Proposition 13 challenge filed in Calif. Supreme Court

By Kathy Woods and Chris Rizo | Jul 11, 2009

Arnold Schwarzenegger (R)

SAN FRANCISCO (Legal Newsline) --A former University of California, Los Angeles chancellor is challenging the state constitution's requirement that tax increases be approved by two-thirds legislative votes.

The lawsuit from former UCLA Chancellor Charles Young says that when voters passed Proposition 13 in 1978, which slashed property taxes and required a two-thirds vote for tax increases, it marked a revision of state constitution rather than an amendment.

Revisions, a more fundamental change, are to be made only through a constitutional convention.

The lawsuit, filed Friday with the state Supreme Court by the law firm of Akin Gump Strauss Hauer & Feld LLP, was first reported by the Sacramento (Calif.) Bee on Friday.

The suit comes as state lawmakers and Republican Gov. Arnold Schwarzenegger are in budget negotiations over how best to plug a staggering $26.3 billion budget gap.

In legislative sessions past, the Proposition 13 two-thirds requirement has been a barrier to the Democratic-led state Legislature from passing tax increases, at least without minimal support from Republican lawmakers.

This year, like most in the past, lawmakers have been unable to approve a state budget by the start of the new fiscal year, July 1.

As a result of the protracted budget battle, Controller John Chiang is expected to send as much as $3.4 billion worth of IOUs out this month so the state can pay its bills.

The IOUs carry a 3.75 percent interest rate and do not mature until Oct. 2.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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