A Possible Repeal of Los Angeles's Measure ULA?

Answering questions about the Local Taxpayer Protection Act, a proposed amendment to the California Constitution that would invalidate Measure ULA

A petition for a statewide constitutional amendment to the California Constitution, the Local Taxpayer Protection Act is now being circulated for signatures.¹ If enacted by the voters, it would overturn Los Angeles’s Measure ULA (colloquially but inaccurately known as the “mansion tax”).

Controversial from the outset, Measure ULA passed in 2022 with 57% of the vote despite opposition from both 2022 Los Angeles Mayoral candidates,

Mayor Karen Bass

and Rick Caruso. Measure ULA is currently being litigated but remains in effect pending litigation currently before the California Court of Appeal.

What does Measure ULA do?

Measure ULA charges a sales tax of 4% on the sales of all real property sold in Los Angeles for 5 to 10 million and a sales tax of 5.5% on the sales of all real property sold in Los Angeles for over 10 million.² The name of “Mansion Tax” is a misnomer since it applies to sales of all real property, not just mansions. The proceeds of the tax are for funding homeless housing and providing additional services to the homeless.³

Since its passage in 2022, Measure ULA has negatively impacted the Los Angeles economy, particularly multi-family residential real estate development.⁴ In the wake of the tragic and devastating Palisades Fire, it has compounded the grief and suffering of many displaced Pacific Palisades residents and hindered rebuilding efforts.⁵

Measure ULA falls hardest on the most elderly and least affluent Pacific Palisades residents who lack the resources and ability to rebuild their homes and will be further hindered in their attempt to start over elsewhere.⁶ Both

Mayor Karen Bass

and Rick Caruso have called for Measure ULA’s suspension, at least for Palisades Fire victims.⁷

However, it’s unclear how this would work legally. Cities cannot simply suspend duly enacted ballot initiatives.⁸ Although there is clearly a benevolent purpose here, laws usually have to apply to everyone equally and cannot be suspended for some individuals over others.⁹

But whatever discussion there may be as to how Measure ULA could be suspended, that discussion will become moot if the Local Taxpayer Protection Act is qualified for the ballot and enacted by California’s voters in 2026.

The Local Taxpayer Protection Act would invalidate Measure ULA in two ways:

1. It limits transfer taxes on the sales of real property to the statutory maximum rate that counties and general law cities in California are currently authorized to impose, which is 55 cents for every $500.00 in sales.¹⁰

2. It requires that any special tax, like Measure ULA, receive two-thirds of the vote for passage (something that is already supposed to be the law).

To make sense of what this all means, some background legal information is necessary. In California, all taxes are classified as either “general taxes” or “special taxes”.¹¹

What’s the main difference?

• A “general tax” is “any tax imposed for general governmental purposes.”¹² At the local level, general taxes cannot be passed until submitted to the electorate and approved with a simple majority vote.¹³

• A “special tax” is “any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.”¹⁴ At the local level, special taxes cannot be passed until submitted to the electorate and approved by a two-thirds majority vote.¹⁵

Measure ULA is a special tax because it raises money for a specific purpose - funding homelessness housing and homelessness services. The City of Los Angeles has not argued otherwise in the cases challenging Measure ULA, conceding that Measure ULA is a special tax.

This is important because, among other things, Proposition 13 (1978) enacted Section 4 of Article XIII A of the California Constitution, which provides:

Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district.”¹⁶

Courts previously upheld small transfer taxes imposed upon the sale of property on the ground that they were “general taxes” instead of “special taxes”.¹⁷ However, those decisions are inapplicable here because Measure ULA is a special tax, not a general tax.

While Measure ULA is called a “transfer tax”, its name is meaningless as to what kind of tax it actually is.¹⁸ Measure ULA is clearly a sales or transaction tax on the sale of real property. A taxpayer only pays it upon the sale of real property. Moreover, the amount of the tax, like a sales tax, is determined by the price that it is sold for.

