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CA
Prop 43
Local Tax Threshold

Constitutional Amendment

Limits Voters’ Ability to Raise Revenues for Local Government Services

Requires two-thirds voter approval to impose, extend, or increase special taxes, specifically eliminating the ability for a citizen initiative to qualify with a simple majority vote.

SPUR's Recommendation

SPUR has consistently called for reforming Prop. 13 and opposed onerous new restrictions on the government’s ability to raise needed revenue. Prop. 43 would take the state in the opposite direction. The measure would cement and expand Prop. 13's legacy by amending the California Constitution to establish a uniform two-thirds voter-approval threshold for imposing or extending any special tax. It would undermine both the democratic principle of majority rule and one of the few remaining pathways for funding important services.

Vote NO

What Prop. 43 Would Do

Proposition 43 would require a two-thirds vote of the electorate to approve all special taxes, whether placed on the ballot through citizen initiative (voter signatures) or by government officials.

Proposition 13 in 1978 amended the California constitution to limit local governments’ ability to impose, extend, or increase special taxes (taxes dedicated to a specific purpose) by requiring a minimum two-thirds approval by voters. In 2017, the California Supreme Court ruled that taxes placed on the ballot by voters through signature gathering were not subject to this same two-thirds requirement. Prop. 43 seeks to overturn the 2017 decision and amend the constitution to establish a uniform two-thirds voter-approval requirement for any new, extended, or increased local special tax, regardless of whether the initiative was placed on the ballot by local government officials or through a voter initiative.

The Backstory

Prop. 43 is the latest proposal in a decades-long series of amendments to the California Constitution that have significantly limited local governments' ability to fund projects and services by imposing new taxes. In 1978, Prop. 13 capped property tax rates at 1% of assessed value and established the initial two-thirds voter requirement to approve special taxes. In 2017, however, the California Supreme Court clarified in California Cannabis Coalition v. City of Upland (Upland) that many of the key provisions in the California Constitution restricting the imposition of new taxes applied only to proposals put forward by the government. Consequently, the Upland decision established that new special tax measures submitted through citizen initiative required only a 50% plus one vote majority to pass rather than two-thirds approval.1 Since that decision, a number of local special taxes in California have passed with a simple majority after being placed on the ballot through voter initiative. Such measures account for only a small minority of revenue measures statewide.

Prop. 43 would establish a uniform two-thirds voter-approval threshold for new special taxes regardless of how they were placed on the ballot. The California Legislature placed the proposition on the ballot after reaching a compromise with the Howard Jarvis Taxpayer Association, which had another, similar proposal to amend the California Constitution.2 That proposal had qualified for the November 2026 ballot through a voter signature-gathering campaign. The compromise sidelines some of the more complex issues in the Howard Jarvis Taxpayer Association’s proposed amendment and instead offers a simplified amendment focused only on the voter threshold.

Prop. 43 requires a simple majority (50% plus one vote) to pass.

Equity Impacts

Prop. 43 would make it significantly more difficult to raise revenues for local government services and projects by requiring a higher approval threshold. It is likely that the resulting fiscal impacts to government, in the form of unfunded programs or expiring taxes that can no longer be renewed, would fall most heavily on lower-income residents and people of color. In the Bay Area, for example, the citizen initiative process has recently been used to propose taxes to support transit operations and has been discussed as a potential future pathway to place a regional affordable housing bond before the voters. Transit operations and affordable housing are both examples of government expenditures that disproportionately benefit lower-income residents and people of color and that will be difficult to sustain without viable approaches to securing new revenues.

Additionally, placing broad restrictions on how the electorate can raise taxes can drive the government to seek other, less equitable sources of revenue. The severe limitations Prop. 13 placed on property taxes, for example, have, among other factors, helped drive local governments to increasingly rely on sales taxes, a much more regressive revenue source.

Pros

  • Prop. 43 would simplify existing law and establish a consistent, uniform voter threshold for imposing, extending, or increasing new special taxes.
  • The measure would maintain the 50% plus one vote threshold for passing general taxes (those not dedicated to a specific purpose).

Cons

  • Prop. 43 would undermine the basic principle of majority rule by imposing a heightened approval threshold on certain voter-proposed initiatives.
  • The measure would continue and expand on the legacy of Prop. 13, a law that has profoundly distorted California’s tax structure, fueled wealth inequality, and exacerbated the state’s housing challenges by disincentivizing home sales and turnover.
  • It would eliminate one of the few viable ways to raise local revenues at a time when local governments' fiscal needs are especially acute.
Vote NO on Prop 43 - Local Tax Threshold
Footnotes

1 CalMatters, “ACA 22: Local taxes: Limitation,” updated June 25, 2026.

2 Office of the Attorney General, State of California, proposed initiative 25-0006, received July 30, 2025.