The Superior Court has issued a tentative ruling upholding the hotel tax increase used to finance the convention center expansion. Here’s a quick breakdown of the ruling for a lay audience:
First of all, Judge Prager’s ruling is not set in stone. A judge issues a tentative ruling on a motion based upon the arguments filed by the parties, and it contains his likely ruling. However, the parties may still attempt to persuade the judge to change his mind at the motion hearing, which in this case is calendared for March 13, 2013, at 10 a.m.
That being said, Judge Prager’s tentative ruling is very well reasoned and logically incorporates the complicated statutory scheme and binding case law into his decision. The primary issue is whether the City is allowed to assess a special tax to finance the convention center expansion through a vote by the hotels, rather than the people of San Diego.
The California Constitution (Article 13A, §4) provides that a city may levy a special tax (“any tax imposed for specific purposes”) by a two-thirds vote of the “qualified electors.” San Diego’s City Charter further states that the Council may levy a tax based upon the vote of “qualified electors” who comprise the affected “area” within the city.
So, what is a “qualified elector”? Government Code section 53326(c) provides that landowners are the electors where the special tax targets the subject non-residential property, according to the state Supreme Court. Municipal Code section 61.2710(a) further provides that the qualified electors of special taxes on hotels “shall in all cases be the Landowners.” Finally, the “home rule” doctrine of the California Constitution (Article 11, §5) grants charter cities like San Diego the power to establish the mechanisms for a special tax election so long as it concerns a “municipal affair,” rather than a “statewide concern.”
Thus, the Court has tentatively concluded that the City of San Diego possesses the legal authority to levy a special tax based upon a vote by the hotel owners, rather than the broader San Diego electorate.
The Court’s tentative ruling (available here) obviously goes into greater detail, and I don’t intend to overly simplify it. However, the media tends to focus on the policy ramifications of judicial rulings rather than the legal arguments and rationales, so I hope this sheds some light on the latter for a lay audience. I haven’t reviewed this case in great detail, but Judge Prager’s analysis seems very persuasive.
Ryan T. Darby practices civil law in San Diego and serves as the president of the San Diego Republican Lawyers.