Proposition 218 is a 1996 amendment to the California Constitution that requires voter approval or property-owner consent before a local government can impose or raise most taxes, assessments, and property-related fees. It added Articles XIII C and XIII D to the Constitution and is often called the “Right to Vote on Taxes Act.” The practical effect is that cities, counties, and special districts in California cannot quietly add charges to a property tax bill or a water statement; they have to go through the public first.
Why California Voters Passed It
Proposition 13, approved in 1978, capped property tax rates and required two-thirds voter approval for special taxes. It said nothing about assessments, property-related fees, or general-purpose local taxes. Over the next two decades, local governments leaned on those untouched tools: hotel taxes, business license taxes, utility user taxes, benefit assessments, and service charges all expanded with little or no public vote. Proposition 218’s own findings describe this pattern as something that “not only frustrate[s] the purposes of voter approval for tax increases, but also threaten[s] the economic security of all Californians.”1Legislative Analyst’s Office. Understanding Proposition 218 The measure closed those openings by writing new rules for assessments and fees directly into the state Constitution.
How a Charge Gets Classified
Every charge a local government imposes is presumed to be a tax under Article XIII C unless it fits one of seven listed exceptions. Those exceptions cover charges for a specific benefit or service provided to the payer, regulatory costs like permits and inspections, entrance fees for government property, fines and penalties, development conditions, and assessments or property-related fees that comply with Article XIII D.2California Legislative Information. California Constitution Article XIII C – Voter Approval for Local Tax Levies
The label the agency uses does not control. A “fee” that funds general operations will be treated as a tax and struck down if voters never approved it. Proposition 26, passed in 2010, reinforced this by placing the burden on the local government to show that a charge is genuinely not a tax and that its amount does not exceed the reasonable cost of the service.
Three categories do most of the work under Proposition 218, and each has its own approval pathway: local taxes under Article XIII C, special assessments on real property under Article XIII D, Section 4, and property-related fees such as water and sewer charges under Article XIII D, Section 6.
Voter Approval for Local Taxes
Article XIII C, Section 2 splits local taxes by how the revenue is spent and sets a different threshold for each.3Justia. California Constitution Article XIII C Section 2 – Voter Approval for Local Tax Levies
- General taxes fund any governmental purpose and need a simple majority of voters. The election must be consolidated with a regularly scheduled general election for members of the governing body, unless the governing body unanimously declares an emergency.4Legislative Analyst’s Office. California Constitution Article 13C – Voter Approval For Local Tax Levies
- Special taxes are earmarked for a specific purpose and need at least two-thirds voter approval. A tax deposited in a general fund but designated for a specific use still counts as a special tax.
Special-purpose districts, including school districts, cannot levy general taxes at all. They are limited to special taxes approved by two-thirds of voters. A tax that misses its required threshold is unconstitutional and cannot be collected.
Rules for Special Assessments
A special assessment is a charge on real property to pay for a specific improvement or service that directly benefits the assessed parcels. Article XIII D, Section 4 sets both substantive limits and a strict procedure.5California Legislative Information. California Constitution Article XIII D – Assessment and Property-Related Fee Reform
Before proposing an assessment, the agency must commission a report prepared by a registered professional engineer. The report has to identify every parcel receiving a special benefit, calculate each parcel’s proportionate share, and separate the special benefits from any general benefits the project confers on the broader community. Only the special-benefit portion can be funded through the assessment. General enhancement of property values does not qualify as a special benefit.
The California Supreme Court applied these rules in Silicon Valley Taxpayers Association v. Santa Clara County Open Space Authority, striking down an open-space assessment because the engineer’s report treated every benefit as special without measuring the advantage to individual parcels. The court wrote that “If everything is special, then nothing is special,” and confirmed that courts will independently review whether an assessment reflects a distinct, measurable benefit to each property.6FindLaw. Silicon Valley Taxpayers Association Inc v. Santa Clara County Open Space Authority
Procedurally, the agency must mail written notice to the record owner of every affected parcel. The notice has to state the proposed amount for that parcel, the total chargeable to the district, how long payments will last, the reason, the calculation methodology, and the time and place of the public hearing. A ballot and a disclosure of the majority-protest rule go in the same envelope. The hearing cannot occur until at least 45 days after mailing.7Justia. California Constitution Article XIII D Section 4 – Assessment and Property-Related Fee Reform
At the hearing, ballots are tabulated by weight. Each ballot counts in proportion to the financial obligation the assessment would place on that parcel, so a property facing $1,000 has ten times the voting weight of one facing $100. If the weighted ballots against exceed those in favor, the assessment fails.
