Lawmakers also approved competing ballot questions that would make it easier to raise taxes and harder to increase burdens on them, setting the stage for a complex and tax question-heavy ballot fight next year.
The measure at the center of the tussle is known as the Taxpayer Protection and Government Accountability Act by its supporters, which include the California Business Roundtable and the Howard Jarvis Taxpayers Association.
How would the ballot measure make it harder to raise taxes in California?
The ballot proposition would require voters to sign off on any new state tax or tax increase. It would also raise the threshold for voter approval of citizen-proposed taxes in cities, towns and counties from a simple majority to a two-thirds vote.
Jon Coupal, President of the Howard Jarvis Taxpayers Association, called the measure “the latest iteration of our efforts to bring some degree of fiscal sanity to the State of California.”
The measure would also reclassify many regulatory fees as taxes, which would subject them to the same requirements as taxes in order to be increased. Currently, some state and local governing bodies have delegated authority to agencies – such as municipal departments – to increase certain fees.
If approved, the proposition would apply retroactively to all state and local tax increases since January 1, 2022 with a remedy period. That could mean a reversal of new local taxes that aren’t able to meet the requirements, which has raised alarm from the League of California Cities and a handful of mayors.
Why are Newsom and the California Legislature trying to get it removed from the ballot?
In late September, Newsom, the Legislature and former California Democratic Party chair John Burton filed an emergency petition asking the California Supreme to invalidate it.
Their main argument is that the measure is so sweeping that it is a constitutional revision, rather than a constitutional amendment.
In court documents, lawyers for Newsom and the Legislature describe it as “unlike any measure that has ever gone before the voters with respect to the sweeping changes it would make to California’s fundamental governmental structure, the foundational powers of its branches, and the government’s ability to provide the essential government functions required by a functioning state.”
Newsom spokesperson Erin Mellon said the governor, who has a business background, “is not a proponent of tax increases” but warned the ballot measure would “effectively block the state’s ability to quickly respond to major challenges.”
“The recession 15 years ago underscores the need for government to use every tool in the toolbox to respond to crises,” Mellon said.
Following the 2008 recession, California temporarily enacted increases in sales and income taxes to make up for lost revenue.
In a joint statement, Speaker Robert Rivas (D—Hollister) and Senate President pro Tem Toni Atkins (D—San Diego) called the measure an “unlawful effort to revise our state constitution” which “seeks to eliminate the state’s ability to swiftly respond to emergencies and provide resources for critical services that Californians and communities rely upon.”
What are backers of the measure saying about the lawsuit?
A spokesperson for the Taxpayer Protection Act campaign, Hector Barajas, called the lawsuit a “politically motivated attempt to keep the highly popular measure off the ballot by taking the extreme action of demanding the Court disenfranchise voters and denying them their lawful right to amend the California Constitution.”
Coupal of the Howard Jarvis Taxpayers Association said the argument that the measure is a constitutional revision — rather than a constitutional amendment — is “extraordinarily weak.”
What’s next?
First, the California Supreme Court must decide whether to even consider removing the question from the ballot before the November 2024 election. Justices could opt to give voters the chance to weigh in before deciding on the question about whether the measure is a constitutional amendment or a constitutional revision.
Lawyers for Newsom and the Legislature are asking the court to make a decision before June 27, 2024 — the deadline for the Secretary of State to remove items from the November ballot.
Meanwhile, state lawmakers recently approved two separate measures for next November’s ballot which critics describe as attempts to undermine the Taxpayer Protection Act:
- ACA 1 would lower voter thresholds for approving certain local taxes and bond measures from two-thirds to 55%.
- ACA 13 would make it more difficult to raise thresholds on new taxes (which is what the Taxpayer Protection Act aims to do). For example, if a ballot measure is attempting to require a 60% vote on any new taxes or tax increases, that measure would have to be approved by 60%.
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