Stop Hidden Taxes Initiative to Go on November Ballot

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The state Constitution requires two-thirds approval of the Legislature for new or increased taxes. Local tax increases also are subject to voter approval. Lawmakers have attempted to circumvent the law by designating tax hikes as "fees," then adopting them with just a majority vote.

If approved by voters, Proposition 26, the Stop Hidden Taxes Initiative, will require the Legislature and local officials to abide by California’s Constitution, so new state taxes become law only with a two-thirds vote, and local taxes are increased only after voter approval.

Reducing Tax Burden

"The way out of this recession is by creating jobs, growing the economy, and reducing the tax burden on hard-working California families and the businesses that create those jobs," said CalChamber President and CEO Allan Zaremberg, co-chair of the Stop Hidden Taxes campaign committee.

"Hidden taxes and higher fees work against job creation and make it even harder to recruit the businesses and jobs that are needed to re-energize our economy and provide the taxes to fund critical state services," Zaremberg said.

"If we are going to attract jobs to California, businesses need the certainty of a stable tax structure, not the constant exposure to unending revenue gimmicks. Voters have said ‘enough is enough’ to higher taxes and fees and passage of this measure will help end the politicians’ deceptive practice of labeling taxes as fees so they can be passed with a simple majority vote," continued Zaremberg.

Constitutional Amendment

Proposition 26 is a constitutional amendment that simply and more clearly defines fees and taxes to close loopholes used by the Legislature to avoid the two-thirds vote requirement.

The initiative also applies to local governments; includes a provision to sunset any fee/tax increases not meeting the requirements of this measure enacted between the beginning of this year and the effective date of the measure if it is passed by voters; and prohibits the Legislature from using a simple majority vote to raise taxes on one group while reducing those on another group (the so-called "revenue neutral" maneuver).

In the past decade, legislators have proposed billions of dollars in hidden taxes that affect everyday items like cars, food, cell phones, insurance, fuel and energy.

The initiative permits valid fees—those that legitimately cover the cost of or benefit from the service being provided, such as fishing or hunting licenses—to be passed with a majority vote of the Legislature or approved by local officials.

More information on the initiative is available at www.nomorehiddentaxes.com.

The campaign also will be opposing Proposition 25, the majority vote budget measure.