Election law changes? Our legislation tracker’s got you. Check it out!

California Two-Thirds Legislative Vote and Voter Approval for New or Increased Taxes Initiative (2024)

From Ballotpedia
Jump to: navigation, search
California Two-Thirds Legislative Vote and Voter Approval for Fee and Charge Increases Initiative
Flag of California.png
Election date
November 5, 2024
Topic
Direct democracy measures and Taxes
Status
Not on the ballot
Type
Constitutional amendment
Origin
Citizens

The California Two-Thirds Legislative Vote and Voter Approval for Fee and Charge Increases Initiative (#21-0042) was not on the ballot in California as an initiated constitutional amendment on November 5, 2024.[1]

A "yes" vote would have supported amending the state constitution to define all state and local levies, charges, and fees as taxes and to require new state taxes proposed by the state legislature to be enacted via a two-thirds legislative vote and voter approval and new local taxes to be enacted via a two-thirds vote of the electorate.

A "no" vote would have opposed amending the state constitution, thereby maintaining that new state taxes require a two-thirds vote in each legislative chamber or a simple majority vote of electors and new or increased local taxes require approval of the local governing board as well as voter approval.


Removed from the ballot

On June 20, 2024, the California Supreme Court unanimously ruled that the initiative amounts to a revision of the state constitution and is therefore unconstitutional and cannot go before voters in November. Justice Goodwin Liu said, "[The initiative] would substantially alter our basic plan of government, the proposal cannot be enacted by initiative."[2]

Lawsuit

  
Lawsuit overview
Issue: Whether the initiative revises rather than amends the state constitution
Court: California Supreme Court
Ruling: The initiative revises the state constitution and is therefore unconstitutional and cannot be placed on the November ballot.
Plaintiff(s): Gov. Gavin Newsom (D) and John BurtonDefendant(s): Thomas W. Hiltachk
Plaintiff argument:
The initiative unconstitutionally revises the state constitution and therefore should not be on the ballot.
Defendant argument:
The initiative is a valid initiated constitutional amendment.

  Source: California Supreme Court

On September 26, 2023, the state legislature, Gov. Gavin Newsom (D), and John Burton filed an emergency petition with the state Supreme Court seeking to remove the initiative from the ballot. The petition argues that the initiative tries to revise rather than amend the state constitution.[3]

Speaker Robert Rivas (D—29) and Senate President pro Tem Toni Atkins (D—39) said the initiative is an "unlawful effort to revise our state constitution" which "seeks to eliminate the state’s ability to swiftly respond to emergencies and provide resources for critical services that Californians and communities rely upon."[4]

Hector Barajas, a spokesperson for the Taxpayer Protection Act campaign, said the lawsuit is a "politically motivated attempt to keep the highly popular measure off the ballot by taking the extreme action of demanding the Court disenfranchise voters and denying them their lawful right to amend the California Constitution."[4]

After the June 20 ruling, Rob Lapsley, president of the California Business Roundtable, Jon Coupal, president of the Howard Jarvis Taxpayers Association, and Matthew Hargrove, president and CEO of the California Business Properties Association said, "Direct democracy and our initiative process are now at risk with this decision, showing California is firmly a one-party state where the governor and Legislature can politically influence courts to block ballot measures that threaten their ability to increase spending and raise taxes."[2]

Overview

How would the initiative have changed the voter threshold for new or increased taxes?

See also: Measure design

The initiative would have amended the California Constitution to define all state and local levies, charges, and fees as taxes. The initiative would have also required new or increased taxes to be passed by a two-thirds legislative vote in each chamber and approved by a simple majority of voters. It would also have increased the vote requirement for local taxes proposed by local government or citizens to a two-thirds vote of the local electorate. The increased vote requirements for new or higher taxes would have not applied to citizen-initiated state ballot measures. As of 2024, state tax increases require approval by a two-thirds vote in each chamber or a simple majority vote at a statewide election.[1]

The table below describes the existing and proposed vote requirements for state and local tax changes.

