A California ballot measure that would have required voter approval for any future state tax hikes violates the state Constitution and will not be allowed to appear on November ballots as planned, the California Supreme Court ruled Thursday.
Justice Goodwin Liu, who authored the opinion for the unanimous court, wrote that the changes proposed by the measure “would substantially alter our basic plan of government,” and could only be enacted through a revision to the state’s Constitution.
The rare ruling by the state’s highest court to remove an otherwise qualifying ballot measure comes just days before ballots must be finalized. It marks a major last-minute victory for Democratic leaders and labor unions, which had warned the measure would hamstring good governance in favor of corporations if passed.
State leaders — who brought the lawsuit challenging the measure — had also argued that the measure usurped their authority.
“We are grateful the California Supreme Court unanimously removed this unconstitutional measure from the ballot,” said Izzy Gardon, a spokesperson for Gov. Gavin Newsom, in a brief statement released following the decision. “The Governor believes the initiative process is a sacred part of our democracy, but as the Court’s decision affirmed today, that process does not allow for an illegal constitutional revision.”
Assembly Speaker Robert Rivas (D-Hollister) said he was “very pleased” the court had “rejected this unlawful and extreme effort to take power away from local communities to pay for essential services like police and firefighters.”
Business interests and taxpayer advocacy groups had championed the measure and collected the signatures needed to put it on the ballot, arguing its passage was vital for continued job creation and company retention in California.
In a joint statement, several major backers of the measure — Rob Lapsley, president of the California Business Roundtable; Jon Coupal, president of the Howard Jarvis Taxpayers Assn.; and Matthew Hargrove, president and chief executive of the California Business Properties Assn. — accused the high court of putting “politics ahead of the Constitution.”
They said Newsom had “effectively erased the voice” of more than a million voters who had signed the petition to put the measure on ballots.
California Senate Republicans who had backed the measure denounced the decision as a partisan one from a liberal court.
Senate Minority Leader Brian Jones (R-Santee) said he was “disgusted” with the ruling.
“The court has failed in its duty to the people of California and our democratic system and instead simply caved to pressure from the governor and legislative Democrats,” he said.
Sen. Brian Dahle (R-Bieber) called the ruling a “slap in the face to California citizens,” as the court’s “partisan justices are not only interfering in the initiative process put in place to protect the people’s right to be heard in our democracy, but they’re doing it at the request of the very people who want to raise our taxes time and time again.”
Before Thursday, Democratic lawmakers had been negotiating to have the measure voluntarily removed from the ballot as part of a broader policy deal. The timing of the decision does not give proponents enough time to amend the measure before the June 27 deadline to finalize initiatives for the ballot.
Officially known as the Taxpayer Protection and Government Accountability Initiative, the measure would have expanded the requirements necessary for a statewide tax increase from a two-thirds vote of the Legislature to a two-thirds vote by lawmakers and approval by a majority of California voters.
It would have also changed the threshold for passing local special taxes from a majority vote to a two-thirds vote of the people. Taxes, on things like income or the sale of goods fund a variety of government expenses through the state’s general fund.
Local governments would have been required to vote on any fee increases — which can currently be approved administratively — and a majority of the state Legislature would have to vote to approve any state fee increases, which currently are often approved by state agencies and boards. Fees often are used to cover the cost of specific government services.
Business groups argued the measure was necessary to add more checks on the taxing habits of progressive state leaders. Democratic leaders and lawmakers, joined by unions and other liberal allies, had said the measure would undermine the Legislature’s ability to balance the state’s budget without threatening progressive policy priorities.
Liu wrote that the court did not take a position on the “wisdom” of the “fundamental changes” included in the measure. Rather, it simply concluded that those changes constituted a “revision” of the state’s Constitution because they would “fundamentally restructure the most basic of governmental powers” — and therefore could only be enacted through the established protocols for changing the Constitution, not through a voter initiative.
“The TPA would exclude the levying of new taxes from the Legislature’s control by requiring voter approval of all such measures. In so doing, it would disturb the long settled understanding,” Liu wrote, that the “power of taxation” is an “indispensable power” of the Legislature, “without which it would become impossible for that body to perform its functions.”
Citing the measure’s additional restrictions on revenue gathering by both state and local governments, Liu wrote that the effects of the measure would be “intensified” — because while “a restriction on the ability of local governments to raise revenue might previously have been offset by the power of the state to raise revenue, the TPA burdens both simultaneously.”
Liu wrote the electorate “remains free to modify” the “basic plan of our state government” set forth in 1879 — but only through the standard process for constitutional revisions.
Former Gov. Jerry Brown, who joined opponents in asking the court to remove the measure from the ballot, appointed Liu to the court in 2011.
Jonathan Underland, a spokesperson for a labor-backed campaign opposing the measure, praised the high court’s decision.
“The Supreme Court’s decision to take this dangerous initiative off the ballot avoids a host of catastrophic impacts, protecting billions of dollars for schools, access to reproductive healthcare, gun safety laws that keep students safe in classrooms and paid family leave,” he said.
Members of the Service Employees International Union (SEIU) in California, a major labor organization that had worried about the impact of the measure on funding for teachers, police officers, firefighters and other public sector employees, also praised the decision.
David Huerta, the group’s president, said in a statement that the measure “was a flagrant attempt by a few extremely wealthy real estate developers to undermine our entire democratic system and our voice as voters and devastate the vital services Californians rely on — all to avoid paying their fair share.”