LOS ANGELES - A California taxpayers' group on Friday took the first step toward collecting signatures for an initiative that would require two-thirds voter approval for all local bonds and tax anticipation notes.
The far-reaching proposal would require similar approval for other local liabilities, such as certificates of participation, and would cover tax allocation bonds that are issued by redevelopment agencies.
The proposed constitutional amendment also calls for benefit assessment reform, including voting requirements for so-called indirect assessments as defined in the initiative.
Richard Gann, president of the Sacramento-based Paul Gann's Citizens Committee, on Friday submitted a nine-page declaration summary of the initiative, titled "The Taxpayers Consent Act," with the California Attorney General's Office. Submitting the summary is the first step required for circulation of initiative petitions under state law.
Shirley Washington, a spokeswoman for Secretary of State March Fong Eu, said the state is required to process the application within 45 days.
Once the green light to circulate petitions has been received, Gann's group will have 150 days to collect 615,958 signatures of registered voters. If they miss the deadline, the initiative will not go forward.
Noting that he is working under "real time constraints," Gann said efforts will persist even if petition circulators fail to qualify the initiative for the November 1994 ballot.
"We will continue gathering signatures so that the initiative could be placed on the next scheduled statewide election ballot," which would be California's presidential primary in March 1996, Gann said.
The proposed initiative is not necessarily a surprise - Gann's group has increasingly criticized the growing use of such vehicles as assessments and tax allocation bonds. The ambitious proposal, however, is by far the most aggressive in targeting voter approval for all local liabilities, including notes and COPs.
Although it remains uncertain if the proposal will qualify for next year's ballot - much less pass - it no doubt will give underwriters reason to pause.
"This initiative is basically directed at the abuses taking place against property owners and the imposition of taxes, fees, and bonded indebtedness at the local level without their approval." Gann said in a telephone interview Friday. "We're trying to address circumventions of Proposition 13 in relation to property owners.
Gann's father, the late Paul Gann, was a co-author of Proposition 13, the landmark 1978 initiative that limited property tax rates in California.
The proposed initiative also takes another swipe at defining voting requirements for general and special taxes. Previous attempts to impose such requirements resulted in conflicting and often confusing court interpretations.
The proposed initiative excludes debt and leasing issuance at the state level.
"We're not addressing the state's taxing or bonding authorities in this initiative," Gann said. "We're primarily addressing local governments and special districts. That's not to say that at some point in time we should not address the state's" debt management procedures.
"Believe me, the state was part of our discussions," he said. "But the reality is the initiative was already at nine full [single-spaced] pages. We can't solve all the problems in one sweep."
Regarding benefit assessment reform, Gann said the initiative does not require imposition of a vote for "direct" assessments, which are defined as those financing capital costs for sidewalks, streets, and sewers, along with water, flood control, or drainage systems.
"If it is a true improvement to the property, the consensus of the drafters [of the initiative] was that this was something we could live with," Gann said.
Any other assessment outside the "direct" benefit definition would require two-thirds voter approval, according to the initiative.