Action Existing vote requirement Proposed vote requirement
State tax increase by state legislature Two-thirds legislative vote Two-thirds legislative vote and simple majority of voters
State tax decrease by state legislature Simple majority legislative vote No change
State tax increase by citizen initiative Simple majority of voters No change
Local general tax increase by local board Two-thirds vote by governing board and simple majority of voters No change
Local special tax increase by local board Two-thirds vote by governing board and two-thirds vote by voters No change
Local special tax increase by citizen initiative Simple majority of voters Two-thirds of voters

Who supported and opposed the initiative?

See also: Support and Opposition

Californians for Taxpayer Protection and Government Accountability is leading the campaign in support of the initiative. The campaign was endorsed by the California Business Roundtable, California NAIOP, and the Howard Jarvis Taxpayers Association. The campaign has received $17.8 million in contributions. The campaign explained the initiative, saying, "The Taxpayer Protection and Government Accountability Act will give voters the right to vote on all future state taxes and holds politicians accountable for new fees and other increased costs paid by working families and all Californians. The measure increases accountability by requiring politicians to spend new or higher tax revenue on its intended purpose. It will provide much-needed relief to families, farmers, and business owners, helping them to combat the growing cost-of-living crisis facing all Californians."[5]

AFSCME California, SEIU California State Council, California Special Districts Association, California State Association of Counties, and League of California Cities oppose the initiative. Graham Knaus, executive director of the California State Association of Counties (CSAC), said, "This deceptive initiative would undermine the rights of local voters and their elected officials to make decisions on critical local services that residents rely upon. It creates major new tax loopholes at the expense of residents and will weaken our local services and communities."[6]

Measure design

See also: Text of measure

Click on the arrows (▼) below for summaries of the different provisions of the initiative.

Tax definition: Definition of state and local tax in state constitution

The initiative would have amended the California Constitution to state that "every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt charge" and defined local taxes in the same manner. The amendment would have required the law proposing or increasing a tax to include the duration of the imposition of the tax, an estimate of the annual revenue from the tax, a statement regarding the use of the revenue whether for specific or general purposes, and the ballot title and summary for the tax measure question. An exempt charge would have been excluded from the proposed requirements for new or increased taxes.[1]

The initiative would have defined an exempt charge as:[1]

  • a reasonable charge that does not exceed the cost of a specific government service provided only to payors;
  • a charge equal to the regulatory costs for the state to issue licenses and permits; perform investigations, inspections, and audits; and enforce agricultural marketing orders;
  • a charge collected by local governments, health care providers or service plans used to fund the non-federal portion of the Medi-Cal program;
  • a reasonable charge for entrance, use, rental, purchase, or lease of state property;
  • a fine or penalty imposed by the judiciary branch or state administrative enforcement agency as a result of a violation of law; and
  • a charge for the promotion of California tourism according to state law.

The initiative would have placed the burden of proof on the state to present clear and convincing evidence that a charge is an exempt charge and not a tax and that the exempt charge does not exceed the actual cost of providing the service or product to the payor.

Supermajority vote requirements for taxes: Increase in vote requirements for state and local taxes

Under the amendment, new or increased taxes would have been passed by a two-thirds legislative vote in each chamber and approved by a simple majority of voters. The amendment would have also increased the vote requirement for local taxes proposed by local government or citizens to a two-thirds vote of the local electorate. The increased vote requirements for new or higher taxes would have not applied to citizen-initiated state ballot measures.

As of 2024, state tax increases required approval by a two-thirds vote in each chamber or a simple majority vote at a statewide election. Taxes could be reduced with a simple majority legislative vote.[1]

For local tax increases, the state constitution required a two-thirds vote by the local governing body to place the measure on the ballot as of 2024. If the tax is for a general purpose, it needed a simple majority vote by the local electorate. If the tax is for a special specific purpose, it needed a two-thirds vote by the local electorate. For citizen-initiated local tax measures, the case law surrounding Proposition 218 (1996) has ruled that a simple majority, not a two-thirds vote, is required to pass such measures.[7]

The initiative would have also prohibited local governments from placing a non-binding advisory question on the same ballot as a general tax proposal asking how the revenue should be spent.


