Cal Cities Board votes on sales tax policy, prepares for the year ahead

By Brian Hendershot, Cal Cities Advocate managing editor

The Cal Cities Board met last week in Berkeley to vote on a proposed sales tax policy, review key legislation, and more.

The Board first took stock of Cal Cities’ strategic advocacy priorities and the wider political environment. With the state staring down a turbulent budget forecast and continued federal uncertainty, member support will be critical to securing success in the Legislature.

The state is focusing heavily on accountability but has not yet provided new money to help cities meet their housing and homelessness goals. Impact fees, factory housing, and energy infrastructure have also emerged as top early issues at the state level.

Cal Cities preemptively responded by meeting early with lawmakers — over 100 meetings in the first few weeks of the year. Cal Cities is also sponsoring around a dozen bills related to housing element reform, disaster preparedness, homelessness, metal theft, road repairs, and more.

Brandon Castillo, one of the state’s leading ballot measure campaign strategists, gave an update on the 2026 ballot measure landscape. In recent years, special interest groups have used ballot measures to leverage legislative action. This year will be no different, with over a dozen measures expected to qualify for the November election. Cal Cities is prepared to mobilize its membership to fight any measures that could harm cities.

Castillo also reviewed the average cost of initiative campaigns, after which staff briefed the Board on plans for CitiPAC, the fundraising mechanism for Cal Cities.

The Board also reviewed Cal Cities’ positions at the federal level, which Cal Cities leadership will discuss with federal representatives during the upcoming Congressional City Conference.

Sales tax policy decision

The Board acted on a set of proposed changes to the allocation of Bradley-Burns sales and use tax revenues generated from e-commerce transactions. The recommendations came from the Revenue and Taxation Policy Committee. The proposal was originally put forth by a working group of city managers, which met over 20 times since 2022.

The Board rejected policy related to:

• A 50/50 split of Bradley-Burns sales tax revenue generated from e-commerce transactions.
• A plus or minus 5% flexibility band.
• Prospective application, excluding revenues from existing sales tax sharing agreements, from any split.
• Five-year phase-in, following state implementation.
• A plus or minus 20% volatility band for reallocating revenues, whereby revenues gained by a city in excess of 20% would be used to mitigate revenue losses greater than 20% for cities negatively impacted by the reallocation of the Bradley-Burns.

The Board directed staff to pursue a statutory change that will enact the following: “County pool use tax dollars from out-of-state e-commerce transactions reallocated from the county pools to destination cities.” In addition, the Board of Directors committed to further studying broader tax reform to increase revenue for all cities.

Western City rebrand and repositioning

Rachel Vincent, senior director of strategic communications and marketing, provided an update on Western City magazine. Originally established in 1899 (then called Pacific Municipalities), the magazine covered up to 11 western states, including California. In 1932, the magazine was renamed Western City. In 1976, it became exclusive to Cal Cities and California.

Western City became a digital publication in 2021 and features a diverse range of voices and stories on the biggest issues facing California’s cities.

Starting this year, staff began the process of rebranding and repositioning the magazine, with the goal of expanding its influence to a wider audience. Staff will work with a group of volunteer board members to ensure that this process aligns with Cal Cities’ mission and vision.

The next board meeting is April 24-25 in Sacramento, after the City Leaders Summit.