California Supreme Court Shoots Down Ballot Measure To Constrain Taxes

Gavin Newsom in 2010 (Justin Sullivan/Getty Images)
June 20, 2024

California's supreme court on Thursday kicked a qualified anti-tax voter initiative off November's ballot, siding with Gov. Gavin Newsom (D.) and Democratic legislative leaders who filed an emergency petition to block it. Initiative backers are decrying the state supreme court ruling as an "absolute travesty" and blow to California's tradition of voters deciding policy through the ballot.

The supreme court's seven justices, all but one of whom were appointed by Democratic governors, said the ballot measure would take too much taxation power from the Legislature and declared that the measure's backers would have to try to call a constitutional convention to push their proposal. The initiative proposed requiring a two-thirds voter majority approval of any new state and local special taxes, which Democratic legislators argued would make it too hard to raise revenue for emergencies.

"The measure would fundamentally restructure the most basic of governmental powers," the ruling stated. "The [ballot measure] would exclude the levying of new taxes from the Legislature's control by requiring voter approval of all such measures."

The decision is a win for Newsom and Democratic leaders, even as they grapple with a $40 billion-plus deficit two years after spending a $100 billion surplus—along with voter worries over the state's poor economic conditions. Along with their taxpayer-funded move to block the ballot initiative, Democratic lawmakers also voted to put on November's ballot an initiative to make it harder for Californians to reject proposed tax hikes. A top legislator said Democrats still plan on putting this latter measure before the voters even after this court win.

Backers of the anti-tax proposal, who had gathered more than 1.4 million signatures to put it on November's ballot, blasted the ruling as anti-democratic and said they were already hearing concerns about the ruling's economic implications from business leaders and investors around the country.

"We're the highest-tax state in the country," said Rob Lapsley, co-chair of the committee behind the initiative, in a press conference following the ruling. "Be scared. It's only going to get worse."

He added that "there is no precedent to do what [the court] did today, to make a decision that disenfranchises voters."

Jon Coupal, the president of the tax watchdog group Howard Jarvis Taxpayers Association and another supporter of the initiative, called the decision "an absolute travesty."

"One of our allies sent me a text and said California has devolved into a banana republic," Coupal said. "I responded that that is an insult to banana republics."

Democrats meanwhile celebrated the ruling, with San Francisco state senator Scott Wiener (D.) calling the initiative "illegal & despicable." Newsom said he was "grateful" for the decision.

California has the highest per capita income tax, as well as the highest sales and gas tax rates in the nation. It placed dead last, however, out of the 50 states in WalletHub's March ranking of residents' "return on investment" on the taxes they pay. The state's governance also drew fire after California's auditor reported that officials failed to track the $24 billion they spent to address a homeless crisis that has only grown worse.

A poll released last week by the nonpartisan Public Policy Institute of California, meanwhile, found that the economy and affordability top the list of voters' worries, as a majority say the state is "headed in the wrong direction."