Joseph Krist
Publisher
CLIMATE LITIGATION
The Supreme Court announced it would hear arguments on a petition by Exxon Mobil and Suncor, a Canadian energy giant, in a lawsuit brought by the city and county of Boulder, Colo. That suit was first filed in 2018. In May, the State Supreme Court ruled 5 to 2, that the plaintiffs’ claims were not pre-empted by federal law, striking down a central argument that the companies have employed in their defense.
We detailed many of the pieces of litigation pending in the courts which could ultimately be impacted by a decision in this case (MCN 1.19.26). In this case, the question before the court is whether federal law precludes state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate.
In addition to the question presented by the petition, the parties were directed to brief and argue the following question: Whether this Court has statutory and Article III jurisdiction to hear this case? It is a sign that the Court may be looking for a way to avoid making a decision on a significant states’ rights issues.
PROPERTY TAXES
The California Property Tax Exemption for Elderly Residents Initiative may appear on the ballot in California as an initiated constitutional amendment on November 3, 2026. The initiative would amend the California Constitution to establish a property tax exemption on the homesteads of elderly residents 60 years of age or older for certain ad valorem taxes. It would reduce local property tax revenues by exempting a principal residence from property taxes if the homeowner, or the homeowner’s spouse: (1) is 60 years of age or older; and (2) has occupied the home as a principal residence for five consecutive years or has lived in California for at least 10 years.
The exemption terminates if property no longer qualifies as a principal residence. After five years, homeowners must certify their continued eligibility to maintain exemption. Exemption does not apply to voter-approved special taxes, assessments, or bonds. A simple majority vote is required for voter approval. 546,651 valid signatures are required. The deadline for signature verification is June 25, 2026. However, the secretary of state suggested deadlines for turning in signatures of January 12, 2026, for initiatives needing a full check of signatures and April 17, 2026, for initiatives needing a random sample of signatures verified.
The Florida House of Representatives approved a proposal that would eliminate non-school property taxes on homesteaded homes. The measure seeks to reduce the tax burden on residents significantly but faces additional legislative hurdles before becoming law. If the proposal receives final approval from the state Senate and Florida voters, the tax elimination would take effect in 2027. The plan focuses specifically on property taxes used to fund municipal and county operations rather than those designated for local schools.
CHICAGO DOWNGRADE
Fitch has downgraded Chicago’s Issuer Default Rating (IDR) and outstanding GO bonds to ‘BBB+’ from ‘A-‘. Fitch has also downgraded the Sales Tax Securitization Corporation’s (STSC) outstanding sales tax securitization bonds (senior lien) to ‘AA+’ from ‘AAA’. The downgrade reflects consecutive operating deficits since 2023, the still high dependence on non-structural solutions and assumptions underpinning the adopted 2026 budget, persistent out-year gaps, and ongoing disagreements between the administration and the city council.
Fitch does not expect significant budget reductions, particularly involving broad program or service cuts. It notes that “the city is pursuing new revenue streams that require state or voter approval, but this support does not appear likely in the near term. Property tax increases, which the city can implement under home rule, do not appear to have political support. Once the budget process went off the rails in December it was pretty clear that downgrades were likely.
DALLAS AREA RAPID TRANSIT
We reported in February (MCN 2.16.26) on efforts being undertaken to reform the board structure of the Dallas Rapid Transit District to give participating cities more of a say in the system’s operations. The hope was that the new structure would encourage members to take steps to remain a part of DART going forward. This week saw the first of a couple of deadlines come upon us and now at least three of the participants – Irving, Plano and Farmers Branch – have moved to cancel elections on the issue of withdrawal from Dart scheduled for May 2. The renewal of membership binds the cities to a six year commitment to DART.
OAKLAND SCHOOLS
The board of the Oakland, CA School District has been dealing with a looming budget deficit. (See MCN 1.26.26) Like many districts it faces pressures on enrollments and attendance at the same time that inflation also pressures the expense side of the budget. Last month it indicated that a variety of steps to reduce costs which cut the projected deficit to $50 million had been identified. This left the District with some very hard choices.
One of those choices was approved this week when the Board voted to approve layoffs that could affect more than 400 positions. Nearly 80% of the district’s entire budget goes toward paying staff, administrators to teachers to support staff. The cuts could impact a wide range of staff, including substitute teachers, tutors, counselors, nurses and other support positions. The layoffs would take effect next school year. This provides some time as the state budget process unfolds to see if any additional funding is provided.
