California Democrats score big win as Supreme Court blocks anti-tax ballot measure

The century-long and often tortured history of California making law through ballot measures took a new turn Thursday when the state Supreme Court blocked an initiative that would have made it much more difficult to raise state and local taxes.

Unanimously, the court agreed with Gov. Gavin Newsom and a Legislature controlled by fellow Democrats that the Taxpayer Protection Act, as it’s called shorthand, would be a revision of the state constitution and cannot be proposed via initiative, rather than a constitutional amendment as its proponents contended.

“No speculation regarding potential future consequences is needed to conclude that the TPA is a revision on its face,” the opinion declared. “The measure would fundamentally restructure the most basic of governmental powers. The TPA would exclude the levying of new taxes from the Legislature’s control by requiring voter approval of all such measures.”

The ruling was a victory not only for Newsom and legislative leaders, but for the Democratic Party’s most powerful political allies in public employee unions, which were prepared to spend tens of millions of dollars to defeat it.

“We applaud the Supreme Court’s decision to remove the Taxpayer Deception Act from the ballot,” Lorena Gonzalez, who heads the California Labor Federation, said in a statement. “This unconstitutional measure was another cynical and self-serving effort by corporate interests to put their greed ahead of the needs of all Californians.”

It was a crushing defeat for the California Business Roundtable and anti-tax groups such as the Howard Jarvis Taxpayers Association, which had hoped that the measure, which would have required voter approval of new taxes, would block the tendency of Democratic officials in a deeply blue state to expand programs and raise taxes to pay for them when needed.

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Recent polling has indicated that Californians feel overtaxed, which would have helped the measure’s backers potentially win in November. Fear of that outcome propelled Democratic officials to ask the Supreme Court to block the measure from reaching the ballot. They won the case exactly one week before the final deadline for determining what will make the ballot.

The tax initiative was just one example of how business and other conservative interests have turned to ballot measures — both initiatives to make new laws and referendums to overturn legislative acts and counteract policies they consider to be onerous.

Just days ago, for instance, Newsom and legislators agreed to make changes in California’s unique Private Attorneys General Act rather than face a business-sponsored ballot measure that would have repealed the 21-year-old law allowing employees to pursue class-action lawsuits for violation of employment laws.

Last year, a compromise was struck to water down a law that would have raised wages of fast-food workers and undermined the industry’s franchise model. The Legislature is also trying to head off another pending measure that would toughen sentences for certain crimes.

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State law once mandated that when measures qualified for the ballot, they could not be removed. In 2014, however, legislation was passed to allow the removal of measures by their sponsors if their issues had been adequately addressed by the Legislature.

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“By allowing an initiative proponent to withdraw their measure closer to the election, it allows for the possibility of reasoned compromise and a better result between the people’s elected government and the people’s initiative alternative,” the lead sponsor of the legislation, then-Senate President Pro Tem Darrell Steinberg, said at the time.

In practice, however, it empowered conservative interests to compel a liberal Legislature to pay attention to their demands by qualifying counteracting measures for the ballot.

Thursday’s Supreme Court decision may give liberals a pathway, in some instances, to knock hostile measures off the ballot.

Dan Walters is a CalMatters columnist.

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