State Supreme Court Orders Taxpayer Protection Act Off the Ballot

by on June 20, 2024

posted in Elections, Initiatives,

Cities, counties, and special districts can breathe a sigh of relief.  Today, the California Supreme Court ordered the “Taxpayer Protection and Government Accountability Act,” or “TPA,” be left off the November ballot.  The Court’s decision was unanimous.

The legal issue decided was a technical—though important—one.  The Court determined the TPA was a “revision” rather than “amendment” to the State Constitution.  This determination, the Court reasoned, required the extraordinary relief of keeping the TPA off the ballot.

Amendment or Revision?

Constitutional amendments may freely be presented to voters, as happened with the trio of tax initiatives local governments know well (Propositions 13, 218, and 26). But when a revision is proposed, a constitutional convention—a considerably more involved process—is required.  In our state’s history, we have only had two constitutional conventions—in 1849 and 1879.

In the Court’s view, the TPA would revise the State Constitution because it “would substantially alter our basic plan of government.”  The Court described in great detail how this would be so for state and local governments.

Impacts on Local Government

For local government, the TPA’s new definition of “tax” would have greatly expanded the class of monetary charges requiring voter approval well beyond what Propositions 26 and 218 currently require.  In nearly every way local governments charge money, the TPA would have limited local governments to charging for “actual” costs.

The TPA also would have blurred the lines between executive and legislative functions.  Effectively, nearly any matter involving monetary charges would require presentation to an agency legislative body.  City councils, boards of supervisors, and boards of directors would, for instance, have had to decide matters their administrative staff would ordinarily handle, such as routine utility rate adjustments or charges for community center rentals.

The TPA would further have radically upended previous authority regarding the referendum power.  Under the TPA, local voters would have had the power to referend existing utility taxes.  This power would even have extended to fines and penalties—long considered administrative matters beyond the reach of referenda.

Is this the End for Local Tax “Reform”?

Thankfully, the demise of the TPA means the law concerning local agency rate setting will remain the same for now—at least until the next general election.

The Supreme Court’s decision also avoids any legal battles over the TPA’s retroactivity clause, which would have subjected any type of monetary charge approved after January 1, 2022 to the initiative’s new procedures.

However, the TPA’s removal from the ballot raises the question whether future local tax limitation measures remain possible.  Does today’s decision mean we have finally reached the ceiling for local tax “reform”?

Because of the “preelection” posture in which the Supreme Court case arose, the Court had to consider the effect of the TPA as a whole.  The sweeping nature of the full package of reforms the TPA proposed was a key reason why the Court took the drastic step of ordering it off the ballot.  It is possible a less ambitious future initiative could be considered a constitutional amendment, rather than revision, and be presented to voters.

At the same time, the Court seemed greatly concerned about the impact some TPA provisions would have on the constitutional separation of powers.  A scaled-back initiative that still proposes to conflate local executive and legislative functions may suffer the same fate.

tags: California Supreme Court, Consitutional Convention, Initiative, November 2024 Election, Taxpayer Protection Act, TPA,

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