UKIAH, 4/22/2017 — The case against Mendocino County’s cannabis tax is headed for the court of appeals, after Mendocino Superior Court Judge Jeanine Nadel sustained the county’s request to dismiss the matter, on Friday morning. The timeline for the appeal is unclear.
In February, seven plaintiffs, including dispensary owners, a nursery operator, and long-time cannabis activist Pebbles Trippet, brought a complaint against the county over Measure AI, a cannabis tax initiative that was authored by the Mendocino County Board of Supervisors and which passed 63.6% of the vote. Since the passage of Prop. 218 in 1996, state law has specified that a general tax, which can be used for any purpose, needs only a simple majority to pass, while a special tax, which is to be used for a specific purpose, requires a two-thirds majority. AI was accompanied by Measure AJ, a separate advisory measure asking voters if they wanted the revenue collected under AI to be used for road repair, mental health, cannabis enforcement, and emergency and fire services. The claim was at least partially modeled on a very similar suit filed against the City of Ukiah by an anti-tax political group, the Howard Jarvis Taxpayers Association.
The complaint for declaratory relief, filed by Ukiah attorney Lawrence Rosen, argues that AI is in fact a special tax disguised as a general tax, notwithstanding the advisory measure. In his arguments in court on Friday morning, Rosen went further, citing a 1937 ruling in a case about a tax on laundries that stated, “Clear and hostile discriminations against particular persons and classes cannot be upheld,” and inviting the county to prove that AI qualifies as a tax. He also pointed out that at this time, the county does not know whom to tax, as permits to cultivate cannabis under the county’s new ordinances have not been issued yet.
The judge opened the proceedings on the morning of April 21 by reading her tentative ruling, remarking that “A lot of your argument seems to be focused on whether, even if it is a general tax, it’s not an appropriate tax.”
Rosen replied that, “The point is that if it’s an extra tax against a special community for a special purpose to pay special things that they didn’t cause, that’s a special tax.” Rosen plans to argue the point in the court of appeals.
Deputy County Counsel Christian Curtis delivered a brief argument, saying that if the tax were to be designated as a special tax, the court would have to find that the advisory measure, AJ, was binding. He added that he did not find the 1937 case germane to the court, because that ruling was issued before California’s Prop 13, which amended the California constitution in 1978 by decreasing property taxes and requiring a two-thirds voter majority to approve new taxes.
Rosen argued further that under the provisions of Prop 26, a 2010 amendment to the California constitution which requires a two-thirds majority to pass fees, levies, and charges in addition to taxes, the county should prove that AI is a tax in the first place.
“I completely disagree with your interpretation of Prop 26,” Judge Nadel told him, and declined to change her ruling on the matter. The county had filed a demurrer, which is an argument that there is no legal basis for a lawsuit. Nadel found this argument valid, and sustained the demurrer without leave to amend. The first cannabis taxes are due on May 4, when the county’s medical cannabis cultivation ordinance goes into effect.
Sarah Reith [email protected]