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Contact: Eva Spiegel, (916) 658-8228
Oct. 14, 2013


League of California Cities’ Statement on Governor Brown’s Signing of SB 7 (Steinberg)

Sacramento, CA During the just-completed legislative session Senate Bill 7 sparked debate about whether “prevailing wage” should be paid on public works projects that charter cities finance with purely local funds. For the League of California Cities, whose charter city members have different local policies on the subject, this was never the principal issue. The most critical question raised by SB 7 was and still is whether the legislation undermines the constitutional powers that California voters more than 100 years ago conferred on charter cities and their voters alone. 
The California Supreme Court made it clear last year that the state may not mandate charter cities to comply with prevailing wage requirements in awarding public works contracts that are funded without the use of state funds. (State Building and Construction Trades Council of California, AFL-CIO v. City of Vista (2012) 54 Cal.4th 547.) The Court said such decisions are “municipal affairs” and are subject only to the decisions of charter city voters and not the Legislature.
Further, it is also clear from a court decision in the Governor’s second term that the state may not circumvent charter city authority indirectly by requiring cities to surrender this constitutionally guaranteed autonomy in the award of public works contracts funded exclusively by a city in order to continue receiving state funds. (Sonoma County Organization of Public Employees v. County of Sonoma (1979) 23 Cal.3d 296, 316–317 [“SCOPE”].)
State leaders are clearly sensitive to these types of concerns, having just filed a lawsuit a week ago in the federal district court challenging a recent decision by the United States Department of Labor to deny transit funding to California based on certain provisions of the recently enacted Public Employees Pension Reform Act of 2013. 
At various points in its federal complaint, the state of California correctly characterized the federal action as “arbitrary, capricious, and unconstitutional,” as presenting “California with a Hobson’s choice — change its pension reform legislation or forgo more than $1 billion of federal transit funds,” as having “undermined the independent fiscal and legislative sovereignty of California and interfered with California’s exercise of its police powers and prerogative to legislate for the benefit of its citizens in a field Congress has expressly left to state regulation.”
The League understands the Governor’s objections to the federal action and supports his efforts to have them declared unconstitutional. Furthermore, the state’s arguments against the federal action in its lawsuit virtually mirror the constitutional flaws in SB 7 under California’s constitution. Article XI, section 5(a) of the California Constitution grants broad home rule authority to those cities whose citizens have voted in favor of becoming a charter city.
Under that state constitutional grant of authority, SB 7 “unconstitutionally impair[s] the fiscal and legislative sovereignty” of charter cities, by “coercing” those cities through the threat of withholding state funding to change their laws. This type of action is no more lawful or justified when done by the state than when done by the federal government. 
The nation’s second President, John Adams (1735–1826), is credited with the famous statement that we should build governments “of laws and not of men.” California history is replete with examples, some cited in this statement, in which its Supreme Court has been called on to ensure respect for the state constitution’s limits on the powers of the state over charter cities. It appears it may have this opportunity yet again. In the future the League will be prepared to assist any city in defending its voter approved and constitutionally protected charter from being undermined by SB 7.

Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials.
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