In Wilde v. City of Dunsmuir, the Supreme Court today holds, “Municipal water rates and other local utility charges may be challenged by other means, but they are not subject to referendum.” The court’s unanimous opinion by Justice Leondra Kruger interprets a state constitutional provision that exempts from the voters’ referendum power “statutes providing for tax levies or appropriations for usual current expenses of the State.” The court concludes that a city’s new water rates were “tax levies” for purposes of the referendum exemption and that the exemption’s reference to “usual current expenses” applied only to “appropriations,” not “tax levies.”
The decision resolves a conflict in opinions by the Third District Court of Appeal. The Supreme Court reverses that appellate court in today’s case. Another, later Third District opinion — in Howard Jarvis Taxpayers Association v. Amador Water Agency, which is a grant-and-hold for Wilde (see here) — should fare better because it came to the same conclusion as the Supreme Court does today. There was one Court of Appeal justice who sat on both cases, and he proposed a way to harmonize the two. After signing the Wilde opinion, he wrote a concurring opinion in Amador Water to distinguish Wilde, but he later dissented from a modification of the Amador Water majority opinion and voted to grant rehearing.
The Supreme Court also disapproves a 1980 opinion of the Second District, Division One.