Citizens for Fair REU Rates v. City of Redding

**270 Article XIII C of the California Constitution 1 prohibits local governments from imposing, increasing, or extending any tax without voter approval. Excepted from the definition of tax is any charge imposed for a service or product that does not exceed the reasonable costs of providing it.

The City of Redding operates an electric utility as a department of its city government. Each year, the city's budget includes a transfer from the utility's enterprise fund to the city's general fund. The transfer is designed to compensate the general fund for the costs of services that other city…