California Supreme Court to weigh pulling measure making it harder to raise taxes from ballot

SAN FRANCISCO– The California Supreme Court is expected to hear arguments Wednesday on whether to remove from the November ballot a measure that would make it harder for state and local governments to raise taxes.

The measure would require all new and higher taxes to be approved by voters. Currently, the legislature can raise taxes with a two-thirds vote in both the Senate and Assembly. The initiative would require voters statewide to weigh in after approval by the Legislature, with the new tax only taking effect if a majority approves it.

The measure would also change the way communities can raise taxes through citizen initiatives. Currently, a local initiative for a special tax increase requires a simple majority vote. The ballot measure would change that to a two-thirds majority.

The lawsuit pits Democratic Gov. Gavin Newsom, who wants to throw the election off the ballot, against business groups and taxpayer advocates who say it’s time to rein in government spending. The fight comes as Newsom faces continued criticism that California has become too expensive for many of its 39 million residents.

A lawsuit filed last fall by Newsom, the Legislature and John Burton, a former congressman and chairman of the California Democratic Party, asked the court to remove the measure from the ballot. They argued that, if approved, it would “eliminate much of the executive branch’s administrative and regulatory power and revoke the tax authority that the Legislature has had throughout California’s history.”

They said the sweeping proposal would limit the revenue local communities need to run essential public services, from collecting waste to fighting fires, and make it difficult to have the resources needed to respond to state emergencies such as earthquakes and global pandemics.

The measure, they argued, would “provide a far-reaching change in the fundamental structure of government or the fundamental power of its branches as set forth in the Constitution” and amounts to a revision of the California Constitution, requiring a vote by the Legislature is required.

But proponents of the measure say Californians face some of the highest taxes and one of the highest costs of living in the country, and the changes are needed.

“The whole problem here is that they are terrified that the people of California will have the power to vote on state and local taxes,” said Rob Lapsley, president of the California Business Roundtable, an advocacy group that represents major corporations and has a leading role plays. in favor of the initiative.

The California Supreme Court is expected to decide before June 27 — the deadline for the secretary of state to certify California’s general election — whether the measure would revise the state constitution and affect essential government functions.

The measure, which gathered 1.4 million signatures to qualify for the ballot, would also reclassify many government levies as taxes and apply retroactively to any tax increase approved after Jan. 1, 2022.

Carolyn Coleman, CEO of the League of California Cities, which is part of a coalition opposing the measure along with firefighters and teachers unions, called the measure “deceptive” and “an existential threat” to local governments.

Coleman said more than 100 local measures that currently fund about $2 billion a year in municipal revenues could disappear if the measure is approved and the taxes are not reapproved by voters under the new rules.

“We’re raising the resources to fill potholes, so we can support affordable housing in our community, so we can work to address homelessness, so that when you call 911, someone is there to answer the phone — not within two minutes – but within 30 seconds,” she added. “So this really goes against the essential nature of how local governments raise revenue to provide services that everyone in their community wants.”

Brooke Armor, executive vice president of the California Business Roundtable, said claims that the measure would cause chaos in local governments are false because the measure would only affect tax increases proposed through citizen initiatives. About three dozen local initiatives would be affected by the changes, not more than 100, she said.

“We are only returning to two-thirds (approval) for citizen initiatives that are special taxes,” she said.

Armor said special taxes put on the ballot by local elected officials, such as a city council, already require a two-thirds vote for approval. Any measures to increase general taxes would still be approved by a majority vote, she said.

An example of a community that could be affected if the measure is approved is San Andreas, a city of about 2,500 residents and the county seat of Calaveras County. In March, 55% of county voters approved a citizen initiative to impose a 1% sales tax so the county’s ten fire districts would have money to retain or hire firefighters.

The San Andreas Fire Protection District relies on volunteer firefighters who are paid $120 to $200 per 24-hour shift. The district keeps losing its firefighters to better-paying jobs, said Dana Nichols, president of the San Andreas Fire Protection District.

Nichols said the tax is about $60 per taxpayer per year.

“Not paying the firefighters is not going to reduce the cost of eggs or gas or anything,” Nichols said.