Westbrook v. Mihaly

Decision Date30 June 1970
Docket NumberS.F. 22706,S
Citation87 Cal.Rptr. 839,2 Cal.3d 765,471 P.2d 487
Parties, 471 P.2d 487 Elouise WESTBROOK et al., Petitioners, v. Emmery MIHALY, as Registrar of Voters, etc., et al., Respondents. Stephen ADAMS, Petitioner, v. Emmery MIHALY, as Registrar of Voters, etc., et al., Respondents. F. 22707.
CourtCalifornia Supreme Court

Joseph L. Alioto, Peter J. Donnici, E. Alioto, Joseph M. Alioto, Stephen Adams, in pro. per., Philip Adams and Adams & Adams, San Francisco, for petitioners.

Paul N. Halvonik, San Francisco, and Charles C. Marson, amici curiae on behalf of petitioners in Nos. 22706 and 22707.

Donald L. Ungar, amicus curiae on behalf of petitioners.

Thomas M. O'Connor, City Atty., and Thomas J. Blanchard, Chief Deputy City Atty., for respondents.

Wilson, Jones, Morton & Lynch, Ernest A. Wilson, San Mateo, Pillsbury, Madison & Sutro, Francis R. Kirkham, Francis N. Marshall and Noble K. Gregory, San Francisco, amici curiae on behalf of respondents.

SULLIVAN, Justice.

We are presented in these cases with a common issue: whether that portion of former article XI, section 18 (present article XIII, section 40) of the California Constitution which requires that general obligation bond proposals of counties, cities and school districts be approved by a two-thirds majority of the voters in a popular referendum violates the equal protection clause of the Fourteenth Amendment to the United States Constitution. The challenged section provides, in relevant part, 'No county, city, town, township, board of education, or school district, shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of twothirds of the qualified electors thereof, voting at an election to be held for that purpose, * * *' 1 Two bond issue proposals were submitted to the voters of San Francisco at a special election held in November 1969. Proposition 'A' sought authorization for the City and County of San Francisco 2 to incur a bonded indebtedness of $9,998,000 for additions to and improvements of its park and recreation system. Proposition 'B' sought authorization for a bonded indebtedness in the amount of $5,000,000 to provide new elementary schools and to modernize existing school facilities in the Hunters Point area of the city. Both propositions received the approval of a majority of the voters but less than the two-thirds required by article XI, section 18. 3

Petitioners in S.F. 22706 are residents of and registered voters in San Francisco. Some of them are property owners; others are parents of children attending public schools in the Hunters Point neighborhood. All voted in favor of both Proposition 'A' and Proposition 'B'. Petitioner in S.F. 22707 is a resident of and registered voter in San Francisco who also voted in favor of both propositions. Respondents in both cases are various officials of the city and county who are charged with certain duties in connection with municipal bond elections. 4 Through their respective attorneys, petitioners demanded of respondents that they certify both propositions as having been approved by the voters and that they take all further steps necessary to offer the bonds for sale. Respondents refused, taking the position that, since neither proposition had received the assent of two-thirds of the voters as required by article XI, section 18, they had no duties to perform in connection therewith other than that of certifying the actual results of the election to the San Francisco Board of Supervisors.

Petitioners then commenced these proceedings contending that the two-thirds vote requirement, by giving to each negative voter twice the voting power of each affirmative voter, substantially diminishes the effect of the votes of all persons who, like petitioners, favor passage of propositions authorizing the incurring of bonded indebtedness. Such 'dilution' of voting power, it is claimed, denies their right to the equal protection of the laws. Invoking our original jurisdiction (Cal.Const., art. VI, § 10), petitioners in each case seek: (1) a declaration that article XI, section 18 of the state Constitution, insofar as it requires a two-thirds rather than a simple mathematical majority to approve the incurring of bonded indebtedness, is invalid under the Fourteenth Amendment to the United States Constitution; and (2) a peremptory writ of mandate commanding respondents to certify that the propositions at issue herein were duly approved and authorized by the qualified voters of the City and County of San Francisco and to proceed with all actions necessary to offer the bonds for sale. We issued alternative writs of mandate. Respondents have made returns thereto by demurrer and answer. (Code Civ.Proc. § 1089; Cal.Rules of Court, rule 56(c).) By issuing the alternative writs we have necessarily determined that there is no adequate remedy in the ordinary course of law and that each case is a proper one for the exercise of our original jurisdiction. (County of Sacramento v. Hickman (1967) 66 Cal.2d 841, 845, 59 Cal.Rptr. 609, 428 P.2d 593; see Cal.Rules of Court, rule 56(a).)

