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Report regarding consideration of positions on Statewide Ballot Measures Proposition 1 and Proposition 43 for the November 3, 2026 General Election (Megan Wooley-Ousdahl, Deputy City Manager)
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RECOMMENDATION
Recommendation
Consider Proposition 1 and Proposition 43 on the November 3, 2026 General Election ballot, and provide direction to staff regarding an official position (support, oppose, or take no position) and the level of effort to be expended regarding sharing the City’s positions.
Body
BACKGROUND
The November statewide ballot includes multiple propositions, including Proposition 1: The Veterans and Affordable Housing Bond Act of 2026, and Proposition 43: Limits Voters’ Ability to Raise Revenues for Local Government Services.
The League of California Cities (Cal Cities) has asked cities to support Proposition 1 and to oppose Proposition 43. Staff is seeking direction from the City Council regarding official positions on these propositions and the level of effort that staff should expend in sharing the City’s positions with the community.
DISCUSSION
Proposition 1
The State uses general obligation bonds to fund various housing programs. Bonds are a way the State borrows money to cover the up-front costs of a development and then repays the money, plus interest, over time.
Proposition 1: The Veterans and Affordable Housing Bond Act of 2026 is a measure placed on the November 3, 2026 ballot by the Legislature that would replenish existing housing programs for the development, preservation, and rehabilitation of affordable housing projects.
Proposition 1 would allow the State to sell $11.25 billion in general obligation bonds for housing purposes. This amount consists of (1) a $10 billion bond for a variety of housing programs that would be repaid by the State’s General Fund and (2) a $1.25 billion bond that would be repaid by veterans’ payments on their home loans.
Arguments in Support
Proponents of Proposition 1 argue that it gives Californians the opportunity to provide housing to families, veterans, people with disabilities, and older adults; helps prevent homelessness by keeping vulnerable persons in their homes; expands homeownership opportunities; and maintains fiscal accountability and transparency without new taxes. They also argue that it would jumpstart the construction of tens of thousands of shovel-ready affordable homes across California.
In addition to funding new affordable housing projects, the measure would fund the rehabilitation and preservation of existing affordable housing, increase funding for homeownership programs, and support specific housing projects - such as student housing, infill development, supportive housing, and foster youth housing.
Arguments in Opposition
Opponents against Proposition 1 have expressed concern that relying on general obligation bonds is an expensive mechanism for funding government programs. They argue that repaying $11.25 billion in bond principal, plus interest, over multiple decades will cost taxpayers significantly more out of the General Fund than direct budget appropriations. Others state that taking on additional long-term general obligation debt limits state fiscal flexibility during future economic downturns and risks competing with other essential infrastructure needs.
Others argue that combining general affordable housing programs with veteran assistance uses veterans’ popular support to pass a much broader spending package, while subsidizing a relatively small fraction of total housing demand. Some opponents argue that government subsidies do not address the underlying issues of why it can be expensive to build housing in California, such as restrictive zoning laws, local development fees, and environmental litigation delays under CEQA.
Cal Cities’ Stance
The League of California Cities supports Proposition 1 and states:
If approved by the voters, Proposition 1 would replenish funding for several successful state programs used by cities to support affordable housing and infrastructure. Proposition 1 could also fund innovative local programs like regional housing trusts and support cities in meeting their Regional Housing Need Assessment (RHNA) goals for current and future cycles.
Alignment with City’s Legislative Platform
The City of South San Francisco’s Legislative Platform includes the following legislative priorities under Housing and Supportive Services which indicates support for Proposition 1.
• 1.a. Support funding and policies that expand affordable, workforce, and supportive housing.
• 1.b. Promote policies and programs that expand the supply of for-sale affordable housing.
• 1.c. Advocate for resources addressing homelessness, including prevention, shelter, and permanent supportive housing.
Proposition 43
Proposition 43: Limits Voters’ Ability to Raise Revenues for Local Government Services is a legislatively proposed constitutional amendment on the November ballot that proposes to change the voter-approval requirements for local special taxes. A special tax is any tax imposed for a specific purpose, versus a general tax which is for general governmental use.
Beginning January 1, 2027, Proposition 43 would require all local special taxes to receive approval from two-thirds of the voters voting on the tax, reversing the current judicial interpretation that permits those measures to pass with a simple majority.
