Interpreting Proposition 13 and its initiative progeny, the Supreme Court in Citizens for Fair REU Rates v. City of Redding today concludes state constitutional provisions do not require voters to approve two financial actions by a city and its electric utility. The court’s unanimous opinion by Justice Carol Corrigan concludes that a transfer from the utility’s enterprise fund to the city’s general fund is not a tax subject to a vote and that a rate increase for utility customers is also not a vote-required tax because the rate is a charge imposed for a service or product that does not exceed the reasonable costs of providing it.
The court reverses a divided Third District Court of Appeal.