Full opinion text
Opinion BAXTER, J. We are asked to decide whether, under a city charter which prohibits referenda on tax ordinances, but which grants to the electorate the power to adopt any legislation that the board of supervisors may enact, the initiative power may be used to prospectively repeal a tax ordinance and to prevent adoption by the board of supervisors of any future ordinance imposing a similar tax. The Court of Appeal held that use of the initiative power to repeal a tax and to bar future adoption of a tax had the same effect as a referendum on a tax ordinance and thus was prohibited. We disagree. The rule on which the Court of Appeal relied, one based on dicta in prior cases, fails to take into account the plain language of the constitutional and charter provisions in which the people have reserved the powers of initiative and referendum. While the referendum provisions expressly preclude a referendum on statutes and ordinances which impose a tax, no such limitation is imposed on the people’s exercise of their reserved initiative power. The language of the constitutional and charter provisions in issue is clear. The initiative provisions, unlike the referendum provisions, do not except measures imposing a tax from the initiative power. In the absence of any ambiguity there is no need to look beyond the words of these documents to ascertain their meaning. As we shall explain, however, that history which is available supports our conclusion that the San Francisco ordinance which is the object of this proceeding was within the power of the people to adopt by initiative. That history confirms that the power of the people to control taxation was among the principal benefits of the initiative anticipated by its supporters. Because the Court of Appeal erred in equating the initiative power with the referendum power and imposing on the initiative power a limitation not found in the language of the constitutional initiative provision or the San Francisco Charter, we shall reverse the decision of the Court of Appeal. I Background In 1982 the Board of Supervisors of the City and County of San Francisco (the Board) enacted an ordinance which exempted residential utility users from a utility tax that had been imposed earlier on the use of electricity, gas, water, steam, and telephone service. The ordinance also provided, however, that in succeeding years the tax would be imposed again unless the Board voted to exempt residential users by September 15 of the previous year. When the Board reversed an earlier decision to exempt residential users for 1987, an initiative petition seeking to prospectively repeal the tax on residential users qualified for the ballot and was adopted at a November 1987 election. The initiative (Proposition R) added section 707.1 to the revenue/business regulations of the city. (Section 707.1.) Section 707.1 provided: “(a) No tax shall be levied upon the use ... by residential customers of telephone communication services, electrical energy or gas, water or steam which is delivered through mains or pipes or of any other utility service after June 30, 1988. “(c) This Section was adopted by the voters of [the city] at the November 3,1987 election and may be amended only by the vote of the electorate.” When appellant tax collector stopped collecting the tax after June 30, 1988, respondents, taxpayers Leo Rossi and Guiliano Darbe, filed this action, a petition for writ of mandate, by which they sought to compel appellant to resume collecting the utility tax from residential users. The superior court issued a peremptory writ of mandate granting the requested relief and tax collector appealed. The Court of Appeal affirmed the judgment. This court granted appellant’s petition for review. II The Initiative Power This case arises because both the Charter of the City and County of San Francisco and section 9 of article II of the California Constitution exclude tax measures from the referendum power of the voters. There is no express exclusion of tax measures from the initiative, however. Because the role of the court is to apply a statute or constitutional provision according to its terms, not to read into it exceptions or qualifications that are not supported by the language of the provision (Vallerga v. Dept. Alcoholic Bev. Control (1959) 53 Cal.2d 313, 318 [1 Cal.Rptr. 494, 347 P.2d 909]), we begin with what appears to be the plain language of the constitutional and charter provisions which govern exercise of the initiative power in the City and County of San Francisco. Where the language is clear, it should be followed. (Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 38 [283 Cal.Rptr. 584, 812 P.2d 931].) These constitutional and charter provisions must be construed liberally in favor of the people’s right to exercise the reserved powers of initiative and referendum. The initiative and referendum are not rights “granted the people, but . . . power[s] reserved by them. Declaring it ‘the duty of the courts to jealously guard this right of the people’ [citation], the courts have described the initiative and referendum as articulating ‘one of the most precious rights of our democratic process’ [citation]. ‘[I]t has long been our judicial policy to apply a liberal construction to this power wherever it is challenged in order that the right not be improperly annulled. If doubts can reasonably be resolved in favor of the use of this reserve power, courts will preserve it.’ ” (Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591 [135 Cal.Rptr. 41, 557 P.2d 473], fn. omitted; see also Brosnahan v. Brown (1982) 32 Cal.3d 236, 241 [186 Cal.Rptr. 30, 651 P.2d 274].) We examine the constitutional and charter initiative provisions with these principles in mind. Article II, section 8 of the Constitution creates the statewide initiative power. It provides in pertinent part: “(a) The initiative is the power of the electors to propose statutes and amendments to the Constitution and to adopt or reject them. “(b) An initiative measure may be proposed by presenting to the Secretary of State a petition that sets forth the text of the proposed statute or amendment to the Constitution and is certified to have been signed by electors equal in number to 5 percent in the case of a statute, and 8 percent in the case of an amendment to the Constitution, of the votes for all candidates for Governor at the last gubernatorial election. The only express constitutional limitations on the people’s exercise of the statewide initiative power are those in sections 8 and 12 of article II. Section 8, subdivision (d) of article II bars initiative measures “embracing more than one subject,” and section 12 of that article bars constitutional amendments and statutes which “name[] any individual to hold any office, or name[] or identif[y] any private corporation to perform any function or to have any power or duty . . . .” Nothing in the constitutional reservation of the initiative power expressly precludes exercise of the initiative to repeal a tax measure. The local initiative power may be even broader than the initiative power reserved in the Constitution. (Hopping v. Council of City of Richmond (1915) 170 Cal. 605 [150 P. 977]; Spencer v. City of Alhambra (1941) 44 Cal.App.2d 75, 78 [111 P.2d 910].) In Spencer, the power of the voters to establish by initiative the minimum salaries for policemen was in issue. The city charter gave to the city commission the authority to establish those salaries, but in a separate provision the voters had reserved a very broad initiative power. “ ‘The qualified electors of the city shall have power through the initiative or otherwise, as provided by this chapter and the general laws of the state, to enact appropriate legislation to carry out and enforce any of the general powers of the city or any of the specified powers of the commission.’ ” (44 Cal.App.2d at p. 78, italics omitted.) That reservation, the court held, overrode the commission’s power. “When ... the people phrased the foregoing sections pertaining to those powers in such broad, general and unambiguous language, the conclusion seems inevitable that thereby it was intended that legislation on every municipal subject should, unless expressly or by clear and necessary implication excluded by other sections, be subject to initiative actions through the adoption of ordinances by the people. After all, the people through their charter have a right to vest in the voters of the city the right and power to deal through initiative action with any matter within the realm of local affairs or municipal business, whether strictly legislative or not, as that term is generally used (Hopping v. City of Richmond, 170 Cal. 605 [150 Pac. 977]); and ... the consensus of authority is to the effect that the fixing of salaries of public officers is a legislative function.” (Spencer v. City of Alhambra, supra, 44 Cal.App.2d 75, 78-79.) “[T]he charter. . . has reserved to the electors the broadest possible powers in the matter of initiative legislation; powers so extensive as to permit adoption by the voters of any ordinance the commission might enact ... as well as to carry out and enforce any of the general powers of the city or any of the specified powers of the commission.” (Id. at p. 80; see also Kugler v. Yocum (1968) 69 Cal.2d 371, 374 [71 Cal.Rptr. 687, 445 P.2d 303].) The reserved initiative power of the San Francisco electorate is also extremely broad. Section 9.108, subdivision (a) of the charter provides: “The registered voters shall have the power to propose by petition, and to adopt or to reject at the polls, any ordinance, act or other measure which is within the power conferred upon the board of supervisors to enact, or any legislative act which is within the power conferred upon any other board, commission or officer to adopt, or any amendment to the charter.” (Italics added.) Thus it appears that under the plain language of charter section 9.108, subdivision (a), the voters of the City and County of San Francisco had the power to add section 707.1 to the revenue/business regulations of the city. III The Referendum Power The referendum, by contrast, applies only to newly enacted legislation and is subject to express constitutional limitations, among which is the exemption of tax measures from referendum. When a referendum petition qualifies, the newly enacted measure does not become effective and may not be implemented until it is approved by the voters. (Assembly v. Deukmejian (1982) 30 Cal.3d 638, 654-657 [180 Cal.Rptr. 297, 639 P.2d 939].) Both the Constitution and the San Francisco Charter exempt legislation imposing taxes from the power of referendum. Article II, section 9, subdivision (a) of our Constitution provides: “The referendum is the power of the electors to approve or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State.” (Italics added.) The constitutional provisions which address local government, found in article XI, do not deal with the local referendum power other than to provide that where the governing body of a county prescribes compensation for its members by ordinance, the ordinance is subject to the referendum. (Const., art. XI, § 1, subd. (b).) The restrictions found in article II, section 9, are applicable to local referenda, however, except to the extent that charter cities are exempted. (Geiger v. Board of Supervisors (1957) 48 Cal.2d 832, 836-837 [313 P.2d 545]; but see Rider v. County of San Diego (1991) 1 Cal.4th 1, 22 [2 Cal.Rptr.2d 490, 820 P.2d 1000] (conc. opn. of George, J.).) As is true of the local initiative power, a charter may reserve a broader referendum power to the voters. “ ‘The constitutional reservation goes to the full extent expressed by its language. If the charter differs from the constitution in any respect it does not thereby diminish the powers reserved by the constitution. On the other hand, if the powers reserved by the charter exceed those reserved in the constitution the effect of the charter would be to give to the people the additional powers there described.’ [Citations.] In other words, as between the provisions of the Constitution and the provisions of a city charter, those which reserve the greater or more extensive referendum power in the people will govern.” (Hunt v. Mayor & Council of Riverside (1948) 31 Cal.2d 619, 622-623 [191 P.2d 426].) Like the Constitution, the San Francisco Charter prohibits exercise of the referendum power over tax and appropriation measures. Section 9.108 of the charter provides: “Annual budget and appropriation ordinances, supplemental appropriation ordinances, the annual salary ordinance, or ordinances amending the same, the ordinances levying taxes, . . . shall not be subject to referendum.” Both the charter and the Constitution, therefore, preclude referenda on tax measures. The Court of Appeal reasoned that use of the initiative power to repeal a tax measure was the equivalent of subjecting the ordinance imposing the tax to referendum, an impermissible use of the referendum. The tax collector argues that the court erred in that conclusion, and in relying on dicta in prior decisions which reached the same conclusion. We agree. IV The Initiative and Taxation As we have noted above, the history of the constitutional initiative provision makes it clear that the limitation on the referendum power, which excludes tax-related matters, does not extend to the use of the initiative to repeal taxes prospectively. When the statewide initiative power was added to the Constitution in 1911 as part of newly adopted article IV, section 1, taxation was not only a permitted subject for the initiative, but was an intended object of that power. The history of the measure, which confirms this intent, is found in contemporary understanding of article IV, section 1, and statements made by the drafter and leading proponent of the initiative and referendum measures, Dr. John Haynes, who had earlier been successful in causing those powers to be added to several city and county charters. The contemporary understanding is reflected in unsuccessful attempts made in 1917 to amend the initiative provision to exclude measures related to taxation, an amendment that would have been unnecessary if tax-related measures were not permissible subjects of the initiative. When that failed, unsuccessful attempts were made in 1919, 1920, and 1922, to increase the required signatures for tax-related initiative measures to a level that would have made qualification of such petitions next to impossible. Again, those efforts would have been unnecessary if the initiative could not be used to enact and repeal tax legislation. The subject matter of initiative measures was not addressed in the ballot pamphlet for Senate Constitutional Amendment No. 22, the