Accordingly, Measure ULA should be constitutionally prohibited.¹⁹

Measure ULA should also fail constitutionally because it received less than the required two-thirds vote. No less than four separate ballot measures over four decades had confirmed that California voters wanted all special taxes to be subject to the two-thirds vote requirement.²⁰

But even if Measure ULA could be imposed as a valid transfer tax, it still should be unconstitutional because it only passed with a majority vote, not the required two-thirds vote.

In addition to Article XIII A of the California Constitution, enacted by Proposition 13 (1978), Article XIII D of the California Constitution, enacted by Proposition 218 (1996) also provides:

No tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except . . . . Any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIII A.²¹

An “agency” includes “any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity.”²² A transfer tax on the sale of property is a tax upon a person as an incident of property ownership, not a fee.²³

These provisions are seemingly straightforward (to anyone who is literate anyway). However, the courts have had a different method of interpretation with a multi-decade back and forth between the courts and the voters.²⁴

Akin to Homer Simpson using a Monkey’s Paw to order a perfect turkey sandwich only to have it come out with dry turkey, there always seems to be some way in which a tax law enacted by the voters seems to have a word or phrase that courts use as a loophole to undercut the provision.²⁵

In 2017, the California Supreme Court created a new loophole in California Cannabis Coalition v. City of Upland.²⁶ There, the Court suggested that special taxes did not need to receive a two-thirds vote when placed on the ballot by individual citizens.²⁷ Instead, a two-thirds vote was only required when the government itself put the special tax on the ballot.²⁸

This decision did not break down in the partisan way one might expect. All four Republican appointed Justices joined the Upland decision. Justice Leondra Kruger and Justice Goodwin Liu, both Democratic appointments, dissented.²⁹

The Upland decision technically did not hold that special taxes could be enacted by a simple majority vote if proposed for the ballot by a citizen’s initiative, it only suggested it as non-binding dicta.³⁰ Nevertheless, the practical result has been a rush of new special taxes placed on the ballot that only require a bare majority of the vote rather than two-thirds of the vote.³¹

This legal rationale of Upland isn’t particularly sound, as Justice Leondra Kruger thoroughly explained.³² As she noted, it contradicts the clear intent of the voters.³³ That’s they key job of the Court.³⁴ And the Court has failed in its job.³⁵

Moreover, although not often discussed outside the realm of tax law, the Upland rationale could be used to take away other rights.

For example, take the recently enacted constitutional amendment protecting individual abortion and contraception rights. It provides:

The state shall not deny or interfere with an individual’s reproductive freedom in their most intimate decisions, which includes their fundamental right to choose to have an abortion and their fundamental right to choose or refuse contraceptives.³⁶

Under Upland’s logic, a local jurisdiction could vote by initiative to ban abortion or contraception and such a vote would not violate this constitutional provision because the language only applies to the state, not the voters.

That might sound far-fetched until you realize that Justice Carol Corrigan (both a stalwart social conservative and pro-government taxation ideologue), who was part of the Upland majority effectively made this same argument in 2008 to dissent against the decision requiring marriage equality under the California Constitution.³⁷

Rather than wait for the courts to figure out the issue, taxpayer advocates are circulating the Local Taxpayer Protection Act to amend the California Constitution.

Here are answers to some commonly asked questions about the Local Taxpayer Protection Act.

1. Is imposing a super majority requirement for passage of ballot measures constitutional under the United States Constitution?

   
   Yes. The United States Supreme Court has long upheld the constitutionality of supermajority requirements for the passage of ballot measures.³⁸
   

2. In 2024, the proposed Taxpayer Protection Act contained a provision that would have restated the two-thirds vote requirement for special taxes. Given that the California Supreme Court removed the Taxpayer Protection Act from the ballot last year as an impermissible revision of the California Constitution, might this constitutional amendment be held to be an impermissible revision as well?
   
