California Supreme Court to Weigh in on 2024 Tax Initiative Before it Even Gets to the Ballot

The California Initiative and Referendum process is no doubt a complicated one, rife with controversy and arguably in need of overhaul. I am normally astounded at what a California ballot looks like with not only choices for candidates at various levels of government available, but also with many ballot questions and their interpretive statements straining the bounds of what ought to be a single-page document. Throw in the occasional recall questions for a previously successful candidate for elective office and you have got a convoluted, time-consuming exercise in civic responsibility at hand.

Californians have a long history with direct democracy through the initiative and referendum process. While the Golden State was not the first to formalize I and R into the electoral process, the state has been one of the more prolific participants in the procedure since it was adopted here in 1911. Since then, 442 initiatives have been set before the voters and 158 have been approved for a 36% passage rate. The California Initiative process has allowed for amending the state constitution 57 times.

And where one might think that an approval directly by voters would be the final say-so on any matter, think again. Similar to indirect democracy where elected officials pass laws, successful ballot questions must ultimately pass muster with the judicial branch of government—both state and federal.

 Perhaps the most noteworthy occurrences where the judiciary stepped in to nullify the will of the people centered around the subject of same sex marriages in California. In 2000, Proposition 22 was passed overwhelmingly by the voters, and it forbade, through statute, recognizing or issuing licenses for same sex marriages. Proposition 22 was ultimately overturned as unconstitutional by the California Supreme Court. 

Subsequently, opponents of same sex marriage attempted to bypass the court’s previous ruling with Proposition 8 in 2008 that used the exact language of its Proposition 22 predecessor, but this time the intent was to actually amend the California State Constitution. It also passed, albeit with a slimmer margin, and this time the California Supreme Court upheld the initiative’s constitutionality. Ultimately, it was the federal courts that overturned Proposition 8, and of course the United States Supreme Court rendered all previous electoral and judicial actions on the matter moot with their Obergefel v. Hodges decision in 2015 which codified marriage equality in all fifty states.

Now, in a rare attempt to stifle the initiative and referendum process before a proposition even makes it to the ballot, Governor Gavin Newsom and state Democrats have petitioned the courts to declare as unconstitutional a proposed initiative that apparently has enough signatures to qualify for the November 2024 ballot. The initiative, which is supported by business leaders and taxpayer advocates, would require voter approval for all future state or local tax or fee hikes in California. 

While Newsom and Democrat legislators petitioned the court to prevent the initiative from making it to the ballot and thereby canceling the November 2024 vote, the justices were not prepared to take that preemptive step. Instead, they have asked the sponsors of the initiative to “show cause” as to why the vote should move forward and agreed to hold hearings on the matter which will take place early in 2024.

Normally, as with the same sex marriage propositions, the courts would weigh in following adoption by voters. In this case, state officials don’t want to risk the matter getting that far. This is with precedent, albeit rare. In 2018 the courts prevented an initiative getting to the ballot that would have divided California into three separate states.

From a legal perspective detractors of the initiative claim that the approval by voters would amount to a revision of the State Constitution which cannot be achieved by initiative. A revision of the Constitution would instead require a two thirds legislative approval before being submitted before voters. Proponents of the initiative contend that the proposal amounts to an addition to the Constitution and is worthy of a direct vote by voters. This, of course, is all to be sorted out by the Supreme Court next year.

As a practical matter, Newsom and state Democrats contend that the initiative, if passed, would hamstring state government and their ability to conduct everyday business. Omar Rodriguez, a spokesman for the Newsom administration wrote in a statement:

“This radical effort led by wealthy business interests impermissibly seeks to restructure our             system of government in a way that will hobble the state’s ability to respond to future crises.”

Of equal concern for those in government would be the retroactive nature of the initiative. If passed, the initiative would apply to all taxes and fees raised by state and local governments from the beginning of 2022. Those increases would be cancelled until set before voters for approval. Mayors of several of the state’s largest cities including Oakland, San Jose, and San Francisco wrote in a filing before the court that:

“Our cities will be forced to reassess and potentially slash lawfully adopted budgets.”

State officials said the retroactive nature of the proposal would affect 15 state bills already signed by Governor Newsom since the beginning of 2022 and 131 local initiatives that similarly raise taxes and fees during this time period.

Proponents of the measure were not pleased with the court acting before the voters have a chance to voice their opinion at the polls. Rob Lapsley, President of the California Business Roundtable said the Court’s intervention at this juncture:

“threatens the voters’ constitutional right to act as a check and balance on the                               governor and legislature.”

“We will continue to defend the right and voice of voters to the Court and ensure that this highly popular and much-needed measure appears before voters next November.”

One must wonder what is really motivating Newsom and state-wide Democrats to seek this nearly unprecedented early intervention by the Court and prevent the measure ever making it on the ballot. Certainly, the thought of curtailing government’s ability to raise taxes and fees is anathema to any liberal politician—especially at a time where the state’s budget deficit has ballooned to $68 billion.

Yet, in an ever-bluer state like California, what do Newsom and fellow Democrats have to fear from hearing from the public on this issue? Certainly, blue-state voters would never opt via ballot initiative to curb their Democrat governor and other elected officials’ ability to impose taxes—especially when those elected officials proclaim that any new tax burden would fall primarily on the rich. And even if the measure passed, it is a sure thing that if given the opportunity to directly vote on a new tax proposal, blue-state voters would flood the polls in support of new tax levies, right?

Not so fast. Blue-state voters simply don’t operate that way and Democrat officials in Sacramento and across the state know it. Time after time, California voters have surprised us with something other than liberal outcomes on ballot initiatives. Given the opportunity to force new tax proposals to go before the voters, California taxpayers are likely to vote in favor. Moreover, as a result of the likely passage of such an initiative, once any new tax proposal comes before the voters there’s a better than good chance that those very same voters will head to the polls with both thumbs down.

Quite simply, Newsom and his Democrat cohorts do not trust their otherwise supportive minions to do the “right thing” here. Liberal voters are pretty certain what they’d like their government to provide for them. Problem is, they’re never quite sure how to pay for it, and tax and spend politicians in Sacramento and beyond simply cannot take any chances here and seek the Court’s assistance before things really get out of hand.