Lawsuit challenges ‘misleading’ language on Benicia charter, tax ballot measures

BENICIA - A group of Benicia residents is challenging two Benicia ballot measures that would change the City Charter and levy a real property transfer tax, arguing that the language is misleading under California election law.

Benicia residents Lawrence Paul Morsen, Harry B. Newhall, Kenneth Adams, Melinda Laudy and Heather and Jeff Graves filed a lawsuit in Solano County Superior Court on July 28. It alleges the city of Benicia used “false, misleading, promotional, and unlawful” language and seeks corrections for the two measures, Measure Y and Measure Z, which are scheduled to go before voters in November. 

The two measures are the city’s second attempt to pass a transfer tax increase after voters rejected two similar measures in 2024. The first measure, to make Benicia a limited charter city, must pass in order to implement the second measure to levy a real property transfer tax. Benicia is currently a general law city which cannot levy real property transfer taxes above the transfer tax cap of $0.55 per $1,000. 

If the measures pass this year, it would apply to residential properties built on or after Jan. 1, 2027. For residential properties built before January 2027, the tax would apply only to properties with a sale value of $2 million or greater. 

City staff say the measures are “aimed at closing structural funding gaps and creating a more sustainable and resilient financial outlook.” 

The City Council approved placing the measures on the ballot on July 21. The next day, the petitioners’ attorney reached out to the city claiming the approved ballot language did not comply with the law and asked for corrections, according to an amended lawsuit. A week later, the petitioners filed their claims in court. 

The city amended the language in the measures in a City Council meeting Aug. 4, but did not discuss the litigation. The agenda report for that meeting noted Aug. 7 was the deadline for the City Clerk to submit resolutions to the Registrar of Voters to place measures on the November 2026 ballot.

However, the plaintiffs filed an amended petition for a writ of mandate on Aug. 6, which said they oppose the city’s revised language for both ballot measures. They said the measures contain “campaign-style  messaging, inaccurate claims, confusing disclosure of tax rates, and misleading  descriptions.” For this reason, they claim the ballot labels violate state elections code because they “mislead voters as to the true character, purpose, and legal effect of the measures.”

The filers point to the label for the city charter measure, finding issue with the statement that it “continues the city’s existing council-manager form of government,” saying it omits that it would confer the new constitutional authority to change the city’s form of government. 

They also disagreed with the transfer tax measure’s claim that it “primarily ensure[s] newly constructed property sales contribute to maintaining city services and infrastructure,” even though it applies broadly to all commercial property sales and residential property sales over a certain amount.

“Despite the August 4 revisions, the ballots approved by the city are not accurate. They  are not impartial,” said Christopher Shenfield, an attorney representing the plaintiffs, in a statement Aug. 6. “Regardless of how anyone feels about these measures, every voter should be able to  trust that the ballot itself is not being used as a campaign tool. Voters deserve a ballot that informs, not promotes.” 

The plaintiffs seek a court order requiring the city to correct the ballots before they are printed. 

City Attorney Ben Stock did not respond to a request for comment before publication. 

City staff noted in an April report that realtors were concerned that the rates proposed in the 2024 ballot measure were high, and said the revised measures have been updated to ensure that residents are insulated from the effects for at least 13 years. 

The city plans to spend $20,000 on informational mailers to residents, according to City Manager Mario Giuliani.

City staff estimates that the transfer tax would generate about $400,000 for the city annually by 2035 and could generate more than $1.6 million annually by 2045, although it would fluctuate from year to year.

Editor's note: This story has been updated to correct the threshold for taxation under the current ballot measure, the amount the city will spend on mailers, and the city's revenue estimates.