San Diego's strategy to levy a tax on hotels in order to pay for the expansion of the convention center not only violates California's state constitution but municipal law as well, ruled the Fourth District Appellate Court yesterday, August 1.
The court overturned Superior Court judge Ronald Prager's earlier decision that allowed hotel owners and not the general public to pass the assessment.
The appeal is considered a blow to some city leaders, who had banked on the tax as a way to pay for a massive expansion of the downtown convention center.
"We conclude that the election was invalid under the California Constitution because such landowners and lessees are neither 'qualified electors' of the City for purposes," reads the ruling. "We further conclude that the election was invalid under the San Diego City Charter because City Charter section 76.1 (section 76.1) requires the approval of two-thirds of the 'qualified electors' ...those persons who are registered to vote in general state elections under state law. Accordingly, we reverse the trial court's judgment validating the special tax and remand the matter to the trial court with directions to enter judgment against the City."
Judges on the appellate court cited Article XIII of the California constitution, which bars local governments from imposing, extending, or increasing "any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote."
Attorneys for the city argued that hotel owners could be considered "qualified electors" and that since the tax did not impact the entire electorate there was no need for a public vote.
That argument, among many others made by the city, didn't fly with the court.
"We are aware of no authority, and the City has cited none, that suggests that the phrase 'qualified electors' has ever been used generically to describe a group of persons entitled to vote based on qualifications other than those specified by our state Constitution….
"In seeking to uphold the special tax election in this case, the City does not provide any argument based on the text of the relevant constitutional provisions, their constitutional histories, or the intent of the voters in enacting these provisions. For the reasons described above, these traditional sources of constitutional interpretation overwhelmingly support the conclusion that the special tax election in this case was invalid because the City's registered voters were not permitted to vote in the election."
The city has been ordered to pay the attorneys' fees for appellants Melvin Shapiro and San Diegans for Open Government. The ruling will now be sent back to judge Ronald Prager for validation.