Many cities across California are currently considering moving from a general law form of government to a charter government. The primary argument most city leaders cite for “going charter” is that they believe this move will give them the power to block raids on local tax dollars by politicians in Sacramento.
A laudable goal – if only it were true.
A recent report entitled “The Illusion of Autonomy: Why Charter City Status Does Not Protect Local Revenue” has been written by the law firm Olson, Hagel & Fishburn, LLP. They took a look at what protections charters really provide for cities, and they came up very short on any real benefits.
In short, they discovered that charter city status does not provide a city with greater protections against Sacramento taking or redirecting a city’s revenues over city’s operating under general law.
This is surprising considering all of the hype from charter proponents.
After a thorough review of the law, Olson, Hagel & Fishburn determined that there are few differences between how state law treats one type of city compared to another. Proposition 13 eliminated many options available to cities for raising local revenue, and put the state at the center of municipal finance.
Further, the state constitution has several provisions that prevent the state from taking or redirecting local revenues. These provisions do not distinguish between charter and general law cities. Both types of city are equally protected.
Finally, to the extent that the state does have the power to take revenues, both types of cities are equally vulnerable.
Most people would agree that it is perfectly reasonable for cities to want to stop raids on local coffers by the state. As a matter of law, charter cities won’t provide any protection.
In the end, leaders in general law cities should carefully consider what they are really getting by moving to a charter government.
The charter process is expensive, opens the door to lawsuits, and often, the mere process of a charter election can divide a community.
Charter has been presented as a panacea that will help cities solve all of their problems, but as this report demonstrates, it isn’t necessarily as advertised when it comes to protecting local tax dollars.