Text of measure

Ballot title

The ballot title would have been as follows:[8]

Limits Ability of Voters and State and Local Governments to Raise Revenues for Government Services. Initiative Constitutional Amendment.[9]

Petition summary

The summary provided for inclusion on signature petition sheets was as follows:[8]

For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters’ ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds. Eliminates voters’ ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax. Expands definition of 'taxes' to include certain regulatory fees, broadening application of tax approval requirements. Requires Legislature or local governing body set certain other fees.[9]

Fiscal impact

The fiscal impact statement was as follows:[8]

Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.[9]

Full text

The full text of the ballot measure is below:[8]

Support

Taxpayer-Protection-Logo.png

Californians for Taxpayer Protection and Government Accountability led the campaign in support of the initiative.[5]

Supporters

Organizations

Arguments

  • Californians for Taxpayer Protection and Government Accountability: "The Taxpayer Protection and Government Accountability Act will give voters the right to vote on all future state taxes and holds politicians accountable for new fees and other increased costs paid by working families and all Californians. The measure increases accountability by requiring politicians to spend new or higher tax revenue on its intended purpose. It will provide much-needed relief to families, farmers, and business owners, helping them to combat the growing cost-of-living crisis facing all Californians."
  • Rob Lapsley, president of the California Business Roundtable: "They should be afraid because the people of California are fed up. This gives the people of California the right to vote on future taxes, and voters are going to support it if it’s on the ballot."


Opposition

Opponents

Officials

Former Officials

Political Parties

Unions

Organizations

  • California Alliance for Jobs
  • California Contract Cities Association
  • California Special Districts Association
  • California State Association of Counties
  • League of California Cities
  • Rebuild SoCal Partnership

Arguments

  • Michael Hiltzkik, columnist for the Los Angeles Times: "Taxes and fees are imposed by voters, either directly at the ballot box or through the election of community leaders who can be voted out of office. It’s the promoters of the new initiative who are operating in the shadows. They’re not telling you who their moneybags are. They’re certainly not explaining how the measure will benefit their big donors at the expense of residents, who expect decent local services and are vulnerable to the siren song that they can get all the services they wish without paying for them."
  • Nicolas Romo, a revenue and taxation expert at the League of California Cities: "It would undermine voters’ rights and create major loopholes for corporations to avoid paying their fair share."
  • Graham Knaus, executive director of the California State Association of Counties (CSAC): "This deceptive initiative would undermine the rights of local voters and their elected officials to make decisions on critical local services that residents rely upon. It creates major new tax loopholes at the expense of residents and will weaken our local services and communities."


Campaign finance

See also: Campaign finance requirements for California ballot measures
The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed, which covered through March 31, 2024.


Ballotpedia identified one committee registered in support of the initiative—Californians for Taxpayer Protection and Government Accountability. The committee reported $17.8 million in contributions.[10]

Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Support $17,804,119.41 $36,344.90 $17,840,464.31 $17,765,905.08 $17,802,249.98
Oppose $0.00 $0.00 $0.00 $0.00 $0.00
Total $17,804,119.41 $36,344.90 $17,840,464.31 $17,765,905.08 $17,802,249.98

Support

The following table includes contribution and expenditure totals for the committee in support of the measure.[10]

Committees in support of Two-Thirds Legislative Vote and Voter Approval for New or Increased Taxes Initiative
Committee Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Californians for Taxpayer Protection and Government Accountability $17,804,119.41 $36,344.90 $17,840,464.31 $17,765,905.08 $17,802,249.98
Total $17,804,119.41 $36,344.90 $17,840,464.31 $17,765,905.08 $17,802,249.98

Donors

The following were the top donors who contributed to the support committee.[10]