Under current law, the approval threshold for a local special tax depends on how the measure reaches the ballot. A governing-body-sponsored special tax requires two-thirds voter approval, while a voter-initiated special tax may pass with a majority. Proposition 43 would eliminate that distinction by applying the two-thirds threshold to both.
Proposition 43 would amend state constitutional provisions to clarify that local governing bodies and local voters acting via citizen initiative are prohibited from levying any new or additional ad valorem taxes on real property, except for voter-approved bond debt service. Proposition 43 clarifies that the existing constitutional limitation applies to both local governing bodies and local voters acting by initiative.
Arguments in Support
Proponents for Proposition 43 argue that recent court rulings have allowed special interest groups to pass local special taxes with a simple majority (50% + 1) by placing them on the ballot via a voter-led initiative. Proponents find that Proposition 43 restores the original intent of Proposition 13 by requiring a uniform two-thirds supermajority for all local special taxes, regardless of whether they are placed on the ballot by a city council or a voter petition. They also believe that this will ensure that tax increases intended for dedicated, targeted purposes require broad community consensus before taking effect.
Others find that by prohibiting local governments and voter initiatives from imposing new ad valorem real property taxes (except for voter-approved bond debt), the proposition prevents local parcel or property tax additions that increase the cost of living and housing.
Arguments in Opposition
Opponents argue that Proposition 43 restricts the local funding available for critical services. They state that increasing the voter threshold makes it significantly more difficult for local communities to raise dedicated funding for essential services like emergency response, fire protection, local streets, parks, affordable housing, and other capital improvements.
Opponents also state that increasing the threshold empowers the voice of a few; a two-thirds supermajority requirement allows a lower percentage of voters (33.4%) to block local funding measures supported by a majority (up to 66.6%) of the community.
Cal Cities’ Stance
Cal Cities opposes Proposition 43, stating that, if approved, Proposition 43 would make it harder for communities throughout the state to use this longstanding tool [voter-led initiatives] at a time when many cities are struggling with budget deficits.
Alignment with City’s Legislative Platform
The City of South San Francisco’s Legislative Platform includes the following legislative priority under Modern and Sustainable Organization which indicates opposition to Proposition 43.
3.b. Advocate for increased local fiscal autonomy by reforming state-imposed barriers and restrictive thresholds that limit a city’s ability to seek voter-approved revenue measures or set tax rates based on local community needs.
Options
The City Council has three options regarding each proposition:
Option A: Adopt Position of Support - Direct staff to finalize resolutions expressing formal support for Proposition 1 and/or Proposition 43 and transmit support letters.
Option B: Adopt Position of Opposition - Direct staff to finalize resolutions to reflect formal opposition for Proposition 1 and/or Proposition 43 and transmit opposition letters.
Option C: Take No Position (Neutral) - Receive this report without adopting resolutions.
Community Outreach
Staff is requesting direction from the City Council regarding the level of effort that staff should expend in sharing the City’s positions with the community. Under California law, a local agency cannot expend public funds to advocate (support or oppose) a ballot measure once it has qualified for the ballot. However, the City can share objective, factual information about the measure and the City Council’s adopted position within strictly defined legal boundaries.
Options could include sharing information and stating the City’s positions on a City webpage and sharing factual recaps of the City Council’s decision at this meeting on the City’s social media platforms and in the biweekly e-newsletter. Prior to posting, materials will be reviewed by the City Attorney to ensure conformance with California law.
FISCAL IMPACT
Passing resolutions in support of or opposition to, or taking no position, would have no direct fiscal impact on the City’s operating budget.
RELATIONSHIP TO CITY COUNCIL PRIORITIES ACTION PLAN
If passed, Proposition 1 may create funding opportunities that support the affordable housing activities and initiatives identified in the Housing and Supportive Services major focus area.
If passed, Proposition 43 will require two-thirds approval for voter-initiated special taxes. The City Council Priorities Action Plan does not currently identify a voter-initiated special tax; however, the two-thirds voter approval threshold could have implications for future priorities or future locally dedicated revenue sources.
Associated Files
Legistar File 26-2323: Resolution regarding Proposition 1.
Legistar File 26-2324: Resolution regarding Proposition 43.