   Highly unlikely. In the decision last year, the California Supreme Court was clear that clarifying the two-thirds vote requirement for special taxes would not be an impermissible revision of the California Constitution.³⁹
   

3. Could some form of Measure ULA still be passed in the future if the Local Taxpayer Protection Act is successful?

   
   Yes. The constitutional amendment is retroactive but it allows a two year grace period for jurisdictions to bring their existing taxes into compliance with the new law. This has been part of previously implemented tax reforms.⁴⁰
   

4. How many valid signatures are required to qualify the Local Taxpayer Protection Act for the ballot?

   
   874,642. That number is 8% of the total number of votes cast for Governor in the last gubernatorial election (10,933,018).⁴¹
   

5. How long do proponents of the Local Taxpayer Protection Act have to collect the required number of signatures?
   
   6 months.⁴²
   

6. Why will several hundred thousand additional signatures above the required number likely be needed to qualify the Local Taxpayer Protection Act?
   
   Unlike regular voting where counting the ballot of a validly registered voter is favored over disqualifying the ballot on technicalities, petition signatures do not receive the same deference.
   
   If a voter forgets their registered address (e.g., a wildfire victim doesn’t re-register and puts down their temporary address), that won’t disqualify their ballot if they are otherwise validly registered to vote. It will, however, disqualify their signature on an initiative petition.
   

7. There is a “Declaration of Circulator” section at the bottom of the petition. If you are printing out the Local Taxpayer Protection Act petition at home to sign, do you have to fill this section out too when you sign the petition?

   
   Yes.⁴³
   

8. Can someone who signs the Local Taxpayer Protection Act petition also be the same person who fills out the Declaration of Circulator?

   
   Yes.⁴⁴
   

9. If the Local Taxpayer Protection Act qualifies for the ballot, what percentage of the vote is needed for passage?

   
   A simple majority.⁴⁵
   

10. Who can sign the Local Taxpayer Protection Act petition?

    
    Any validly registered voter in California.⁴⁶
    

11. Who can gather signatures for the Local Taxpayer Protection Act petition?
    

    Anyone who is at least 18 years old.⁴⁷
    

12. Do signers of the Local Taxpayer Protection Act petition need to also fill out their printed name and registered home address in their own handwriting?

    
    Yes. Failure to do so will lead to the disqualification of their signature.⁴⁸

What additional questions do subscribers have about the Local Taxpayer Protection Act and the ballot initiative process? Please let me know in the comments section!

1. The author of this article is an attorney licensed to practice in the State of California and the District of Columbia. This article and all of the works on this Substack page are statements of the opinions of the author, only, and do not constitute legal advice; they are not intended to be relied upon by any individual or entity in any transaction, past, pending, or future. A paid subscription to this Substack page supports the author’s scholarship and provides access to research that the author has compiled, but does not establish an attorney-client relationship. The author does not accept unsolicited requests for legal advice or representation, and this Substack page is not intended as legal advertising. The opinions expressed on this Substack page reflect the personal views of the author only.

2. https://westmount.com/insights/measure-ula-a-new-tax-on-la-real-estate/

3. https://ballotpedia.org/Los_Angeles,_California,_Proposition_ULA,_Tax_on_$5_Million_House_Sales_Initiative_(November_2022)

4. https://escholarship.org/uc/item/9z17p49t

5. https://www.circlingthenews.com/ula-the-mansion-tax-fails-to-deliver-affordable-housing/

6. The Pacific Palisades is (and was) home to some of the city’s wealthiest individuals. However, there is far greater economic diversity in the Pacific Palisades than recognized in much of the coverage of the Palisades Fire and assumptions made about its victims. While the Palisades Fire losses included multi-million dollar mansions, they also included rent-controlled apartments and public housing units. Many of the elderly residents of the Pacific Palisades included many retirees who had worked as civil servants, moved to the neighborhood many decades earlier, and could no longer afford to purchase in the neighborhood today. For a good account of this phenomenon, please read journalist and writer

Peter Kiefer

’s poignant article, My Own Private Palisades: A Writer Remembers His Vanished Neighborhood.

7. https://smmirror.com/2025/03/mayor-bass-considers-pausing-controversial-mansion-tax-to-aid-wildfire-victims/