Donor Cash Contributions In-Kind Contributions Total Contributions
California Business Roundtable Issues PAC $8,345,000.00 $0.00 $8,345,000.00
AMR Holdco $3,100,000.00 $0.00 $3,100,000.00
Douglas Emmett Properties $1,500,000.00 $0.00 $1,500,000.00
Kilroy Realty LP $1,500,000.00 $0.00 $1,500,000.00
Michael K. Hayde, including Western National Group & affiliated entities $1,400,000.00 $0.00 $1,400,000.00

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Background

Constitutional definition of a tax

See also: Section 3, Article XVIII A of the California Constitution

As of 2024, Section 3 of Article XVIII A of the California Constitution defined a tax as:

[A]ny levy, charge, or exaction of any kind imposed by the state, except the following:
(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of conferring the benefit or granting the privilege to the payor.
(2) A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of providing the service or product to the payor.
(3) A charge imposed for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.
(4) A charge imposed for entrance to or use of state property, or the purchase, rental, or lease of state property, except charges governed by Section 15 of Article XI.
(5) A fine, penalty, or other monetary charge imposed by the judicial branch of government or the State, as a result of a violation of law.[9]

The section required that any increase to a tax be imposed by a law passed by two-thirds of all members of the state legislature. The constitution puts the burden on the state to provide evidence that a charge is not a tax; and therefore not subject to the two-thirds vote requirement.

Vote requirements for tax changes

The state constitution and case law govern the vote requirements needed to increase or decrease state and local taxes. The table below describes the existing and proposed vote requirements for state and local tax changes.

Action Existing vote requirement Proposed vote requirement
State tax increase by state legislature Two-thirds legislative vote Two-thirds legislative vote and simple majority of voters
State tax decrease by state legislature Simple majority legislative vote No change
State tax increase by citizen initiative Simple majority of voters No change
Local general tax increase by local board Two-thirds vote by governing board and simple majority of voters No change
Local special tax increase by local board Two-thirds vote by governing board and two-thirds vote by voters No change
Local special tax increase by citizen initiative Simple majority of voters Two-thirds of voters

California Proposition 218, Voter Approval Requirement for Local Tax Increases Initiative (1996)

See also: California Proposition 218 (1996)

In 1996, California voters approved Proposition 218 by a vote of 56.5% to 43.5%. Proposition 218 required local governments to refer ordinances to impose taxes or property-related assessments, fees, and charges to the ballot for voter consideration. It also required that elections for general taxes be held at regulation elections and required a two-thirds supermajority vote of approval for special taxes.

Lawsuits regarding Proposition 218 vote requirements

An August 2017 California Supreme Court decision raised questions about how to interpret the constitutional voting requirements for special taxes proposed through citizen initiatives.

California voters approved Proposition 218 in 1996, adding Article XII C Voter Approval For Local Tax Levies to the California Constitution. The article includes the requirement that local governments may only enact, extend, or increase a special tax with a two-thirds (66.67%) vote of the electorate.[11][12] Following the passage of Proposition 218, the two-thirds supermajority vote requirement was applied to legislative referrals, referendums, and citizen initiatives.

In August 2017, however, the California Supreme Court ruled in California Cannabis Coalition v. City of Upland that one requirement contained in Article XIII C—that general taxes must be put on the ballot during general elections—did not apply to citizen initiatives. The court categorized taxes imposed by citizen initiatives as separate from taxes imposed by local governments. This ruling brought the two-thirds (66.67%) vote requirement into question for special taxes proposed through citizen initiatives.

