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Home My WebLink About04 - Opposing Assembly Constitutional Amendment 1Q SEW Pp�T CITY OF z NEWPORT BEACH c�<,FORN'P City Council Staff Report October 24, 2023 Agenda Item No. 4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Tara Finnigan, Assistant City Manager - 949-644-3001, tinnigan@newportbeachca.gov PREPARED BY: Alan Rivera, Management Fellow, arivera@newportbeachca.gov PHONE: 949-644-3313 TITLE: Resolution No. 2023-60: Opposing Assembly Constitutional Amendment 1 ABSTRACT: At its September 26, 2023 meeting, the Newport Beach City Council voted unanimously, via a straw poll, in favor of staff returning with a resolution for its consideration that would, if adopted, convey the City of Newport Beach's opposition to the proposed Assembly Constitutional Amendment 1 (ACA 1). ACA 1 proposes to amend the California Constitution to create certain exceptions to Proposition 13, the measure that generally fixed property tax rates at 1 % of the full assessed value of a property and capped property tax increases at 2% per year, with certain exceptions. Proposition 13 also imposed a requirement of a two-thirds majority vote for city, county and special district jurisdictions to levy special taxes, as well as a two-thirds vote majority requirement for the Legislature to raise state tax rates or amounts of revenue collected. If approved, ACA 1 would lower the two-thirds supermajority threshold requirement to 55% for local jurisdictions to fund public infrastructure, affordable housing, downpayment assistance and permanent supportive housing for persons at risk of chronic homelessness or the acquisition or lease of real property for such purposes. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Adopt Resolution No. 2023-60, A Resolution of the City Council of the City of Newport, California, Opposing Assembly Constitutional Amendment 1. DISCUSSION: At the request of Mayor Pro Tern Will O'Neill and Councilmember Robyn Grant, at the September 26, 2023 City Council meeting, the Council considered placing a resolution on a future agenda that, if adopted, would state the Council's opposition to ACA 1. The Council voted unanimously, via a straw poll, in favor of staff bringing forward a resolution for its consideration. 4-1 Resolution No. 2023-60: Opposing Assembly Constitutional Amendment 1 October 24, 2023 Page 2 Proposition 13 is often called the "Third Rail" of California politics due to the protective benefit it provides homeowners (particularly older Californians and persons on fixed incomes) who would otherwise be subject to volatile property tax increases due to increases in property market values in a given time period. Many groups have either ardently defended or advocated to alter Proposition 13 since it was adopted in 1978. Proponents of protecting Proposition 13 argue that it keeps Californians from being priced out of their homes and businesses from being locked out of doing business in California. As proposed, ACA 1 would amend the California Constitution and weaken longstanding taxpayer protections offered by Proposition 13 through creating additional exceptions to the voter -approved measure, such as: lowering the two-thirds supermajority threshold requirement to 55% for local jurisdictions to fund projects labeled as public infrastructure, affordable housing, downpayment assistance and permanent supportive housing for persons at risk of chronic homelessness or the acquisition or lease of real property for such purposes. Resolution No. 2023-60, if adopted, would convey the City's opposition to ACA 1 due to the exceptions it would create to the taxpayer protections contained in the California Constitution by Proposition 13. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Resolution No. 2023-60 4-2 ATTACHMENT A RESOLUTION NO. 2023- 60 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, OPPOSING ASSEMBLY CONSTITUTIONAL AMENDMENT 1 WHEREAS, in 1978, California voters amended the California Constitution by passing Proposition 13 ("Proposition 13"), an initiative prohibiting the ad valorem tax rate on real property from exceeding one percent (1 %) of the full cash value of the property, subject to certain exceptions; WHEREAS, Proposition 13 additionally prohibited any city, county, or special district from imposing a special tax unless imposed by a two thirds (2/3) supermajority vote of the voters in that jurisdiction, subject to certain exceptions; WHEREAS, proposed Assembly Constitutional Amendment 1 ("ACA 1") would amend the California Constitution to create additional exceptions to Proposition 13 by lowering the two thirds supermajority voter threshold to only fifty-five percent (55%) for local jurisdictions to levy an ad valorem tax on real property to pay for bonds issued by the local jurisdiction to fund public infrastructure, affordable housing, downpayment assistance, and permanent supportive housing for persons at risk of chronic homelessness, or the acquisition or lease of real property for such purposes; WHEREAS, chipping away at the protections of Proposition 13 results in overall higher taxes and increases the already onerous tax burden on Californians, and runs counter to conserving economic opportunity in California; and WHEREAS, the City of Newport Beach opposes ACA 1 due to the additional exceptions it would create to the taxpayer protections enshrined in the California Constitution by Proposition 13. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby formally opposes Assembly Constitutional Amendment 1 and reaffirms its commitment to protecting taxpayers. Section 2: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. 4-3 Resolution No. 2023- Page 2 of 2 9 Section 3: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 4: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 24 day of October, 2023. NOAH BLOM Mayor Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY TTORNEY'S OFFICE arcn C. Harp City Attorney