initiative/referendum measure proposed in 1911. Statements made by Dr. Haynes and the Direct Legislation League, which he founded, about the purpose of the initiative are particularly instructive, however, because Dr. Haynes and the Direct Legislation League had persuaded the Legislature to propose the 1911 constitutional amendment. (Key & Crouch, The Initiative and Referendum in Cal., supra, pp. 429-440.) The secretary of the league was one of the three persons, the others being members of the Senate and Assembly, who revised the draft of Senate Constitutional Amendment No. 22 prior to introduction in either house. The original draft had been drawn up by a committee appointed by the Chairman of the Republican State Platform Committee. (Hichbom, Story of the Session of the Cal. Legislature of 1911 (1911) p. 95.) The 1917 measure (Senate Constitutional Amendment No. 12) proposed to bar use of the initiative as well as the referendum for tax and assessment legislation. The amendment would have provided that neither could “be used to enact or annul any law providing any method of assessment, or for the levy of any tax in this State.” Senate Constitutional Amendment No. 12 was introduced in response to a failed single tax initiative that would have amended article XIII of the Constitution to limit taxation to that assessed on land values, and would have repealed existing tax authority and all taxes imposed pursuant to the existing authority. (Key & Crouch, The Initiative and Referendum in Cal., supra, pp. 557-558.) The Direct Legislation League stated in a letter to the sponsor of Senate Constitutional Amendment No. 12 that the measure “takes away from the people the most important right of self-government which they possess, namely: the power of control over taxation. This strikes at the very root of popular self-government. Practically all historic struggles for liberty, including the English Revolution, the French Revolution and our own American Revolution, have centered about the question of the people’s control over taxation.” (Hichbom, Story of the Session of the Cal. Legislature of 1921 (1922) p. 189, fn. 145, italics added.) In 1919, Senate Constitutional Amendment No. 5 was introduced in the Legislature in an attempt to limit use of the initiative for tax measures by increasing the number of signatures necessary to qualify an initiative petition from 8 percent to 25 percent of the voters. Dr. Haynes said in opposition: “Again, if they can destroy the people’s use of the initiative in the most important function, taxation, it will be the beginning of efforts which will lead to the destruction of the entire initiative power of the people.” The bill failed in the Legislature. (Hichbom, Story of the Session of the Cal. Legislature of 1921, supra, at p. 190, italics added.) After the Legislature defeated the proposal to place Senate Constitutional Amendment No. 5 on the ballot in 1919, the measure was placed on the ballot as an initiative constitutional amendment in 1920 and defeated. The League to Protect the Initiative was formed by Dr. Haynes at that time as a reorganization of the Direct Legislation League. Its aim was “ ‘to defeat the proposed amendment to the initiative law which seeks to destroy the power of the people to initiate laws pertaining to the assessment and collection of taxes’” (Hichbom, Story of the Session of the Cal. Legislature of 1921, supra, at p. 201.) A majority of the 30 votes in Alpine County favored the proposal. The measure was defeated in all other counties. A subsequent attempt to increase the number of signatures required to qualify an initiative petition to 15 percent failed in 1922. The League to Protect the Initiative issued a pamphlet at that time stating that with the increase “only powerful organizations and interests could use the initiative in questions relating to the assessment or collection of taxes . . . .” (The Initiative and Referendum in Danger! (League to Protect the Initiative, pamp. 1922) p. 1, italics added.) Dr. Haynes said then that the purpose of the measure (Proposition 7) was the desire of the proponents “to get sole control of taxation” by making it “impossible for the people as a whole to secure that number of signatures.” (Tallinn, Direct Democracy (1977) p. 41, italics added.) Both the efforts to amend the initiative provision of the Constitution to exclude matters related to taxation and those to make it more difficult to use the initiative in tax matters reflect the understanding of the Legislature and the proponents of the initiative at the time of its adoption that there is no restriction on the use of the initiative in the area of taxation. The electorate could use the initiative process to prospectively adopt or annul (repeal) statutes imposing taxes notwithstanding the limitation on the use of the referendum power to reject statutes imposing taxes. The San Francisco Charter provision in issue in this case, which is broader than the 1898 version, was added to the charter in 1911 (Stats. 1911, Cone, and Joint Res., ch. 25, pp. 1670-1679) by the same Legislature which put the statewide initiative, referendum, and recall measures on the ballot. Since the local power may not be restricted to less than that constitutionally authorized, the Legislature presumably intended that the San Francisco Charter also authorize use of the initiative to repeal a tax ordinance. To understand why neither the Constitution nor the San Francisco Charter includes an exemption for tax measures in the provisions governing the initiative, while the referendum provisions do exempt tax measures, an understanding of the impact of the referendum on governmental operation, and how the initiative differs, is essential. The constitutional and charter exemptions from the referendum (statutes and ordinances calling elections, levying taxes, appropriating funds for current expenses, and other “urgency” measures) are measures having special urgency, a delay in the implementation of which could disrupt essential governmental operations. County ordinances fixing the amount of money to be raised by taxes and those fixing the tax rate therefore go into effect immediately, while the effective date of other ordinances is delayed. (Elec. Code, §§ 9141-9143.) When a referendum petition qualifies prior to the effective date of a county ordinance, the ordinance is suspended pending reconsideration and repeal of the ordinance by the board of supervisors or submission of the measure to the voters at a regular or special election. The ordinance does not become effective unless and until a majority of the voters approves it at the referendum election. (Elec. Code, §§ 9144, 9145.) Therefore, if a tax measure were subject to referendum, the county’s ability to adopt a balanced budget and raise funds for current operating expenses through taxation would be delayed and might be impossible. As a result, the county would be unable to comply with the law or to provide essential services to residents of the county. For that reason, when taxes levied to support essential governmental services arguably are involved in a referendum, the general rule requiring that referendum provisions be liberally construed to uphold the power is inapplicable. “If essential governmental functions would be seriously impaired by the referendum process, the courts, in construing the applicable constitutional and statutory