In 2009, Goddard Claussen/West was retained to pursue an initiative to reform the Sinclair Paint decision – a 1997 California Supreme Court ruling that blurred the line between taxes and fees. After Sinclair, state and local governments imposed an increasing number of charges on taxpayers and businesses simply by labeling them as “fees”, enabling them to pass with a majority vote at the state level and without voter approval at the local level.
Initial research showed that voters were deeply frustrated by the number of fees on everyday goods and services and believed that politicians were disguising taxes as fees to circumvent vote requirements for taxes. GCW worked with the Stop Hidden Taxes committee to draft an initiative that reflected these concerns and that addressed the Sinclair decision – without impacting genuine fees.
GCW managed the successful effort to gather more than 1 million signatures required to put this constitutional amendment before the voters and to conduct the campaign to pass the measure, which became Proposition 26 on the November 2010 ballot.
Nearly every group interested in increased government spending lined up in opposition to the measure – environmental groups, labor unions, local and state politicians. The Yes on 26 campaign fought back with a broad coalition of taxpayers, consumers, and small businesses and a carefully honed message: stop hidden taxes. GCW brought on one of the foremost environmental legal experts in the state to refute the spurious arguments that 26 would undermine California’s landmark environmental protections.
Ultimately, despite hostile press and a vigorous opposition campaign from the spending lobby, Prop 26 passed with 52% of the vote.