For example, the state reserves the right to tax cigarettes and alcoholic beverages. There are two basic categories of taxes, general and special. General taxes are those that generate revenue for the general operation of government. The proceeds of a general tax may be used for any purpose the governing board chooses to spend them on. Proposition 218 of 1996 requires imposition, extension, or any increase of a general tax by local government to be approved by a majority vote of the electorate.
Special taxes are local taxes where the revenues raised are dedicated to a specific purpose.
For example, a city might levy a parcel tax on property to pay for library services, or a county could vote to levy a sales tax for jails. Proposition 218 requires a new, extended, or increased special tax to be approved by a two-thirds vote of local voters. Fees are charges imposed to recover the cost of providing a service to the feepayer or to pay for the cost of regulating specific activities or industries. Proponents of Proposition 37 maintain that their primary goal is to overturn a unanimous decision of the California Supreme Court in Sinclair Paint Company v. State Board of Equalization . In this decision, the California Supreme Court upheld the constitutionality of a fee imposed on manufacturers of lead-containing gasoline and paint products by the Childhood Lead Poisoning Prevention Act of 1991.