provisions, will assume that no such result was intended. [Citations.] One of the reasons, if not the chief reason, why the Constitution excepts from the referendum power acts of the Legislature providing for tax levies or appropriations for the usual current expenses of the state is to prevent disruption of its operations by interference with the administration of its fiscal powers and policies.” (Geiger v. Board of Supervisors, supra, 48 Cal.2d at pp. 839-840.) We concluded in Geiger, supra, that the same reasoning applied to referenda directed to acts of a county board of supervisors. Managing the county government’s financial affairs, we reasoned, was entrusted to elected representatives, and was an essential function of the board which could not accurately estimate income if tax ordinances were subject to referenda. (48 Cal.2d at p. 840.) An initiative has no immediate impact, however. Passage of an initiative which repeals an existing tax will rarely affect the current budgetary process of a local government. The San Francisco regulation in dispute expressly did not do so. Moreover, local officials have ample notice of the potential impact of an initiative long before the measure can become effective. An initiative is proposed by petition submitted to the board of supervisors (Elec. Code, § 9102), but notice of an intent to circulate the petition for signature must be published before it may be circulated. (Elec. Code, § 9105, subd. (b).) The petition must qualify by gathering the required signatures within 180 days after the receipt of the title and summary. (Elec. Code, § 9110.) Within 30 days of filing the petition, if the petition is found sufficient, the election’s official certifies the result to the board at its next meeting (Elec. Code, §§ 9114, 9115), at which time the supervisors must either pass the proposed ordinance as provided or place the ordinance on the ballot at a special election or the next statewide election. (Elec. Code, §§ 9116-9118.) Even those initiatives that qualify for a special election may not actually be voted on for as long as four, and in some cases six, months after the proposed ordinance is presented to the supervisors. (Elec. Code, § 9117.) Therefore, the potential for disruption of local government services by qualification of a referendum petition on a newly enacted tax measure is not present in the procedures leading to possible passage of an initiative which prospectively repeals an existing tax. Moreover, as we held in Hunt v. Mayor & Council of Riverside, supra, 31 Cal.2d 619, 622-623, a city charter may not restrict the broad power of initiative and referendum granted by the Constitution. The history of the statewide initiative confirms that it was the intent of the electorate that the initiative be used to repeal a tax. In the most recent case to consider the use of the statewide initiative power to repeal a tax, Carlson v. Cory (1983) 139 Cal.App.3d 724, 731 [189 Cal.Rptr. 185], the court affirmed the people’s power. In Carlson, the validity of initiative statutes which repealed the state’s inheritance and gift tax laws was challenged on the ground that the measures interfered with the Legislature’s power over taxation, a power that was claimed to be supreme. The Court of Appeal rejected that argument, holding that there was no constitutional limitation on the people’s exercise of the initiative and this power was greater than that of the Legislature. “This reservation of power by the people is, in the sense that it gives them the final legislative word, a limitation upon the power of the Legislature.” (Id., at p. 728.) The constitutional grant of authority to the Legislature to pass laws regarding taxation of property did not, the Court of Appeal held, limit the people’s plenary power of initiative, and that power may be used to repeal a tax. That conclusion is consistent with the history of the statewide initiative. Inasmuch as the statewide initiative may be used to repeal a tax, initiative power granted by the San Francisco charter may be no less. (Hunt v. Mayor & Council of Riverside, supra, 31 Cal.2d 619, 622-623.) And, as we have shown, the initiative power granted in the charter is at least as broad as the statewide initiative power. The parties agree that the Board has the power to repeal the residential utility tax. Even though the Board has the power to repeal the tax, and the electors of San Francisco reserved to themselves the power to enact any legislation within the authority of the Board, the Court of Appeal held in this case that local taxes may not be repealed by a local initiative measure. Notwithstanding the great difference in impact between a referendum on a newly passed tax ordinance and an initiative tax repeal, the court held that the power of the initiative does not extend to the conducting of what it believed amounts to a referendum on a tax previously imposed by a local legislative body. The court reasoned that neither initiative nor referendum may curtail a local legislative body’s power of taxation. Relying on a line of decisions stemming from Myers v. City Council of Pismo Beach (1966) 241 Cal.App.2d 237 [50 Cal.Rptr. 402] (Myers), the Court of Appeal concluded that this is a “settled rule.” V The “Myers Rule” Appellant contends that Myers and subsequent decisions on which the court also relied, City of Atascadero v. Daly (1982) 135 Cal.App.3d 466 [185 Cal.Rptr. 228]; Gibbs v. City of Napa (1976) 59 Cal.App.3d 148 [130 Cal.Rptr. 382]; Campen v. Greiner (1971) 15 Cal.App.3d 836 [93 Cal.Rptr. 525]; and Dare v. Lakeport City Council (1970) 12 Cal.App.3d 864 [91 Cal.Rptr. 124], do not support the broad rule stated by the Court of Appeal. We agree both because the history of the state and local initiative and referendum powers reflects an understanding and intent that legislation not subject to referendum may be repealed by initiative and because the decisions which suggest that the initiative may never be used to repeal a tax, statute, or ordinance do so for the most part only in dicta. Whether the rule invoked by the Court of Appeal here—that an initiative may not be used to legislate in areas where the voters have no right to the referendum—is sound is a question of first impression in this court. The rule, which finds its origin in Myers, has been applied in several subsequent cases. As the Court of Appeal noted in Carlson v. Cory, supra, 139 Cal.App.3d 724, 731, however, “[t]his [Myers] ‘rule,’. . . has never been approved by our Supreme Court, and in almost all of the above-cited cases, was merely dictum. We read those cases, not for the proposition [that the initiative may not be used where the referendum process is not available], but for the settled rule that neither the initiative nor the referendum may be used in a manner which interferes with a local legislative body’s responsibility for fiscal management.” Myers dealt with an attempt to compel the city council of a general law city to adopt or, if it declined to do so, to call a special election on, an initiative ordinance which if adopted would have barred enactment by the city council of a room occupancy tax. The city council refused to enact the proposed ordinance or call an election in the matter. Instead it proceeded to enact an ordinance imposing such a tax. Because the ordinance proposed in the initiative petition would have expressly repealed any existing