The timing of the announcement reflects a March 15 state deadline requiring school districts to notify teachers and other employees of potential layoffs for the upcoming school year. It comes at a difficult time for the Board which is in the midst of labor negotiations with the Oakland Education Association, the union representing district teachers. Union members have authorized a potential strike, which leaders say could be announced if they determine the district is not bargaining in good faith. The union said it would provide at least 48 hours’ public notice before any strike begins.
ILLINOIS MUNICIPAL ELECTRIC
The Illinois Municipal Electric Agency, a nonprofit that procures power for 32 municipal electric utilities, began a process of asking its members to extend their commitments to buy energy through the group until 2055, even though existing contracts don’t lapse for another decade. Most communities signed on, but two that account for almost half of IMEA’s power demand — the Chicago suburbs of Naperville and St. Charles — have rebelled, declining to renew their contracts past 2035.
It’s all about the Prairie State Energy Campus, a 1.6-gigawatt facility in rural southern Illinois that is the state’s largest coal plant. IMEA owns 15% of Prairie State, which makes up over a third of the agency’s power portfolio. In September, Naperville sent IMEA a proposed contract calling for mandatory net-zero emissions by 2050. The agency countered that it would “endeavor to achieve” carbon neutrality by 2050 but declined to set binding targets.
Illinois’ 2021 Climate & Equitable Jobs Act mandates Prairie State specifically to reduce carbon emissions by 45% by 2038, which would likely mean closing one of its two units. The law contains exceptions from fossil-fuel emissions limits if needed to maintain grid reliability.
THE ELECTRIC ECONOMY
The Michigan Court of Appeals once again upheld a lower court’s decision to dismiss a citizen opposition group’s legal challenge over the rezoning of the land where Ford’s mile-long BlueOval Battery Park Michigan is being built in Marshall. ruling that the city’s rezoning ordinance is not subject to a public referendum. The $3 billion factory will produce lithium iron phosphate batteries by licensing technology from China’s Contemporary Amperex Technology Co. Ltd., the world’s largest battery manufacturer. Production is scheduled to begin this summer.
In Indiana, Hanjung America, a South Korean manufacturer of parts that support the energy storage supply chain for Stellantis and Samsung, announced its first U.S.-based plant in Huntington, Indiana. It is expected to provide 350 permanent jobs after construction is complete. It will make parts for large battery storage systems called Energy Storage Systems, or ESS. These batteries are used in electric vehicle (EV) production. The parts made in Huntington will support battery factories in Kokomo, run by Stellantis and Samsung. The company plans to break ground in April and expects to begin operating in June 2027.
In Tennessee, Ford reiterated this week that it still intends to honor its commitments to the state, according to a company spokesperson, including promises to create roughly 5,800 jobs at the BlueOval City site in exchange for a $900 million state-sponsored incentives package. This in the wake of the decision to halt electric truck production by Ford in December. Ford’s 2021 agreement with the state requires the company and the BlueOval SK joint venture to create at least 90% of the total 5,800 jobs within 10 years. Meeting that mark secures Ford and BlueOval SK a $500 million state reimbursement for construction work.
Failing to reach 80% of the promised jobs by 2032 would trigger a “clawback” requirement forcing the company to pay back that $500 million in addition to $175 million, based on the value of the state’s donated land.
BlueOval SK (Ford and SK On announced plans to end their joint venture in December) currently employs around 300 people in Tennessee and construction at the plant is complete. The facility is yet to have started production. The plant will manufacture batteries for Ford under a supply agreement and SK On plans to supply batteries to other customers, including for use in energy storage systems.
TEXAS WATER
The Corpus Christi City Council approved a resolution authorizing the negotiation of a contract for the Inner Harbor Seawater Desalination Treatment Plant project with Corpus Christi Desal Partners (CCDP), a joint venture with Acciona Agua Corporation and MasTec Industrial Corporation. The vote revives a project which was halted in September. (See MCN 11.10.25)
It also authorizes construction contracts for ancillary improvements in an amount up to $11,451,526 and emergency construction contracts totaling up to $120 million for a pump station and conveyance system connecting the Western Well Field to the O.N. Stevens Water Treatment Plant.
HOUSTON FLOOD MAPS
Since FEMA last released flood zone maps in 2007 for Harris County, Texas, the region has undergone significant development and has experienced greater rainfall. These are among the factors that have led FEMA to expand designated flood zones significantly. the area’s 100-year flood zones have grown by 43%. Meanwhile, 500-year flood zones increased 30%. In total, about 420,000 properties could be reclassified as having a greater risk of flooding.
There are real implications. Any property owner with a federally backed mortgage will be required to carry flood insurance. Overall, location in a flood zone will increase the cost of insurance. Many neighborhoods impacted by this risk are more financially vulnerable. It comes in a time of lower federal support for disaster recovery which for many of the less well off is their only significant assistance.
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