Bad Bill Watchdog — Greater Laguna Beach GOP

…& Legislative Update

February, 2026

How is Sacramento spending our tax dollars this month? Let’s sniff out the ways…

Compiled by Jennifer Zeiter

1. SAVE PROP 13 – LOCAL TAXPAYER PROTECTION ACT.LIMITS ABILITY OF VOTERS TO RAISE REVENUES FOR LOCAL GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT. Would require a 2/3 vote of registered voters vs. simple 50% majority to raise local taxes. Carl DeMaio reports sufficient signatures were collected to get this on November’s ballot, but still waiting for confirmation from SOS on signature verifications. This initiative would also overturn all existing voter-approved property-related taxes, including real estate sales and transfer taxes, that do not comply with these requirements two years after the measure is enacted.

What does this Act do?

(1) It reverses the court-created loophole in the 2/3rds vote requirement that has allowed special interest groups to easily impose their own tax hikes using the local initiative process.

(2) Will restore Prop. 13’s ban on real estate transfer taxes that steal the equity of homeowners when they sell their property.

Case in Point: You’ve heard about the City of Los Angeles’ infamous ULA tax. Measure ULA (“United to House LA”), commonly known as the “mansion tax,” is a Los Angeles city tax on high-value real estate transactions that took effect on April 1, 2023. It imposed a 4% tax on property sales between $5 million and $10 million, and 5.5% on sales over $10 million, in addition to existing transfer taxes. Revenue generated by ULA is earmarked for affordable housing development and tenant assistance programs. It is backfiring as the ULA included not only single family residential but also multi-tenant and commercial properties. As a result owners are not selling to avoid the ULA tax, resulting in less tax revenues for LA.

The ULA tax contained both evils the Local Taxpayer Protection Act will correct: First, the levy was a special tax – imposed for a specific purpose – which should have required a two-thirds vote of the local electorate. Second, the levy was a massive increase in local real estate transfer taxes which, under the plain language of Proposition 13, are expressly prohibited.

2. Fix Prop 19 - REPEALS VOTER-ENACTED CHANGES TO PROPERTY TAX RULES FOR TRANSFERS BETWEEN FAMILY MEMBERS. INITIATIVE CONSTITUTIONAL AMENDMENT.‍ ‍

Reinstates property tax reassessment exemptions for certain real property transfers between family members (including by inheritance), which voters eliminated through Proposition 19 in 2020 by being fooled with the 55 and over carryover of property tax basis for residential property. Allows transfers to children (or grandchildren if parents are deceased) without property tax reassessment of: (1) principal residence, regardless of its current value or continued use as principal residence; and (2) $1 million in other real property.

Uncertain, but not likely, this Act will qualify in time for the November ballot.

3. CALIFORNIA CONSIDERS ENDING PROPERTY TAXES FOR HOMEOWNERS 60 AND OLDER.

A newly cleared California ballot proposal would exempt homeowners age 60 and older from paying property taxes on their primary residence if voters approve it. The measure’s proponent, Rishi Kumar, says it is designed to ease financial pressure on seniors and prevent housing loss, requiring homeowners to have lived in their home for at least 5years or in California for 10. County officials and fiscal experts warn the proposal could significantly impact local budgets. The California State Association of Counties says property taxes are the largest source of revenue for counties and public schools, while the Legislative Analyst’s Office estimates the measure could reduce local revenue by $12 to $20 billion annually, with losses increasing over time. Supporters dispute those projections, arguing seniors would reinvest savings into local communities. Kumar must collect nearly 875,000 signatures by August 4 to qualify the initiative for the November 2026 ballot.

4. WE LOST ON PROP 50 - US Supreme Court (SCOTUS) handed down the disappointing ruling to allow Prop 50 to stand meaning California will have rigged Congressional maps this year. Good news is other states (Republican) are adjusting their maps too. Tis the season of gerrymandering.

5. BULLET TRAIN TO NOWHERE - After 17 years and $17 billion, a single railhead has been completed in Kern County. The entire LA to SF train was supposed to be finished by 2020. Original cost $30Million, now projected to be $135Million, plus. Fortunately, CA congressman Kevin Kiley’s bill to cut off all federal funding has been signed into law by President Trump. Not coincidentally, as federal efforts are ramped up to identity waste and fraud, Newsom is now pushing a bill to keep records of the project secret. But of course…….