ordinance which conflicted with its provisions, adoption of the initiative would have repealed the room occupancy tax ordinance. The Court of Appeal held that the proposed ordinance was not a proper subject for the initiative. Recognizing that municipal corporations have only the taxing power conferred on them by the Constitution or statute, the Court of Appeal emphasized that, as a general law city, Pismo Beach derived its power to tax from the state Constitution which at that time granted the Legislature the power to vest municipalities with authority to assess and collect taxes for municipal purposes. The Legislature had exercised that authority by conferring on “the legislative body” of cities and counties the power to levy a room occupancy tax. (Gov. Code, former § 51030; see now Rev. & Tax. Code, § 7280.) That being so, the legislative body could neither delegate, nor permit the electorate to usurp, that taxing power. (241 Cal.App.2d at p. 242.) In dictum unsupported by authority, the Myers court then said: “A proposed initiative ordinance cannot be used as an indirect or backhanded technique to invoke the referendum process against a tax ordinance of a general law city . . . .” (Myers, supra, 241 Cal.App.2d 237, 243.) The court made it clear in Myers that its holding was one limited to a general law city in which the Legislature had vested authority over taxation exclusively in the legislative body and in which the initiative power may not exceed that reserved in the Constitution. (241 Cal.App.2d at pp. 243-244.) Subsequent decisions have extended the reasoning of Myers to charter cities, however, without recognizing the distinctions between the initiative and referendum powers. Those decisions which suggest that any initiative tax repeal is simply a “backhand” referendum fail to acknowledge that the immediate impact on current revenues occasioned by a referendum is absent when an initiative repeals a tax, or that a specific legislative grant of authority to tax in a general law city was in issue in Myers. In so doing they have overlooked the source of the authority to tax for municipal purposes which, in a charter city, is derived from the home rule provisions of article XI, section 5, subdivision (a) (Weekes v. City of Oakland (1978) 21 Cal.3d 386, 392 [146 Cal.Rptr. 558, 579 P.2d 449]), and has no restriction comparable to the statute on which the Myers court relied. In only one of the cases which cites the Myers rule was a restriction on the initiative power arguably justified and that is because the initiative sought to accomplish the repeal of an ordinance where there would be an impact on funding the current expenses of the city government. Campen v. Greiner, supra, 15 Cal.App.3d 836, like the instant case, did involve a charter city and an initiative attempt to both repeal a residential utility tax and bar any fiiture imposition of such a tax. The tax which had been imposed by the City Council of San Jose was for the stated purpose of providing revenue for the usual and current expenses of the city. After the city council placed the initiative measure on the ballot, the Court of Appeal granted a petition for writ of mandate compelling the city clerk to remove the measure. The San Jose City Charter provided only that “[t]he powers of initiative, referendum and recall of elected municipal officers are hereby reserved to the electors of the City.” The Court of Appeal cited Myers in holding that an initiative may not be used as a “backhand” referendum where the referendum is not available. The basis for decision was that repeal by initiative of a tax ordinance during the fiscal year for which it was to provide current revenue would conflict with provisions of the city charter which imposed fiscal responsibility for municipal affairs on the city council. Those provisions, which provided for adoption of an annual budget based on a complete financial plan for operation of the city, required a plan for sources of income as well as expenditures. The budget could be adopted only after a public hearing, and when adopted was followed by an appropriation ordinance which took effect immediately. An initiative repealing that tax ordinance would necessarily invalidate or modify the budget, and would, therefore, conflict with the charter provisions governing the budgetary process. The court acknowledged that the people could limit the taxing power or expand the power of initiative and referendum as related to the taxing power, but held that the power granted the city council to manage the city could not be limited or impaired by repeal of a tax that had been levied for current general purposes. (Campen v. Greiner, supra, 15 Cal.App.3d at p. 843.) The other cases relied on by the Court of Appeal here are all distinguishable. In some the actual basis for decision was that the power sought to be exercised by the voters in the initiative measure was one expressly delegated and limited to the governing body of the city. The earliest of the post-Myers' decisions relied on by the Court of Appeal, Dare v. Lakeport City Council, supra, 12 Cal.App.3d 864, did not involve a charter city or repeal of a tax. The disputed initiative would have amended a city ordinance to fix the maintenance fees charged users for operation of the municipal sewage system. The court cited the Myers rule in dictum. The holding, however, was that the initiative was not available to amend the ordinance in question because the Legislature had vested the local legislative body with the power to fix those fees. (12 Cal.App.3d at p. 869.) Gibbs v. City of Napa, supra, 59 Cal.App.3d 148, relied on the Myers rule, but did so in a wholly different context. There, a proposed initiative would have barred expansion of a planned urban redevelopment area and declared that once that project was completed there was no further need for the local redevelopment agency to continue to function. The Court of Appeal held that because adopting redevelopment plans was an executive, not a legislative, function of the council, the adoption of a plan was not subject to referendum. Therefore, an initiative could not be used to block the plan. Although the court cited the Myers rule, the decision actually turned on the fact that the initiative sought to intrude into what was then described as an administrative, rather than the legislative, sphere. An alternate ground of decision, moreover, was that in redevelopment matters the council functioned as an administrative arm of the state, and thus its actions were beyond the reach of both the local initiative and the referendum power. (59 Cal.App.3d 148, 154.) Any doubts with respect to the right of the people to adopt legislation governing taxes through the initiative process should have been laid to rest by the decisions of this court in Kennedy Wholesale, Inc. v. State Bd. of Equalization, supra, 53 Cal.3d 245, and of the Court of Appeal in Carlson v. Cory, supra, 139 Cal.App.3d 724. In Kennedy Wholesale, Inc. v. State Bd. of Equalization, supra, 53 Cal.3d 245, we upheld an initiative statute increasing the tax on tobacco products. We rejected a claim that an initiative statute was subject to the requirement imposed by section 3 of article XIII A of the Constitution that taxes imposed for the purpose of increasing revenue be passed by a vote of two-thirds of the members of each house of the Legislature. We reasoned