicon Valley Taxpayers case was developed by constitutional attorney Jack Cohen.
[212] Effective January 1, 2022, a notice by a water or sewer agency must also include a statement that there is a 120-day statute of limitations for challenging any new, increased, or extended property-related fee or charge.
[222] Use of the term "required" in the constitutional language is intended to preclude local agencies from levying property-related fees or charges for costs that are excessive, unreasonable or unnecessary.
If voters believe a property-related fee or charge is excessive, unreasonable or unnecessary, exercise of the local initiative power under Proposition 218 to reduce or repeal the levy is also an available option.
This is especially the case since under Proposition 218 in any legal action contesting the validity of a property-related fee or charge, the burden is on the local agency to demonstrate compliance with the law.
However, California appellate courts have generally allowed local agencies greater latitude in charging property owners for potential or future use of a property-related service.
"[220] The Capistrano decision also rejected the argument that higher water tier prices that exceed the cost of service may be justified as "penalties" not within the purview of Proposition 218 restrictions.
Proposition 218 also does not prohibit local agencies from using voluntary donations or securing a voter approved tax increase to pay for lifeline utility rate programs.
Some local agencies also use existing revenues from stormwater fees and charges imposed without voter approval before Proposition 218 became law when an election was not legally required at that time.
"[257] Jon Coupal, President of the Howard Jarvis Taxpayers Association, wrote that SB 231 is an end run around Proposition 218 in that it attempts to illegally rewrite a Prop.
After property owner or voter approval of a property-related fee or charge in an election, the local initiative power under Proposition 218 can also generally be used by the electorate to reduce or repeal a stormwater levy.
The independent standard of review for property assessments adopted by the California Supreme Court in the landmark Silicon Valley Taxpayers case[194] also applies to legal challenges involving property-related fees and charges.
[276][277] Section 5 of Proposition 218 contains a constitutional command that its provisions be "liberally construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer consent.