This court has considered the scope and applicability of article XI, section 18 on several occasions since it became a part of our state Constitution in 1879. In this case, however, we face for the first time a challenge to the provision on federal constitutional grounds. When, as here, a state law is claimed to violate the equal protection clause, we must consider 'the facts and circumstances behind the law, the interests which the State claims to be protecting, and the interests of those who are disadvantaged by the classification.' (Fn. omitted.) (Williams v. Rhodes (1968) 393 U.S. 23, 30, 89 S.Ct. 5, 10, 21 L.Ed.2d 24.) We begin with a synopsis of the events leading up to the adoption of the challenged provision.

The California Constitution of 1849 contained no debt limits applicable to cities or other local governmental units. However, it did require that any state indebtedness in excess of $300,000 be approved by a majority of the voters in a statewide referendum (Cal.Const. of 1849, art. VIII) 5 and authorized the state Legislature to organize cities and restrict their powers of '* * * borrowing money, contracting debts, and loaning their credit, so as to prevent abuses. * * *' (Cal.Const. of 1849, art. IV, § 37.) The Legislature, however, exercised this power only sporadically and such restrictions on municipal indebtedness as did exist were contained in the charters of individual cities rather than in general laws. 6 Indeed, state regulation typically took the form of numerous special acts authorizing particular cities to incur specific indebtedness, often in total disregard of the local charter restrictions. 7 In California, as elsewhere, municipal debt increased dramatically. 8

The bubble burst in the 1870's as California followed the rest of the nation into a severe financial depression. Banks collapsed, the securities markets declined, municipalities defaulted on their bonds, businesses closed and trade stagnated. 9 As foreclosures and unemployment mounted, thousands drifted from the farms to the cities vainly seeking work. 10 The general mood was one of disillusionment and anger and the state was swept by radical political movements. It was thus in an atmosphere of economic and political crisis that the delegates to the Constitutional Convention set to work in 1878. 11

A combination of state and local mismanagement, aggravated by the depression, had created widespread concern over excessive municipal indebtedness and the processes of local debt formation. 12 Popular dissatisfaction had begun to focus on the special legislation authorizing local indebtedness since it was felt that this gave undue influence to narrow interest groups seeking public financing of projects from which they would reap disproportionate benefits. The practice was considered to be a major cause of the inordinate mass of debt with which many communities were burdened. 13 It is, therefore, not surprising that when the delegates confronted the problem of regulating municipal indebtedness, one of their solutions was to strip the state Legislature of any role in its creation. This, inter alia, was accomplished by the absolute ban on special legislation contained in article IV, section 25 of the new Constitution. 14

Article XI, section 18, however, provided the principal instrument for the control of local borrowing. It is apparent, from a reading of the section, that one of its purposes was to establish the 'pay as you go' principle as a cardinal rule of municipal finance. Accordingly, the section requires each year's expenditures to be satisfied from the income of that year, thus preventing a gradual year-by-year amassment of liabilities. As a result, the actual cost of municipal government is more closely reflected in the tax rate and the citizens are better able to make informed judgments on the performance of their elected officials. San Francisco Gas Co. v. Brickwedel (1882) 62 Cal. 641, the first case in which this court considered article XI, section 18, mentioned only this 'pay as you go' restriction 15 of the section, which it termed a 'radical change' from previous conditions. This restriction is manifestly distinct from that portion of the section which establishes the percentage of voter approval requisite to authorize indebtedness in excess of current revenues.

It is also apparent that article XI, section 18 was intended to compel local legislative bodies to inform the public of projects necessitating long- term expenditures and to give to the people the ultimate power of approving or rejecting them. However, we have been unable to discover from the records of the Constitutional Convention or from contemporary judicial opinions, why a two-thirds vote requirement, rather than...

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