that this could not have been the intent of the electorate which adopted article XIII A, an initiative constitutional amendment, since the Constitution itself could have been amended to achieve the same result by a simple majority vote. It would make no sense therefore to conclude that the people intended to limit their power of initiative in the manner suggested. As Justice Mosk noted there, “if a tax increase is permissible through the initiative process, a tax decrease would also be upheld." (53 Cal.3d at p. 256 (conc. opn. of Mosk, J.).) We conclude therefore that the Myers dicta to the effect that the initiative may never be used to accomplish repeal of an ordinance that may not be subjected to referendum is not sound and should not have been relied on by the Court of Appeal here. The Court of Appeal also relied on a more recent series of cases decided subsequent to Carlson v. Cory, supra, 139 Cal.App.3d 724, 731. Those decisions, the Court of Appeal concluded, establish a rule barring use of the local initiative power in a manner which interferes with the responsibility of the local legislative body for fiscal management, a responsibility which reposes control over taxation solely in the legislative body. None of those cases is comparable to this one, however, since none involved an initiative repeal of a tax ordinance that is prospective only, i.e., would not affect the current budget of the city or county. City of Atascadero v. Daly, supra, 135 Cal.App.3d 466, relying on Myers, held invalid a proposed initiative which, by defining “special taxes” to encompass a variety of revenue raising measures, would have required that any revenue-raising measure be approved by the voters before being implemented. It was invalid, the court held, because it interfered with the city council’s authority over taxation. Again, however, a rejection of the tax by the voters would have been immediate, and would not be postponed to the next budgetary cycle as is the case here. Community Health Assn. v. Board of Supervisors (1983) 146 Cal.App.3d 990 [194 Cal.Rptr. 557], addressed a challenge to an initiative measure that would have limited the ability of a county board of supervisors to impose license and permit fees, charges, and assessments within the county. The court found the initiative ordinance indistinguishable from that invalidated by the court in City of Atascadero v. Daly, supra, 135 Cal.App.3d 466. The same is true of Fenton v. City of Delano (1984) 162 Cal.App.3d 400 [208 Cal.Rptr. 486]. In Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 143 [130 Cal.Rptr. 465, 550 P.2d 1001], we recognized that prior decisions reflected a policy of resolving doubts as to the scope of initiatives and referenda to avoid interference with the legislative body’s responsibility for fiscal management, but also cautioned that speculative consequences of an initiative ordinance on the local tax base do not establish such interference. (Id., at pp. 143-144.) Therefore, it cannot be assumed that every initiative which repeals a tax will impermissibly interfere with fiscal management. An initiative may do so if the repeal eliminates a major revenue source and no other revenue source is available that may be tapped to offset a resulting budget deficit or to avoid future deficits. As appellant notes, Proposition R, the San Francisco initiative, was not to take effect immediately and did not eliminate a current revenue source. The current budget was not affected, and the record does not support a conclusion that the initiative had a substantial impact on the ability of the Board to manage the fiscal affairs of the City and County of San Francisco in subsequent years. That Board has not entered this case or opposed in any way appellant tax collector’s efforts to uphold the voters repeal of the residential utility tax. We agree with appellant, therefore, that the Court of Appeal erred in relying on cases in which an attempt was made to use the initiative to repeal tax ordinances of general law cities and those in which the proposed measure would affect the authority of the legislative body over fiscal management under a budget already adopted by that body. An initiative which repeals taxes prospectively, i.e., one in which the repeal does not become effective until a subsequent fiscal year, is not the “functional equivalent” of a referendum. Our obligation to jealously guard the people’s reserved right of initiative precludes the restriction on its exercise suggested by the Myers court and adopted here by the Court of Appeal. VI The Charter of the City and County of San Francisco Because our prior decisions do not establish the invalidity of Proposition R, we must consider whether any provision of the San Francisco Charter precludes exercise of the initiative power in this manner. For the reasons stated above, it is clear that section 9.108 of the charter, which provides that ordinances levying taxes are not subject to the referendum, does not do so. In construing the San Francisco Charter we begin with the established principle that all reasonable doubts must be resolved in favor of the people’s exercise of the reserved initiative power. (Brosnahan v. Brown, supra, 32 Cal.3d 236, 241.) We have consistently recognized that the initiative power must be construed liberally so as to promote the democratic process established by inclusion of the initiative and referendum in the Constitution. (See Legislature v. Eu (1991) 54 Cal.3d 492, 501 [286 Cal.Rptr. 283, 816 P.2d 1309]; Raven v. Deukmejian (1990) 52 Cal.3d 336, 341 [276 Cal.Rptr. 326, 801 P.2d 1077]; Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 219 [149 Cal.Rptr. 239, 583 P.2d 1281]; Associated Home Builders etc., Inc. v. City of Livermores, supra, 18 Cal.3d 582, 591; San Diego Bldg. Contractors Assn. v. City Council (1974) 13 Cal.3d 205, 210, fn. 3 [118 Cal.Rptr. 146, 529 P.2d 570, 72 A.L.R.3d 973].) “[A]ll presumptions favor the validity of initiative measures and mere doubts as to validity are insufficient; such measures must be upheld unless their unconstitutionality clearly, positively, and unmistakably appears.” (Legislature v. Eu, supra, 54 Cal.3d 492, 501.) That obligation is no less weighty when the exercise of the power of initiative reserved in a city charter is challenged. (Birkenfeld v. City of Berkeley, supra, 17 Cal.3d 129, 147.) As we have noted above, the initiative power reserved under the San Francisco Charter is extremely broad. Section 9.108, subdivision (a) of the charter reserves to the people the “power to propose by petition, and to adopt or to reject at the polls, any ordinance, act or other measure which is within the power conferred upon the board of supervisors to enact.” Clearly the Board had the power to enact an ordinance repealing the utility tax or amending the existing ordinance to exempt residential utility users. On its face, therefore, charter section 9.108, subdivision (a) reserves to the people the same power. Respondents’ argument that Proposition R cannot be upheld as one authorized under charter section 9.108, subdivision (a) because it is, in fact, a “backhanded referendum,” lacks merit since Proposition R operates prospectively only. While it was adopted midway in the calendar year, it did not have any impact on the collection of the residential utility tax during the fiscal year in which the Board had implemented the tax. Thus