6. MILEAGE TAX - VEHICLE-MILES-TRAVELED TAX OR VMT. Sacramento is floating a new VMT tax that would tax you for every mile you drive, both gas and electric! For two-car families, it is estimated that it will cost your family a minimum of $4,000/ year in extra taxes. Businesses could expect to pay much more. Currently, CA has the highest gas taxes in America at the pump, over 70 cents per gallon in state taxes. On top of that, we pay a federal excise tax, a low carbon fuel tax, plus local taxes, over $1.30 in taxes for every gallon of gas we pump. Winning??

7. A WIN AT SCOTUS. BOST V. ILLINOIS BD. OF ELECTIONS. The litigated issue was whether a candidate for office has standing to challenge the rules that govern the counting of votes in his or her election. SCOTUS ruled YES. Candidates for office have Article III standing to challenge the rules that govern the counting of votes in their election. This enables candidates to challenge election integrity – Thanks to Tom Fitton/Judicial Watch.

8. WARNING SIGNS: FOUR CALIFORNIA CITIES ARE FACING FISCAL CRISES IN 2026. In December, a Reason Foundation study found “California’s state and local pension plans have over $265 billion in debt.” The so-called “California rule,” more a legal doctrine upheld by the courts than a law, largely forbids reductions in promised benefits, with taxpayers on the hook. And the per-resident liability is more than $6,000.

Here are four cities from non-Silicon Valley areas facing fiscal crises right now.

Los Angeles, population 3.9 million. The Daily Journal reported on November 24, “Mounting wildfire liabilities, sexual-assault settlements, revenue losses and soaring legal payouts have intensified concerns that Los Angeles, L.A. County or Santa Monica could face insolvency and contemplate the once-unthinkable step of Chapter 9 bankruptcy.” All just in time for this summer’s FIFA World Cup 26 and the 2028 Olympics.

Santa Monica, population 91,000. The city’s ACFR for the fiscal year ending June 20, 2024 showed a negative UNP of $52.7 million, or $597 owed per capita. Although less than for some other cities, in his introduction Director of Finance/City Treasurer Oscar Santiago warned, “While the long-term economic outlook is positive, resources remain constrained in the short-term. The city continues to experience significant cost increases coming from the highest levels of inflation in 40 years and other market disruptions occurring as a result of global conflicts.”

Orange, population 138,000. Located in prosperous Orange County, the city of Orange ought to enjoy an overflowing budget. But the Voice of OC warned last July 30, “Orange City Council members received a stark warning from their accounting consultants last week: they’ll be facing bankruptcy in three years if they don’t increase sales tax, cut 12% of their general fund and bring new businesses into the city.”

Vacaville, population 104,000. The San Francisco Chronicle reported January 12, “To balance its last fiscal-year budget, Vacaville needed to dip into reserves and freeze hiring. Its five-year financial forecast currently projects an annual deficit of roughly $9 million.” Its ACFR for the fiscal year ending July 30, 2024 showed a negative UNP of $114.6 million, or $1,102 owed per capita.

Laguna Beach, population 23,500. While not on the list so far, Laguna City Council is projecting a budget deficit and is posed to potentially put on the ballot in November two tax measures, one increasing the sales tax (currently 7.75%) and one increasing the TOT (temporary occupancy or bed tax), and then follow it up with a $20Million bond issuance. Laguna has a spending problem and needs to cut costs and vanity projects, not raise taxes.

9. SCOTUS TARRIFS RULING. The Supreme Court, 6-3, ruled against President Trump holding that the International Emergency Economic Powers Act (IEEPA) of 1977 does not authorize the President to impose broad tariffs. SCOTUS held that IEEPA’s power to "regulate... importation" in response to an "unusual and extraordinary threat" does not cover the imposition of such tariffs. Essentially, Trump chose the wrong law to impose the tariffs. SCOTUS could have broadened its ruling by acknowledging the President has authority under other laws to impose tariffs without Congress and uphold the tariffs on those grounds, but instead it choose to narrowly rule on this case acknowledging only the powers under the IEEPA. That was a political judgement call that easily could have gone the other way. Honest jurists could rule either way. National security is certainly involved with international trade, and tariffs can be used to stop mayhem that might harm America. But not to fear. President Trump has already announced 15 percent tariffs across the board, which he legally can do under trade law Section 122. The President has the right to regulate trade, including tariffs under that law (among others).

10. GOOD NEWS ON TAX RETURNS. IRS data shows that the average tax refund is 11% higher — an average increase of about $1,000 per filer — than last year at this time due to the Working Families Tax Cuts Act passed by President Trump. Let’s end on that WIN!

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