UCLA Emmett Center on Climate Change and the Environment just released a report examining the potential impact of Proposition 26, which would expand the definition of a "tax". As a result of this expansion, some state and local fees would require a 2/3 supermajority vote.
Proposition 26 would:
• Undercut the polluter pays principle. Proposition 26 would change a basic principle of state law allowing government to charge polluters upfront fees for the external costs they impose on the public, such as health risks and environmental harms. Proposition 26 would make it harder, for example, to impose some regulatory fees on hazardous products to address their adverse health effects on communities.
• Make it harder to amend existing environmental and public health fees to keep up with changing needs or with inflation. Legislative changes or updates to existing fees, which currently fund many environmental and public health programs, would require a 2/3 supermajority vote to enact unless they fall into one of the Proposition’s exceptions.
• Undermine the establishment of stable funding streams for key state environmental efforts, like the Green Chemistry Initiative and the Global Warming Solutions Act, that have already been enacted but that are not yet well funded.
• Affect even revenue-neutral measures in unforeseeable ways. Proposition 26 requires a 2/3 vote on any legislation that results in a single person paying more tax. The Proposition’s language is worded quite broadly, transforming into a tax any change in statute that "results in any taxpayer paying a higher tax." Under the Proposition’s new definition of "tax," a bill that would cause even one business to pay a higher regulatory fee could be subject to the 2/3 vote requirement. It therefore could be read to define as a tax, for example, a proposal to reduce California taxpayers’ burden to pay for public health protection by charging a polluting industry for that protection.