it did not result in an unbalanced current budget. In arguing that use of the initiative in this manner is inconsistent with the exemption of tax measures from the referendum, respondents concede that the question is one of discerning the intent underlying the referendum and initiative provisions of the charter. They focus only on the intent underlying the referendum provision, however, and do not acknowledge the important distinction between suspending the operation of a newly enacted tax measure and the repeal of a tax that is to be effective in a subsequent fiscal year. As we have shown, the use of the charter initiative provision shortly after its adoption in attempts to both enact and repeal taxes confirms that no restriction on the initiative was implied in the referendum provision. The San Francisco Charter contains no bar on use of the initiative to repeal a tax and thus presumably it was intended that it be used for that purpose, and its scope is consistent with the constitutional initiative power. The city and county itself does not contend otherwise and does not contend that the repeal of Proposition R impermissibly interfered with the authority of the Board over, and responsibility for, fiscal management. Proposition R did not suspend operation of a newly enacted ordinance. It was proposed several years after the utility tax ordinance was adopted by the Board and did not affect the current operation of the 1982 ordinance. There is no indication that another tax could not have been imposed to offset the revenue lost by the repeal of the residential utility tax. Therefore, the policy reasons for the limitation on subjecting tax measures to the referendum are not present and there is no basis for inferring that a limitation on use of the initiative to repeal tax ordinances is inherent, although not expressed, in the initiative provision of the San Francisco Charter. Proposition R is not comparable to the proposed initiative ordinance under consideration in Myers, supra, 241 Cal.App.2d 237, 243, in which a Court of Appeal first declared that the initiative power may not be used as a “backhanded technique to invoke the referendum process” where that process is not available. Instead, Proposition R is a municipal equivalent of the statutory initiatives repealing the state gift and inheritance taxes upheld by the Court of Appeal in Carlson v. Cory, supra, 139 Cal.App.3d 724. There, too, it was argued that the initiative may not be used to circumvent the limitations on the referendum power. The court rejected the argument, noting that nothing in the Constitution prohibited use of the initiative to repeal tax laws. It found the reservation of the initiative power “to propose statutes . . . and to adopt and reject them” found in article II, section 8, subdivision (a), “clear and unambiguous.” (139 Cal.App.3d at p. 731.) The language of the San Francisco Charter is, if anything, even more clear and unambiguous. Respondents identify nothing in the charter that would have barred adoption of Proposition R had the board not already created a utility tax. Had the San Francisco voters been aware that such a tax was contemplated, their reserved power of the initiative could have been exercised to forestall adoption of the tax. That being so, it is not appropriate to invoke the policy, if in fact such a policy exists (see Birkenfeld v. City of Berkeley, supra, 17 Cal.3d 129, 143), of resolving doubts as to the scope of the initiative power to avoid interference with the legislative body’s responsibility for fiscal management. Nor is Proposition R a measure that is beyond the scope of the initiative or referendum because its “ ‘inevitable effect would be greatly to impair or wholly destroy the efficacy of some other governmental power, the practical application of which is essential. . . .’” (Simpson v. Hite (1950) 36 Cal.2d 125, 134 [222 P.2d 225].) The impact of Proposition R was to preclude collection of $10 million in residential utility taxes in the fiscal year following its adoption. Appellant asserts that this figure represented only .625 percent of the city’s general fund budget of $1.6 billion. Although the Board concluded that the tax was necessary because of the “dire financial straights” in which San Francisco found itself at the time the residential utility tax was imposed, it does not now argue that when regulation section 707.1 was adopted it had no source of replacement income. It is respondents, not the City and County of San Francisco, who challenge the repeal of the tax and they make no effort to demonstrate that removing the tax on residential utility use from the city’s budget substantially impaired the ability of the board of supervisors to carry out its charter responsibilities, including fiscal management. Respondents also fail to identify any basis on which exercise of the initiative power to enact regulation section 707.1 could be found to conflict with other provisions of the San Francisco Charter. We conclude, therefore, that the adoption of regulation section 707.1 by the voters of San Francisco was a permissible exercise of the initiative power. VII Future Tax Measures Section 9.114 of the San Francisco Charter provides: “No initiative, ordinance or measure or declaration of policy approved by the electorate under the provision [sic] of this charter shall be subject to veto, or be amended or repealed except by vote of the electorate, unless such ordinance or measure shall otherwise provide.” Section 707.1 of the revenue/business regulations, in addition to repealing the residential utility tax, provides in subdivision (c) that it may be amended only by the voters. Respondents claim that this ban on future amendment by the legislative body is invalid. The subdivision is actually surplusage, however, and adds nothing to the effect of the initiative measure. Because regulation section 707.1 is an initiative measure, it is subject to section 9.114 of the charter. Therefore, like any initiative, either by virtue of the identical constitutional limitation or by virtue of the charter, may be amended or repealed only by the electorate. The Court of Appeal, relying on Hunt v. Mayor & Council of Riverside, supra, 31 Cal.2d 619, and Campen v. Greiner, supra, 15 Cal.App.3d 836, concluded that regulation section 707.1 was invalid to the extent that it precluded amendment by the board of supervisors because it divested the board of its power to enact tax legislation. Appellant argues that the court erred in this respect also. We agree. The decisions on which the Court of Appeal relied are not controlling. Hunt v. Mayor & Council of Riverside, supra, 31 Cal.2d 619, held only that neither the constitutional nor the city charter power of referendum could be used to subject a sales tax ordinance to a vote of the people. We concluded that the charter could not be construed as contemplating that the city council budget process would be hampered by the uncertainty as to revenue available from all sources and the consequent delay in its fixing the property tax rate that would occur if a major source of revenue such as the sales tax were subject to a referendum. (31 Cal.2d at p. 629.) The decision considered only the scope of the referendum power. Campen v. Greiner, supra, 15 Cal.App.3d 836, in addition to improperly applying the Myers “backhanded referendum” rule to a charter city, held that the