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June 25, 2024  |  Written by Casey A. Shorrock

California Supreme Court Removes Citizen Tax Initiative From Ballot That Would Impermissibly Revise State Constitution And Alter Government Functions

In Legislature of the State of California v. Weber, S281977 (Cal. S. Ct., filed Sept. 26, 2023), a unanimous California Supreme Court ordered a citizen tax initiative removed from the November ballot. The so-named Taxpayer Protection and Government Accountability Act would have changed the state Constitution to require that a majority of California voters approve a state tax increase, in addition to the existing two-thirds majority vote required by the Legislature, before it could take effect. It also would have required local voters to approve any tax or licensing fee increases approved by cities or counties, with a two-thirds majority required to raise funds for specific programs. The initiative was crafted to apply retroactively to all taxes and fees raised since 2022, effectively canceling them unless approved again within 12 months by the lawmakers and voters designated in the ballot measure.

The state as petitioner primarily argued that the initiative was invalid because it attempted to revise the California Constitution, which is disallowed using the citizen initiative under processes outlined in article XVIII of the Constitution, instead of amending it as initiative proponents claimed, which is allowable under these circumstances. Under Article XVIII, voters may “amend the Constitution by initiative” but a constitutional revision must be approved by two-thirds of the Assembly and Senate before being submitted to the voters or approved by constitutional convention. The principal difference between the two, as defined by the court in decades of caselaw, is that a constitutional revision results in “far reaching changes in the nature of our basic governmental plan.” The state claimed that the initiative would indeed “seriously impair essential government functions” because it would transform the Legislature’s power to levy taxes, change the balance of legislative and electorate power to levy taxes, and alter the authority of local governments to set fees.

Initiative proponents argued that the state did not and cannot explain how the initiative’s voter approval requirement is more damaging to legislative power than any other prior tax-related constitutional amendments, such as Proposition 13 (1978) that capped increases in property taxes and assessments and other state and local taxes, and that the government can “ ‘call a special election at any time to ask voters to approve taxes….’ ” Moreover, proponents argued that the initiative kept taxing power within the legislative branch, it “simply moves” it to the electorate.

Justice Goodwin H. Liu, writing for the court, explained the specific changes that the initiative proposed for the Constitution and discussed previous caselaw indicating the type of measure constituting a revision. The court examined the initiative in its entirety and ultimately agreed with the state that the purported changes were not an amendment but in fact a revision. Unlike Proposition 13 and its progeny, this initiative would “transform the process of levying state taxes that has existed since the state’s founding.” It would not just cap tax increases, it “would prevent the Legislature from enacting any new tax without voter approval.”

The court ultimately held that “[t]he changes proposed by the [initiative] are within the electorate’s prerogative to enact, but because those changes would substantially alter our basic plan of government, the proposed cannot be enacted by initiative. It is instead governed by the procedures for revising our constitution.” In short, the measure “exceeds the scope of the power to amend the Constitution via citizen initiative.”

The court further opined that the initiative “would significantly alter the existing constitutional balance between direct democracy and representative democracy, with reverberations throughout the framework of our government,” while also attempting to constrain its ruling by noting that it “express[es] no view on what [initiative] process achieves the optimal balance among efficiency, accountability, transparency, and other interests.” The court concluded by “directing the (CA) Secretary of State to refrain from taking steps to place” the initiative “on the November 5, 2024 election ballot or to include the measure in the voter information guide.”

While it is unusual for the State Supreme Court to remove a voter initiative from the ballot, it is not unprecedented. The court “typically review[s] constitutional challenges to an initiative after an election in order to avoid disrupting the electoral process and the exercise of the franchise,” but can and does exercise “preelection review.” In 1999, the court directed removal of a citizen initiative from the ballot where the state similarly argued that the initiative impermissibly revised the constitution. The same argument won in 1948 when preelection relief also was granted.

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