The California Supreme Court on Thursday took a measure to limit tax increases off the ballot, handing a victory to Gov. Gavin Newsom and other state Democrats who opposed the proposal.
The justices ruled that the initiative, called the Taxpayer Protection and Government Accountability Act (TPA), would illegally revise the state constitution. The TPA was proposed by business groups as a ballot measure, but only the state legislature holds the power to put a constitutional revision before Gold State voters, the court said.
"The changes proposed by the TPA are within the electorate’s prerogative to enact, but because those changes would substantially alter our basic plan of government, the proposal cannot be enacted by initiative," Associate Justice Goodwin Liu wrote in a 74-page opinion.
The TPA would have required California voters to approve any new statewide tax, in addition to two-thirds of the legislature, and forced lawmakers to declare the duration and estimated annual revenue of any tax proposal. The act would also restrict how the state spends tax revenue and clarify that any fees imposed by the government are taxes, among other reforms.
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The court instructed the California Secretary of State to refrain from placing the TPA measure on the ballot in November. It is a rare move for the court, which does not often remove measures put on the ballot for voters.
The decision was welcomed by Newsom, who joined forces with state lawmakers and former state Senate President Pro Tempore John Burton to challenge the ballot measure in court.
"We are grateful the California Supreme Court unanimously removed this unconstitutional measure from the ballot," Newsom spokesperson Izzy Gardon said in a statement. "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."
A coalition of labor unions and local government groups said the court's decision would protect funding for government services.
"We have argued from day one that the Taxpayer Deception Act is an illegal revision to the constitution funded by a handful of wealthy real-estate developers and landlords desperate to avoid paying their fair share," said Jonathan Underland, spokesperson for the NO on the Taxpayer Deception Act campaign.
"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."
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Business groups that supported the initiative slammed the court's decision as an attack on direct democracy in California.
"Today’s ruling is the greatest threat to democracy California has faced in recent memory. Governor Newsom has effectively erased the voice of 1.43 million voters who signed the petition to qualify the Taxpayer Protection Act for the November ballot," said Rob Lapsley, president of the California Business Roundtable; Jon Coupal, president of the Howard Jarvis Taxpayers Association and Matthew Hargrove, president and CEO of the California Business Properties Association in a joint statement.
"Most importantly, the governor has cynically terminated Californians’ rights to engage in direct democracy despite his many claims that he is a defender of individual rights and democracy. Evidently, the governor wants to protect democracy and individual rights in other states, but not for all Californians."
The high court agreed with arguments from the state that the TPA would "significantly alter the legislative process and framework for exercising the taxing power."
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The justices said that by redefining government fees as taxes, the measure would remove the power to set fees from local government administrators and place them with a local legislative branch. Legislative councils would have to set library fees or utility rates, for example, rather than a mayor or local executive department, according to the Sacramento Bee.
"The reassignment of local fee-setting from administrative to legislative processes would substantially alter the processes by which local governments raise revenue and, in so doing, would significantly alter the work of local government itself," the court's opinion states.
Lapsley told reporters after the ruling that the TPA campaign would look at reintroducing parts of the measure on the 2026 ballot.
"This for us is just a battle in the bigger war. We will be back," he said.
Steve Hilton, a Fox News contributor and founder of the nonpartisan policy group Golden Together, said the court's decision would mark, "the beginning of the end of Democrat rule in California."
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"We now see clearly that an arrogant, morally bankrupt ruling elite in Sacramento, drunk on their own power, cannot stand the slightest challenge to their extreme ideology, a far-left experiment that has led to failure on every front," Hilton said in a statement.
"When citizens rise up to demand common sense, reasonable reform, they are thwarted with cynical schemes designed to perpetuate the Democrat political monopoly by undermining democracy."