initiative’s bar to any future imposition of a utility tax was invalid as an attempt to do by initiative ordinance something that could only be done by charter amendment. The city council could not restrict its own powers and the legislative powers of the electorate were no greater than those of the council itself. Therefore, the court reasoned, the only manner in which such a bar could be enacted was through amendment of the city charter. The Campen court overlooked a fundamental aspect of the initiative power, one present in both the constitutional and, presumably, most charter initiative provisions. The people’s reserved power of initiative is greater than the power of the legislative body. The latter may not bind future Legislatures (City and County of San Francisco v. Cooper (1975) 13 Cal.3d 898, 929 [120 Cal.Rptr. 707, 534 P.2d 403]), but by constitutional and charter mandate, unless an initiative measure expressly provides otherwise, an initiative measure may be amended or repealed only by the electorate. Thus, through exercise of the initiative power the people may bind future legislative bodies other than the people themselves. (Kugler v. Yocum, supra, 69 Cal.2d 371, 375, fn. 2; Higgins v. City of Santa Monica (1964) 62 Cal.2d 24, 30 [41 Cal.Rptr. 9, 396 P.2d 41].) VIII Disposition The judgment of the superior court directing issuance of a peremptory writ of mandate should be reversed and the petition denied. The judgment of the Court of Appeal is reversed. Kennard, J., Arabian, J., and Werdegar, J., concurred. MOSK, J. I dissent. The majority are led to the wrong result by their reliance on inappropriate rules of construction and their hypertechnical analysis of what in essence is an uncomplicated question. In my view, equal parts of law and reason will yield the correct answer; I The majority’s first and principal ground of decision is deceptively simple. The majority observe the obvious—that although the referendum provisions of the California Constitution and the San Francisco Charter expressly exclude measures levying taxes from the referendum power, the initiative provisions of the same documents do not exclude those measures from the initiative power. To this self-evident premise the majority apply the rule that when the language of a statute (or constitution or charter) is clear, “ ‘its plain meaning should be followed.’ ” (Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 38 [283 Cal.Rptr. 584, 812 P.2d 931].) Focusing exclusively on the initiative provisions, the majority conclude that because such provisions do not expressly exclude tax measures, their “plain meaning” is that they include such measures. Although superficially attractive, the majority’s reasoning does not withstand analysis. First, the purpose of statutory construction is not merely to declare the plain meaning of the words used; the purpose is to understand the intent of the lawmakers, and the goal of that inquiry, in turn, is to give maximum effect to that intent. “We begin with the fundamental rule that a court ‘should ascertain the intent of the Legislature so as to effectuate the purpose of the law.’ ” (Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230 [110 Cal.Rptr. 144, 514 P.2d 1224]; accord, DuBois v. Workers’ Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387 [20 Cal.Rptr.2d 523, 853 P.2d 978]; Woolsey v. State of California (1992) 3 Cal.4th 758, 775 [13 Cal.Rptr.2d 30, 838 P.2d 758]; Burden v. Snowden (1992) 2 Cal.4th 556, 562 [7 Cal.Rptr.2d 531, 828 P.2d 672]; Legislature v. Eu (1991) 54 Cal.3d 492, 505 [286 Cal.Rptr. 283, 816 P.2d 1309]; People v. Pieters (1991) 52 Cal.3d 894, 898 [276 Cal.Rptr. 918, 802 P.2d 420].) “[T]he intent of the Legislature is the end and aim of all statutory construction” (Title Ins. & Trust Co. v. County of Riverside (1989) 48 Cal.3d 84, 95 [255 Cal.Rptr. 670, 767 P.2d 1148]). It is for this reason that although our inquiry begins with the words used by the lawmakers, it does not necessarily end by giving those words their plain or literal meaning. Rather, “the ‘plain meaning’ rule does not prohibit a court from determining whether the literal meaning of a statute comports with its purpose or whether such a construction of one provision is consistent with other provisions of the statute. . . . Literal construction should not prevail if it is contrary to the legislative intent apparent in the statute. The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299] [construing Cal. Const., art. V, § 5, subd. (b)].) This is a well-settled rule. (See, e.g., People v. King (1993) 5 Cal.4th 59, 69 [19 Cal.Rptr.2d 233, 851 P.2d 27]; People v. Broussard (1993) 5 Cal.4th 1067, 1071 [22 Cal.Rptr.2d 278, 856 P.2d 1134]; People v. Thomas (1992) 4 Cal.4th 206, 210 [14 Cal.Rptr.2d 174, 841 P.2d 159]; People v. Pieters, supra, 52 Cal.3d 894, 898-899; Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 401 [253 Cal.Rptr. 426, 764 P.2d 278]; Webster v. Superior Court (1988) 46 Cal.3d 338, 344 [250 Cal.Rptr. 268, 758 P.2d 596].) The same rule applies to constitutional provisions adopted by initiative. (E.g., Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245 [149 Cal.Rptr. 239, 583 P.2d 1281].) As we said seven decades ago in a case much cited since, “ ‘ “While the intention of the legislature must be ascertained from the words used to express it, the manifest reason and the obvious purpose of the law should not be sacrificed to a literal interpretation of such words.” ’ ” (In re Haines (1925) 195 Cal. 605, 613 [234 P. 883].) As will appear, the “plain meaning” rule is inadequate to give effect to the intent of the initiative and referendum provisions before us. Also inadequate to the task is a second general rule of construction invoked by the majority, i.e., that because the provisions in issue involve the initiative and referendum they must be “liberally construed” in favor of the people’s right to exercise those reserved powers. (Legislature v. Eu, supra, 54 Cal.3d 492, 501; Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d 208, 219-220.) In appropriate cases this rule is undoubtedly helpful; as will appear, however, to apply the rule here will result in defeating the intent of the framers. “We therefore adhere to the principle that the rule of liberal construction ‘ “should not blindly be followed so as to eradicate the clear language and purpose of the statute . . . .” ’ ” (City of Huntington Beach v. Board of Administration (1992) 4 Cal.4th 462, 472 [14 Cal.Rptr.2d 514, 841 P.2d 1034].) Specifically, “Although the initiative power must be construed liberally to promote the democratic process (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d 208, 219) when utilized to enact statutes, those statutes are subject to the same constitutional limitations and rules of construction as are other statutes.” (Legislature v. Deukmejian (1983) 34 Cal.3d 658, 675 [194 Cal.Rptr. 781, 669 P.2d 17]; accord, Lesher Communications, Inc. v. City of Walnut Creek (1990) 52 Cal.3d 531, 540 [277 Cal.Rptr. 1, 802 P.2d 317].) The same is true when, as here, the power is utilized to enact constitutional or charter provisions: our primary task remains to ascertain and effectuate the intent of the framers and of the electors who adopted those provisions. Next the majority stress that the “only express constitutional limitations” on the statewide initiative power (maj. opn., ante, at p. 695)