Today (3) Howard Jarvis Taxpayers Association filed suit in the Superior Court in San Francisco challenging the city’s illegal special tax on commercial property owners. The tax is a punitive gross receipts tax which has been estimated to reduce commercial property values in the city by 11-12%.

Proceeds from the tax, if implemented, will fund early childhood education programs. Because the tax is expressly for a special purpose, it required a 2/3 vote of the city’s electorate under both Propositions 13 and 218. But it did not pass by that margin. Rather, the tax proposal, designated as Measure C, received a scant 50.87% vote.

“The California Constitution could not be more clear,” said Jon Coupal, President of Howard Jarvis Taxpayers Association, California’s leading taxpayer advocacy organization named for the author of Proposition 13. For 40 years, special taxes at the local level have required a two-thirds vote of the electorate. “Moreover, the two-thirds vote threshold mandated by Propositions 13 and 218 remain very popular in California notwithstanding the fact that the state has drifted leftward in the last couple of decades,” Coupal said.

HJTA filed suit on its own behalf as well as a coalition of commercial property owners who will be heavily impacted by the illegal tax.