Proposition 39 (2000)

Proposition 39 (2000)
Name	Proposition 39 (2000)
Country	United States
State	California
Date	November 7, 2000
Result	Passed
Yes	5,073,064
No	4,141,759
Total	9,214,823

Proposition 39 (2000) was a California ballot measure approved by voters on November 7, 2000, that altered the rules for voter approval of local school district bond issues and adjusted certain tax treatment for multistate businesses. The measure changed a supermajority requirement to a lower threshold for passing bonded indebtedness for K–12 and community college facilities, while also modifying corporate tax allocation methods used by the Franchise Tax Board and the California State Legislature. It combined issues affecting California State Legislature, California Department of Education, and the California Franchise Tax Board with implications for local government financing and tax law administration.

Background and ballot measure

Proposition 39 appeared on the November 2000 ballot amid debates involving the California State Legislature, the Gubernatorial election, 2000 atmosphere, and ballot measure campaigns following the passage of Proposition 13 (1978). Sponsors sought to address tensions between school districts seeking capital funding through bond measures and fiscal conservatives concerned with taxpayer protections embodied in measures championed by figures like Howard Jarvis and organizations such as the Howard Jarvis Taxpayers Association. The initiative process engaged actors including the California Teachers Association, California School Boards Association, and statewide advocacy groups, while drawing attention from media such as the Los Angeles Times and the San Francisco Chronicle.

Provisions and text

The text of the measure lowered the voter approval requirement for local school and community college bond measures from a two-thirds supermajority to 55 percent, applicable to bonds for construction, reconstruction, rehabilitation, or replacement of school facilities, and the acquisition or lease of real property. It required annual performance and financial audits, citizen oversight committees, and a requirement that bond proceeds be used only for specified capital projects, thereby involving entities like the California State Auditor and local county treasurer offices in oversight. Separately, Proposition 39 amended corporate tax allocation methods by changing how multistate businesses compute their share of income apportionable to California, altering provisions administered by the Franchise Tax Board and affecting litigation in forums such as the California Supreme Court and federal United States Tax Court.

Campaign and supporters

Supporters included the California Teachers Association, California School Boards Association, and local school officials across counties such as Los Angeles County, San Diego County, and Santa Clara County. High-profile advocates included school superintendents and elected officials such as members of the California State Assembly and California State Senate who argued that lowering the threshold would facilitate school construction and modernization, citing needs identified by groups like the National School Boards Association and programs modeled after federal initiatives like the No Child Left Behind Act debates. Financial backing came from local bond supporters, education-focused political action committees, and endorsements in outlets including the Sacramento Bee.

Opposition and controversies

Opponents included the Howard Jarvis Taxpayers Association and fiscal conservative elected officials who cautioned that lowering the threshold could lead to increased local debt and higher property taxes. Critics included taxpayer advocacy groups, some local chambers of commerce such as the San Francisco Chamber of Commerce, and editorial positions in the Orange County Register. Controversies centered on the corporate tax allocation provisions, which drew scrutiny from business organizations like the California Chamber of Commerce and multinational corporations represented by law firms that litigate before the Ninth Circuit Court of Appeals. Opponents raised concerns linking the measure to broader debates involving Proposition 13 (1978) and fiscal restraint campaigns led by figures like Paul Gann.

Implementation and effects

After passage, numerous school districts across Los Angeles Unified School District, San Diego Unified School District, and San Francisco Unified School District placed bond measures before voters under the new 55 percent rule, enabling capital projects financed through general obligation bonds. Implementation required creation of independent citizen oversight committees and annual audits in accordance with requirements similar to practices in districts overseen by the California Department of Education. The corporate tax allocation changes influenced filings with the Franchise Tax Board and adjustment of compliance practices among multistate firms headquartered in jurisdictions such as Silicon Valley and Orange County, leading to shifts in tax strategies often litigated in courts including the California Courts of Appeal.

Legal challenges and litigation

Proposition 39 prompted litigation addressing both the bond approval threshold and the tax allocation provisions. Cases reached the California Supreme Court and federal courts over statutory interpretation and administrative implementation by the Franchise Tax Board. Litigants included school districts, taxpayer associations, corporations, and state officials; some disputes involved constitutional claims invoking the California Constitution and statutory preemption arguments that appeared before trial courts and appellate panels in forums such as the United States District Court for the Northern District of California. Court rulings clarified aspects of fiscal oversight, the scope of citizen oversight committees, and the mechanics of multistate tax apportionment under California law.

Category:California ballot propositions Category:2000 California ballot propositions Category:Education finance in the United States