The California Supreme Court has unanimously blocked efforts to place the “Taxpayer Protection and

Government Accountability Act” (TPA or the Act) on the November ballot. The TPA would have amended the State Constitution to require every new tax imposed by state law to be the subject of a ballot referendum.

The Act was opposed by the California Legislature, Governor Gavin Newsom, and former Senate President John Burton. They argued that the TPA is invalid because it would revise the California Constitution and because “it would seriously impair essential government functions.” These opponents sought and received a writ of mandate to bar Secretary of State Shirley Weber from placing the TPA on the November ballot. On February 1, 2023, Weber certified that the initiative petition had received the required number of signatures to qualify for the November ballot. The petitioners responded with their emergency writ of mandate in September of last year.

Although Secretary Weber is responsible for placing ballot initiatives and therefore named in the lawsuit, the real party in interest in the suit is Thomas W. Hiltachk, a political and election lawyer from Sacramento whose specialty is laws governing the State’s initiative process. Hiltachk explained that the purpose of the TPA “is to enable voters to reassert their right to a voice and vote on new and higher taxes” by requiring that the issue be placed on the ballot.

In his response to the petitioners’ request for a writ of mandate, Hiltachk argued that the writ should be denied because there was “no clear and unquestionable showing of invalidity” as required by law, there was no “emergency” that justifies the court’s immediate intervention rather than waiting for the results of the ballot initiative, and petitioner’s claim unlawfully revises the Constitutional parallels that were previously rejected by the Supreme Court, which upheld “strikingly similar” provisions in Proposition 13. Approved in 1977, Prop 13 froze the tax base of homes, which limited annual property tax increases.

Hiltachk also noted that California’s state and local tax burdens are “the highest in the nation.” This dubious honor results not only from high taxes but from “hidden fees” passed on to consumers in the prices they pay for goods and services. These costs also contribute to the “state’s skyrocketing rate of poverty and homelessness... (and) push working families and job-providing businesses out of the state.”

None of these arguments were persuasive to the Supreme Court. By a 7-0 vote, in an opinion authored by Justice Goodwin Liu, the opinion issued the peremptory writ of mandate that directed Weber to refrain from taking any steps to place the TPA (aka Secretary of State Initiative No. 1935) on the November 5 ballot. This order, placed on June 20, was to become final on June 26, the day before referendums must be received in order to qualify for the November 5, 2024 ballot.

Early in the opinion, Liu explained, “The only question before us is whether the measure may be validly enacted by initiative.” He concluded it could not because the court found that the Petitioners “have clearly established that the challenged measure would revise the Constitution without complying with the appropriate procedure.” He said that the “changes 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.” He continued by writing that rather than being considered by the voters via referendum, the TPA is governed by procedures for revising the State constitution.

Liu then described the specific amendment Hiltachk sought. He said the ballot initiative “would amend article XIII A, section 3 of the California Constitution, first, by adding a new subdivision (a) to provide that “…every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt charge.” He elaborated that the word ‘tax’ means “any levy, charge, or exaction of any kind imposed by the State” that is not an exempt charge. Liu added that both houses of the State legislature had to pass a law that provides clear and convincing evidence that a new tax is an exempt charge rather than a new tax.

The opinion continues by striking most of Hiltachk’s arguments. First, the justices disagreed with the contention that constitutional challenges of ballot initiatives must be heard after, not before, an election. Liu wrote, “… preelection review is proper for challenges that go “to the power of the electorate to adopt the proposal in the first instance.” In response, he ruled that petitioners had made “a prima facie showing that TPA would amount to an invalid constitutional revision based on its far-reaching changes to existing processes by which revenue measures are enacted and maintained at the state and local levels.” This argument was reinforced by the TPA’s “rollback provisions” that would have voided any tax passes after January 1, 2022.

Liu next justified the writ by reviewing the provisions of the California Constitution’s ballot initiative provisions, focusing on the different rules for revision and amendment. After presenting a detailed history, including precedent-setting court decisions, the opinion concluded the TPA “would substantially transform the process for enacting new statewide tax legislation that has existed since the state’s founding and that this transformation weighs significantly in favor of finding that the TPA would effect a constitutional revision.” Hiltachk was also faulted for “shifting power between the legislative and executive branches,” thus “significantly rework(ing) the current balance” between the two branches of government.

The opinion concluded by saying the TPA’s proposed changes would also “transform local revenue-raising” by requiring that all exempt changes go through the legislature instead of administrators.

For these and other reasons, the opinion summed up the TPA by writing that it “would shift so much authority, in such a significant manner, that it would substantially alter our framework of government.”