TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager
1. Subject
title
Consideration of City Council resolutions memorializing the Orange City Council’s position on forthcoming ballot measures in March and November 2024.
body
2. Summary
Resolution Nos. 11523, 11524, and 11525 memorializes the Orange City Council’s position on respective ballot measures scheduled to appear on the March 2024 Presidential Primary Election (Proposition 1) and November 2024 General Election (Assembly Constitutional Amendments 1 and 13).
3. Recommended Action
recommendation
1. Receive and file a presentation on Proposition 1, Assembly Constitutional Amendment 1, and Assembly Constitutional Amendment 13 by Townsend Public Affairs.
2. Consider the adoption of Resolution No. 11523. A Resolution of the City Council of the City of Orange, California, opposing Assembly Constitutional Amendment 1, which will appear on the November 5, 2024, Statewide General Election Ballot.
3. Consider the adoption of Resolution No. 11524. A Resolution of the City Council of the City of Orange, California, opposing Assembly Constitutional Amendment 13 which will appear on the November 5, 2024, Statewide General Election Ballot.
4. Consider the adoption of Resolution No. 11525. A Resolution of the City Council of the City of Orange, California, opposing Proposition 1, Behavioral Health Services Program and Bond Measure, which has been placed on the March 5, 2024, Statewide Presidential Primary Election Ballot.
end
4. Fiscal Impact
None.
5. Strategic Plan Goals
Goal 3: Enhance and Promote Quality of Life in the Community
e. Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services.
6. Discussion and Background
At the January 9, 2024, City Council meeting, it was requested that a position resolution on Proposition 1 be considered. Subsequent to the January 9, 2024, meeting, it was also requested that two position resolutions on Assembly Constitutional Amendments 1 and 13 be considered as well. Provided below are descriptions of each measure.
Assembly Constitutional Amendment 1 - November 5, 2024, General Election:
Currently, the California Constitution requires two-thirds voter approval (66.67%) for local governments to issue general obligation bonds or to levy special taxes. In citing the need for affordable housing and public infrastructure improvements, Assembly Constitutional Amendment 1 would authorize local governments to issue general obligation bonds or levy special taxes at 55% approval. Tax revenues or bond proceeds must be used to fund the acquisition or lease of real property, construction, reconstruction, or rehabilitation of public infrastructure as well as the development of affordable housing or permanent supportive housing for persons at risk of chronic homelessness.
Other provisions include:
• The Legislature may, by majority vote, enact laws for downpayment assistance programs.
• Authorizes the Legislature, by two-thirds vote, to enact additional accountability measures for local agencies utilizing these funding sources.
Assembly Constitutional Amendment 13 - November 5, 2024, General Election:
In response to the Taxpayer Protection and Government Accountability Act (also currently on the November 5, 2024, ballot), Assembly Constitutional Amendment 13 (ACA 13) would require state or local initiative measures seeking to increase voter thresholds for certain measures to pass by the same margin. For example, if an initiative is seeking to increase future voter thresholds from simple majority to two-thirds approval, the measure seeking this increase would need to pass by two-thirds approval.
Lastly, ACA 13 protects the ability of local governments to place advisory questions on a ballot to ask voters their opinions on issues.
Proposition 1 - Behavioral Health Services Program and Bond Measure:
The 2024 California Presidential Primary Election will occur on Tuesday, March 5, 2024. Included on the March 2024 ballot is Proposition 1 - Behavioral Health Services Program and Bond Measure (Proposition 1).
Proposition 1 includes two aspects. First, it alters the 2004 Mental Health Services Act. Second, it proposes a $6.38 billion bond to develop more mental health and drug/alcohol treatment facilities while also funding more housing for individuals struggling with mental health as well as drug and alcohol abuse. Both components are reviewed in turn.
2004 Mental Health Services Act
The Mental Health Services Act (MHSA) was passed by voters in 2004 under Proposition 63. MHSA placed a tax on incomes over $1 million and requires tax revenue be used for mental health services. Of the total tax revenue generated from MHSA (which the Legislative Analyst Office reports to be between $2 billion to $3.5 billion per year), 95% is directed to counties while the remaining 5% is allocated to the state to support mental health services. Although counties are limited in the types of services they can fund with MHSA money, they are afforded deference in how those services are provided.
Proposition 1 changes two components of the 2004 MHSA. First, the state will receive a larger portion of the MHSA tax revenues. As mentioned above, counties currently receive 95% of MHSA tax revenues. Proposition 1 would lower this to 90% which equates to a loss of $140 million annually, according to state Legislative Analyst Office (LAO).
Second, Proposition 1 will require counties to spend more MHSA money on housing and personalized support services (e.g. employment assistance). Although counties are currently authorized to fund these types of services, Proposition 1 would mandate a specific amount, potentially leaving less resources to fund other mental health services.
$6.38 Billion Bond
The proposed bond measure would create more facilities for mental health and drug or alcohol treatment as well as more housing. If approved, the bond proceeds would be dispersed as follows:
• Facilities for Mental Health Care and Drug or Alcohol Treatment - $4.4 billion would go to a state program to build more facilities for mental health care and drug or alcohol treatment. Of the $4.4 billion, $1.5 billion would be set aside for local governments (i.e., cities, counties, and tribal entities).
• Housing - $2 billion to a state program that extends funding to local agencies so they may construct new housing or rehabilitate hotels or other buildings into housing. It should be noted that housing projects funded by this bond would be considered “use by right,” potentially preempting local zoning laws for properties with multifamily residential, office, retail, or parking uses.
If approved, the LAO estimates it will cost $310 million annually for 30 years to repay the bond. The LAO also estimates the bond would build 6,800 places for people to receive mental health care as well as drug or alcohol treatment. Lastly, the LAO estimates this bond would “reduce statewide homelessness by only a small amount.”
7. ATTACHMENTS
• Resolution No. 11523
• Resolution No. 11524
• Resolution No. 11525