City Loses Lawsuit Over Early Sales Tax Hike

Sacramento Superior Court Rules Measure A Must Be Implemented Exactly as Voters Approved.
[Editor Note: Scroll to the end of this story to see the city's response to the ruling.]

On Friday, Nov. 7, Sacramento Superior Court Judge Stephen Acquisto ruled against the City of Long Beach’s attempt to impose the Measure A sales tax increase two years early. The decision represents a major legal victory for the Long Beach Reform Coalition (LBRC) and a taxpayer savings of roughly $48 million over the disputed period.

The Ruling

Judge Acquisto’s order leaves no ambiguity: “The City’s Ordinance… to the extent that it increased the TUT to 1% prior to October 1, 2027 without voter approval violates the constitutional prohibition on tax increases without voter approval.”

The court found that Measure A’s language “must not be higher than .75% until October 1, 2027,” and that the city’s argument “would require the court to disregard the dates specified in the measure as to render them meaningless.”

What the Case Was About

Measure A, passed by Long Beach voters in 2020, scheduled the city’s local transactions and use tax (TUT) increase to take effect in October 2027. But in December 2024, the City Council – on the advice of City Attorney Dawn McIntosh – approved an “emergency ordinance” to start collecting the full 1% rate by April 2025. The LBRC sued in February 2025, arguing the move violated Proposition 218, the 1996 constitutional amendment requiring voter approval of any local tax increase.

What the State Told the City

Court records reveal that before the City Council’s vote, the California Department of Tax and Fee Administration (CDTFA) had already warned City Hall the early increase would be unconstitutional.

In a Jan. 7, 2025 letter, the CDTFA reminded the city that:

• No local government may impose or increase a general tax without voter approval (Cal. Const., Art. XIII C § 2(b)).
• Voter-approved tax measures must be implemented according to their stated schedule.
• Measure A’s own language clearly set the .75% rate through 2027, and the CDTFA had no authority to collect a higher rate before that time.

Despite this explicit notice, the city proceeded with its emergency ordinance and later filed its own lawsuit against the CDTFA seeking to compel early implementation.

Experts in municipal law say California courts have shown little patience for creative interpretations of Proposition 218, the constitutional measure that requires voter approval for most local taxes. Court rulings over the past two decades have made one thing clear: cities must stick to the exact terms voters authorize.

The League of California Cities has repeatedly cautioned local officials that altering tax timelines, rates, or revenue uses without going back to the ballot can invite lawsuits and judicial pushback. While hard data on the most common violations are scarce, legal analysts agree that deviations from voter-approved terms remain a frequent flashpoint in local finance disputes.

In Long Beach’s case, the ruling not only protects taxpayers from unauthorized taxation but also raises larger questions about how City Hall communicates risk and legal guidance before acting on major fiscal policy.

The Beachcomber has sent related inquiries to Mayor Rex Richardson, City Council members, City Manager Tom Modica, and City Attorney Dawn McIntosh seeking comment on the court’s decision and the CDTFA warnings referenced in the ruling. Responses will be included in follow-up reporting on this story

Stephen Downing is a resident of Long Beach and a retired LAPD deputy chief.

CLICK HERE TO SEE THE OFFICIAL STATEMENT FROM THE CITY MANAGER REGARDING THE SUPERIOR COURT RULING