Rules for Property-Related Fees
Property-related fees are ongoing service charges tied to property ownership, most commonly water, sewer, and trash collection. Article XIII D, Section 6 imposes five substantive requirements that every such fee, new or existing, has to satisfy:8Justia. California Constitution Article XIII D Section 6 – Property Related Fees and Charges
- Revenue cannot exceed the funds required to provide the service.
- Revenue cannot be used for any purpose other than the one the fee was created for.
- The amount charged to a parcel cannot exceed the proportional cost of the service attributable to that parcel.
- The service must be actually used by, or immediately available to, the property owner. Charges based on potential or future use are not allowed, and standby charges have to be treated as assessments under Section 4.
- Fees cannot fund general governmental services such as police, fire, ambulance, or library services available to the public at large.
Procedurally, the agency must mail notice to every affected owner at least 45 days before a public hearing, stating the proposed amount, how it was calculated, and why it is needed.9California Legislative Information. California Constitution Article XIII D – Assessment and Property-Related Fee Reform At the hearing, the agency counts written protests. The protest process gives every owner one equal vote regardless of parcel value or fee size. If a majority of owners of the identified parcels submit written protests, the agency cannot impose the fee.
Water, sewer, and refuse collection fees are exempt from an additional ballot election. Other property-related fees must also win approval from either a majority of affected property owners or two-thirds of voters in the affected area before taking effect.
The Right to Repeal by Initiative
Article XIII C, Section 3 guarantees voters the right to use the initiative process to reduce or repeal any local tax, assessment, or fee. The Constitution says this power “shall not be prohibited or otherwise limited.” The signature threshold matches the one for statewide statutory initiatives: 5 percent of total votes cast for Governor at the last gubernatorial election within the jurisdiction.
In Bighorn-Desert View Water Agency v. Verjil, the California Supreme Court held that voters can use an initiative to reduce the rates a public water district charges for ongoing delivery. The court also drew a limit: voters cannot use the initiative process to impose a voter-approval requirement on all future rate adjustments.10Supreme Court of California. Bighorn-Desert View Water Agency v. Verjil
What Proposition 218 Does Not Cover
Several common charges fall outside its reach. Article XIII D, Section 3(b) excludes fees for gas and electric utility service from the definition of property-related charges, so those rates skip the notice, hearing, and protest procedures.5California Legislative Information. California Constitution Article XIII D – Assessment and Property-Related Fee Reform Fines and penalties for violating the law, entrance fees for public facilities, charges for the purchase or rental of government property, regulatory fees that do not exceed the reasonable cost of regulation, and developer impact fees imposed as a condition of property development are also excluded from the definition of “tax.”2California Legislative Information. California Constitution Article XIII C – Voter Approval for Local Tax Levies Developer impact fees are governed by separate state statutes.
Since Proposition 26 took effect in 2010, the agency carries the burden of proving that a charge it claims is exempt genuinely qualifies as a non-tax. A regulatory fee that generates more revenue than the regulation costs can be reclassified by a court as a tax that required voter approval.
How to Challenge a Charge
If a local agency imposes a tax, assessment, or fee without following the required procedures, a property owner can sue. California’s validation statutes (Code of Civil Procedure Sections 860 through 870.5) create an expedited process, and the deadline is short: a challenge must be filed within 60 days after the agency acts. If no one files within that window, the charge is deemed valid and becomes permanently immune from attack. These cases receive calendar preference, and appeals must be noticed within 30 days of judgment. Any constitutional argument that could have been raised but was not is waived.
Sixty days passes quickly. If you believe a charge on your property tax bill, water statement, or trash invoice was imposed without the notice, hearing, protest, or vote that Proposition 218 requires, the time to act is immediately after the agency approves it, not after the first bill arrives.