California Supreme Court orders Taxpayer Protection Act off the ballot, siding with Newsom

For the first time in decades, the California Supreme Court has taken a citizen initiative off the ballot before voters could weigh in.

Justices on the state’s highest court unanimously ruled the measure known as the “Taxpayer Protection and Government Accountability Act,” also known as the TPA, amounts to an illegal constitutional revision. Only the Legislature has authority to put a proposed revision before voters, and the TPA was initiated by business groups via a ballot measure.

The measure aimed to restrict tax increases across California by requiring voters to approve any new statewide tax and raising thresholds for approval of local taxes. Gov. Gavin Newsom and a coalition of Democratic elected officials and labor unions asked the court to remove the initiative from the November ballot, arguing it would fundamentally change the power of the Legislature and local governments to levy taxes.

Justices agreed with Newsom and his allies, ruling the measure “exceeds the scope of the power to amend the Constitution via citizen initiative.”

“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,” the court’s opinion reads.

The ruling directs the Secretary of State to “refrain from taking any steps to place the TPA on the November 5, 2024 election ballot or to include the measure in the voter information guide.”

“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.”

Labor unions and other Democrats celebrated the decision as one that would protect investment in state 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, a spokesperson for the campaign opposing the initiative. “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.”

Business-aligned proponents of the measure blasted the ruling as politically motivated and a hit to California’s direct democracy.

“Today’s ruling is the greatest threat to democracy California has faced in recent memory,” backers including Rob Lapsley of the California Business Roundtable, Matthew Hargrove of the California Business Properties Association and Jon Coupal of the Howard Jarvis Taxpayers Association said in a statement. “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. 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.”

The backers said the decision “sends a damning message to businesses in California and across the country that it is politically perilous to invest and grow jobs for the future.”

They vowed to explore legal options and “fight for the people’s right to hold their government accountable through direct democracy.”

New statewide taxes and tax increases in California already require approval from two-thirds of state lawmakers in both chambers. The measure sought to add an additional requirement for voters to approve them, as well. The TPA also would have reclassified many government fees as taxes and nullified recent tax increases that did not meet its new requirements.

High court justices agreed with arguments from Newsom, Democratic lawmakers and former directors of the state Department of Finance that the measure sweeping measure would fundamentally change the powers of state government by shifting taxing authority from the legislature to voters.

“Such a change would significantly alter the legislative process and framework for exercising the taxing power,” the ruling, authored by Justice Goodwin H. Liu, reads.

Justices also took issue with the initiative’s attempt to define government fees as taxes, ruling it would shift the power to set fees from a local government’s administrative branch to the legislative branch. Rather than a mayor or other government administrative official setting library fees or utility rates, the taxpayer Protection Act would have placed those decisions would fall before a local legislative branch.

“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 ruling reads.

In a meeting with reporters after the ruling, Lapsley said the campaign behind the Taxpayer Protection Act is shifting its immediate attention to support a ballot measure that aims to reform Proposition 47 and oppose two tax-friendly measures placed on the ballot by Democratic lawmakers.

He said his coalition is exploring options for the 2026 ballot, including potentially individual pieces of the Taxpayer Protection Act.

“This for us is just a battle in the bigger war. We will be back,” Lapsley said.