2026 California Proposition 43

Proposition 43 (2026)

November 3, 2026

Restoration Two-Thirds Vote Requirement for Local Initiative Special Taxes Amendment

Proposition 43 is a proposed legislative constitutional amendment on the November 3, 2026, ballot in California.

Beginning on January 1, 2027, Proposition 43 would restore the two-thirds voter approval requirement to impose, extend, or increase a local special tax under Proposition 13 for any proposed special tax that qualifies for the ballot under the local initiative power. Proposition 43 would also prohibit local governments, including under the local initiative power, from imposing additional ad valorem taxes on real property (taxes based on the assessed value of property), except as otherwise allowed under the California Constitution.

Proposition 43 closes the 2017 court-created Upland loophole that has allowed politicians and groups supporting tax increases to evade the two-thirds voter approval requirement for local special taxes under Proposition 13 by qualifying tax increase measures using the local initiative power.

The practical effect of Proposition 43 is to make it harder to raise some local special taxes (such as sales taxes and parcel taxes) as a special tax proposed under the local initiative power would once again be subject to the same two-thirds voter approval requirement as a special tax proposed by the governing body of a local government (such as a city council or a county board of supervisors), as had been California law for decades under Proposition 13 before the 2017 Upland decision.

Proposition 43 was placed on the ballot by legislative referral with bipartisan support from both Democrats and Republicans in the California State Legislature by a 68–2 vote in the California State Assembly and by a 35–1 vote in the California State Senate.

Background

On three previous occasions, California voters approved the two-thirds voter approval requirement for all local special taxes when they adopted the Proposition 13 constitutional amendment in 1978, the Proposition 62 statutory initiative in 1986, and the Proposition 218 (“Right to Vote on Taxes Act”) constitutional amendment in 1996.

In 1987, a California appellate court in the Altadena Library case held that the two-thirds voter approval requirement for local special taxes under Proposition 13 applied to a local initiative special tax increase proposed by the electorate under the local initiative power. The Altadena Library case was later cited with approval by the California Supreme Court in a 1995 case upholding the statutory voter approval requirements for local taxes under Proposition 62 (a 1986 taxpayer protection initiative measure), including the two-thirds voter approval requirement for local special taxes. The law in California had been clear for decades that local special tax initiatives were subject to the two-thirds voter approval requirement under Proposition 13.

2017 Upland case

In the 2017 Upland case relating to Proposition 218 (“Right to Vote on Taxes Act”—a constitutional follow-up to Proposition 13), a divided California Supreme Court created a distinction between taxes proposed by the governing body of a local government and taxes proposed under the local initiative power for purposes of applying the voter approval requirements under constitutional taxpayer protection laws such as Proposition 13.

Local special taxes placed on the ballot by a local governing body such as a city council or a county board of supervisors are already subject to two-thirds voter approval under Proposition 13. However, as a result of the Upland case, local special taxes qualifying for the ballot under the initiative power are no longer subject to the two-thirds voter approval requirement under taxpayer protection laws such as Propositions 13 and 218.

The Upland decision was controversial and had an extensive dissenting opinion written by Justice Leondra Kruger and joined by Justice Goodwin Liu, both of whom were appointed by former Democratic Governor Jerry Brown.

For special tax measures that qualify under the local initiative power, the Upland case had the resulting effect of taking away from voters their constitutional right to vote on local special taxes under Proposition 13, a right that was previously upheld in the 1987 Altadena Library case. The primary purpose of Proposition 43 is to restore that constitutional right to vote on all local special taxes under Proposition 13, including local special taxes proposed under the initiative power.

Exploitation of the court-created Upland loophole has resulted in many local special tax increases being imposed without two-thirds voter approval under Proposition 13. This includes the controversial Measure ULA (2022) “mansion tax” in Los Angeles and many local sales tax and parcel tax increases that would have not been approved and imposed in the absence of the court-created Upland loophole.

Restoration constitutional amendment closing the Upland loophole

In response to the local special tax increases imposed without two-thirds voter approval due to the court-created Upland loophole, an initiative constitutional amendment known as the “Local Taxpayer Protection Act to Save Proposition 13” was filed and later obtained sufficient signatures to appear on the November 2026 statewide ballot in California.

The “Local Taxpayer Protection Act to Save Proposition 13” initiative contained several integrated components that included: (1) closing the court-created Upland loophole; (2) significantly limiting the ability of local governments to impose real property transfer taxes like the Measure ULA "mansion tax" in Los Angeles; (3) ending existing initiative parcel taxes enacted without two-thirds voter approval under the court-created Upland loophole; and (4) ending existing real property transfer taxes levied in charter cities, including the Measure ULA “mansion tax” in Los Angeles.

Proposition 43 compromise

Ultimately, a bipartisan compromise was reached that resulted in the “Local Taxpayer Protection Act to Save Proposition 13” initiative being withdrawn from the ballot by the initiative proponent in favor of a more limited proposed constitutional amendment (ACA 22) that was placed on the ballot by the California Legislature and became known as Proposition 43.

Under the Proposition 43 bipartisan compromise, only the closure of the court-created Upland loophole will appear on the November 2026 ballot for California voters to decide. Other components of the “Local Taxpayer Protection Act to Save Proposition 13” initiative would not appear on the November 2026 ballot, including the limitations on real property transfer taxes and the provisions ending any already existing local taxes which included the Measure ULA “mansion tax” in Los Angeles. In exchange for withdrawing the “Local Taxpayer Protection Act to Save Proposition 13” initiative, the Legislature also agreed to remove another proposed constitutional amendment from the ballot (ACA 13) that would have made taxpayer protection constitutional amendments containing supermajority vote requirements much harder for California voters to approve.