How Californians Screwed Drought-Plagued California

The state's water hogs and Silicon Valley's tech shuttles benefit from the same tax exclusion. <a href="http://www.shutterstock.com/pic-58226689/stock-photo-cracked-soil-pattern-in-the-zin-valley-arava-israel.html?src=dt_last_search-5">Shutterstock</a> and <a href="https://www.flickr.com/photos/mrjorgen/2503473200/in/photolist-5y14tD-5psY6C-pH2Ceu-jtgxPm-914Lgt-nxd418-mEGtxc-6BeYjK-fAGAub-rGkws-7hVyxJ-rGfK9-5zLUpX-hgHZkL-4PdXn3-azFTYU-adSCYq-4Uy2n-rGfSY-5e9c1v-oU4KMh-rGfFH-cwjwpS-diXKva-nYtPf-jsD7kM-rFmWYd-rGfHy-6gYMdA-krzsj-rGfLm-rGfPd-krzx4-rGkjK-rGfMz-cAVGdb-rGkiw-rGfQn-5uCJ7d-krEB1-8V2zqW-9Ke8kA-4JLmSK-cjCEx1-rGfSd-krEKe-rGkhD-68XKYi-krERU-4MkYBw">Jorgen Schyberg</a>/Flickr

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Solving California’s water crisis got a lot harder on Monday when a state appeals court struck down steeply tiered water rates in the city of San Juan Capistrano. Like many other California cities, this affluent Orange County town encourages conservation by charging customers who use small amounts of water a lower rate per gallon than customers who use larger amounts. The court ruled that the practice conflicts with Proposition 218, a ballot measure that, among other things, bars governments from charging more for a service than it costs to provide it.

In the process of thwarting taxation without voter approval, Prop. 218 stops state and local governments from addressing urgent problems, such as drought.

The drought isn’t the only way Prop. 218 is hamstringing California cities. Early last year, San Francisco’s Municipal Transportation Agency announced a controversial pilot program that would allow Google buses and other tech shuttles to use public bus stops for $1 a stop. Activists, who saw the shuttles as symbols of inequality and out-of-control gentrification, wanted the agency to charge Google much more than that and use the profits to subsidize the city’s chronically underfunded public transit system. But MTA officials argued that their hands were tied: Prop. 218 prevented them from charging more than the estimated $1.5 million cost of administering the program.

Prop. 218, the “Right to Vote on Taxes Act,” was a constitutional amendment drafted in 1996 by the Howard Jarvis Taxpayers Association, the group that led the tax revolt that swept California in the 1970s and eventually helped elect President Ronald Reagan. After 1978, when the group’s signature initiative, Prop. 13, began severely limiting property tax increases, cities and counties moved to plug their budgetary holes with other types of taxes and fees. Prop 218 was designed to constrain those workarounds by requiring that any new tax be approved by voters or affected property owners. For the purposes of the act, taxes included any fees from which a government derived a profit.

Prop. 218 has been widely criticized for making it harder for cities to raise revenues, but the recent cases with water rates and tech shuttles point to another issue: the way the initiative prevents state and local governments from addressing urgent social and environmental problems. It’s worth remembering that withdrawing water from California’s dwindling reservoirs to feed verdant lawns is in itself a tax of sorts, and Mother Nature may not wait until the next election to revoke our ability to levy it.

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