Opinion ID: 1436613
Heading Depth: 1
Heading Rank: 7

Heading: the charter of the city and county of san francisco

Text: (9) Because our prior decisions do not establish the invalidity of Proposition R, we must consider whether any provision of the San Francisco Charter precludes exercise of the initiative power in this manner. For the reasons stated above, it is clear that section 9.108 of the charter, which provides that ordinances levying taxes are not subject to the referendum, does not do so. In construing the San Francisco Charter we begin with the established principle that all reasonable doubts must be resolved in favor of the people's exercise of the reserved initiative power. ( Brosnahan v. Brown, supra, 32 Cal.3d 236, 241.) We have consistently recognized that the initiative power must be construed liberally so as to promote the democratic process established by inclusion of the initiative and referendum in the Constitution. (See Legislature v. Eu (1991) 54 Cal.3d 492, 501 [286 Cal. Rptr. 283, 816 P.2d 1309]; Raven v. Deukmejian (1990) 52 Cal.3d 336, 341 [276 Cal. Rptr. 326, 801 P.2d 1077]; Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 219 [149 Cal. Rptr. 239, 583 P.2d 1281]; Associated Home Builders etc., Inc. v. City of Livermores, supra, 18 Cal.3d 582, 591; San Diego Bldg. Contractors Assn. v. City Council (1974) 13 Cal.3d 205, 210, fn. 3 [118 Cal. Rptr. 146, 529 P.2d 570, 72 A.L.R.3d 973].) [A]ll presumptions favor the validity of initiative measures and mere doubts as to validity are insufficient; such measures must be upheld unless their unconstitutionality clearly, positively, and unmistakably appears. ( Legislature v. Eu, supra, 54 Cal.3d 492, 501.) That obligation is no less weighty when the exercise of the power of initiative reserved in a city charter is challenged. ( Birkenfeld v. City of Berkeley, supra, 17 Cal.3d 129, 147.) As we have noted above, the initiative power reserved under the San Francisco Charter is extremely broad. Section 9.108, subdivision (a) of the charter reserves to the people the power to propose by petition, and to adopt or to reject at the polls, any ordinance, act or other measure which is within the power conferred upon the board of supervisors to enact. Clearly the Board had the power to enact an ordinance repealing the utility tax or amending the existing ordinance to exempt residential utility users. On its face, therefore, charter section 9.108, subdivision (a) reserves to the people the same power. Respondents' argument that Proposition R cannot be upheld as one authorized under charter section 9.108, subdivision (a) because it is, in fact, a backhanded referendum, lacks merit since Proposition R operates prospectively only. While it was adopted midway in the calendar year, it did not have any impact on the collection of the residential utility tax during the fiscal year in which the Board had implemented the tax. Thus it did not result in an unbalanced current budget. In arguing that use of the initiative in this manner is inconsistent with the exemption of tax measures from the referendum, respondents concede that the question is one of discerning the intent underlying the referendum and initiative provisions of the charter. They focus only on the intent underlying the referendum provision, however, and do not acknowledge the important distinction between suspending the operation of a newly enacted tax measure and the repeal of a tax that is to be effective in a subsequent fiscal year. As we have shown, the use of the charter initiative provision shortly after its adoption in attempts to both enact and repeal taxes confirms that no restriction on the initiative was implied in the referendum provision. The San Francisco Charter contains no bar on use of the initiative to repeal a tax and thus presumably it was intended that it be used for that purpose, and its scope is consistent with the constitutional initiative power. The city and county itself does not contend otherwise and does not contend that the repeal of Proposition R impermissibly interfered with the authority of the Board over, and responsibility for, fiscal management. Proposition R did not suspend operation of a newly enacted ordinance. It was proposed several years after the utility tax ordinance was adopted by the Board and did not affect the current operation of the 1982 ordinance. There is no indication that another tax could not have been imposed to offset the revenue lost by the repeal of the residential utility tax. Therefore, the policy reasons for the limitation on subjecting tax measures to the referendum are not present and there is no basis for inferring that a limitation on use of the initiative to repeal tax ordinances is inherent, although not expressed, in the initiative provision of the San Francisco Charter. [16] Proposition R is not comparable to the proposed initiative ordinance under consideration in Myers, supra, 241 Cal. App.2d 237, 243, in which a Court of Appeal first declared that the initiative power may not be used as a backhanded technique to invoke the referendum process where that process is not available. Instead, Proposition R is a municipal equivalent of the statutory initiatives repealing the state gift and inheritance taxes upheld by the Court of Appeal in Carlson v. Cory, supra, 139 Cal. App.3d 724. There, too, it was argued that the initiative may not be used to circumvent the limitations on the referendum power. The court rejected the argument, noting that nothing in the Constitution prohibited use of the initiative to repeal tax laws. It found the reservation of the initiative power to propose statutes ... and to adopt and reject them found in article II, section 8, subdivision (a), clear and unambiguous. (139 Cal. App.3d at p. 731.) The language of the San Francisco Charter is, if anything, even more clear and unambiguous. Respondents identify nothing in the charter that would have barred adoption of Proposition R had the board not already created a utility tax. Had the San Francisco voters been aware that such a tax was contemplated, their reserved power of the initiative could have been exercised to forestall adoption of the tax. That being so, it is not appropriate to invoke the policy, if in fact such a policy exists (see Birkenfeld v. City of Berkeley, supra, 17 Cal.3d 129, 143), of resolving doubts as to the scope of the initiative power to avoid interference with the legislative body's responsibility for fiscal management. Nor is Proposition R a measure that is beyond the scope of the initiative or referendum because its `inevitable effect would be greatly to impair or wholly destroy the efficacy of some other governmental power, the practical application of which is essential....' ( Simpson v. Hite (1950) 36 Cal.2d 125, 134 [222 P.2d 225].) The impact of Proposition R was to preclude collection of $10 million in residential utility taxes in the fiscal year following its adoption. Appellant asserts that this figure represented only .625 percent of the city's general fund budget of $1.6 billion. [17] Although the Board concluded that the tax was necessary because of the dire financial straights in which San Francisco found itself at the time the residential utility tax was imposed, it does not now argue that when regulation section 707.1 was adopted it had no source of replacement income. It is respondents, not the City and County of San Francisco, who challenge the repeal of the tax and they make no effort to demonstrate that removing the tax on residential utility use from the city's budget substantially impaired the ability of the board of supervisors to carry out its charter responsibilities, including fiscal management. [18] Respondents also fail to identify any basis on which exercise of the initiative power to enact regulation section 707.1 could be found to conflict with other provisions of the San Francisco Charter. We conclude, therefore, that the adoption of regulation section 707.1 by the voters of San Francisco was a permissible exercise of the initiative power.