City and county officials in San Francisco argued that the court's 2017 decision meant that a simple majority—not a two-thirds supermajority—was required for the approval of local citizen initiatives, including tax measures that designate funds for specific purposes. Based on those arguments, the city certified the measures as approved. The Howard Jarvis Taxpayers Association filed a lawsuit against the city and county in August 2018 stating that the Proposition C, a commercial rent tax for childcare initiative, did not receive sufficient votes because it needed a two-thirds supermajority vote.[13]

On January 27, 2021, the First District Court of Appeal ruled that the supermajority requirement did not apply to Proposition C and only applied to measures placed on the ballot by the city council, board of supervisors, or school board.[14]

Path to the ballot

See also: Laws governing the initiative process in California

Process in California

In California, the number of signatures required for an initiated constitutional amendment is equal to 8 percent of the votes cast in the preceding gubernatorial election. Petitions are allowed to circulate for 180 days from the date the attorney general prepares the petition language. Signatures need to be certified at least 131 days before the general election. As the verification process can take multiple months, the secretary of state provides suggested deadlines for ballot initiatives.

The requirements to get the initiative certified for the ballot:

Signatures are first filed with local election officials, who determine the total number of signatures submitted. If the total number is equal to at least 100 percent of the required signatures, then local election officials perform a random check of signatures submitted in their counties. If the random sample estimates that more than 110 percent of the required number of signatures are valid, the initiative is eligible for the ballot. If the random sample estimates that between 95 and 110 percent of the required number of signatures are valid, a full check of signatures is done to determine the total number of valid signatures. If less than 95 percent are estimated to be valid, the initiative does not make the ballot.

Initiative #21-0042

Thomas W. Hiltachk filed the ballot initiative on November 30, 2021.[15] The Attorney General of California issued ballot language for the initiative on February 3, 2022, allowing a signature drive to begin. Signatures were due on August 2, 2022.

On March 16, 2022, the sponsors of the initiative reported to the secretary of state that the campaign had collected at least 25% of the required number of signatures.[16]

On May 12, the campaign announced that proponents would target the 2024 ballot.[17]

On August 26, 2022, the secretary of state reported that sponsors had submitted over 1.4 million signatures.[18]

On November 7, 2022, a court directed counties to finish a full check of the signatures submitted 30 days after the certification of the November 8, 2022, election results instead of the original deadline of November 10, 2022.[19]

On February 1, 2023, the secretary of state announced that the initiative had qualified for the ballot. The final full check found that the campaign had submitted 1,075,585 valid signatures.[20]

Lawsuit

  
Lawsuit overview
Issue: Whether the initiative revises rather than amends the state constitution
Court: California Supreme Court
Ruling: The initiative revises the state constitution and is therefore unconstitutional and cannot be placed on the November ballot.
Plaintiff(s): Gov. Gavin Newsom (D) and John BurtonDefendant(s): Thomas W. Hiltachk
Plaintiff argument:
The initiative unconstitutionally revises the state constitution and therefore should not be on the ballot.
Defendant argument:
The initiative is a valid initiated constitutional amendment.

  Source: Cal Cities

On September 26, 2023, the state legislature, Gov. Gavin Newsom (D), and John Burton filed an emergency petition with the state Supreme Court seeking to remove the initiative from the ballot. The petition argues that the initiative tries to revise rather than amend the state constitution.[21]

Speaker Robert Rivas (D—29) and Senate President pro Tem Toni Atkins (D—39) said the initiative is an "unlawful effort to revise our state constitution" which "seeks to eliminate the state’s ability to swiftly respond to emergencies and provide resources for critical services that Californians and communities rely upon."[4]

Hector Barajas, a spokesperson for the Taxpayer Protection Act campaign, said the lawsuit is a "politically motivated attempt to keep the highly popular measure off the ballot by taking the extreme action of demanding the Court disenfranchise voters and denying them their lawful right to amend the California Constitution."[4]

On June 20, 2024, the California Supreme Court unanimously ruled that the initiative amounts to a revision of the state constitution and is therefore unconstitutional and cannot go before voters in November. Justice Goodwin Liu said, "[The initiative] would substantially alter our basic plan of government, the proposal cannot be enacted by initiative."[2]

Rob Lapsley, president of the California Business Roundtable, Jon Coupal, president of the Howard Jarvis Taxpayers Association, and Matthew Hargrove, president and CEO of the California Business Properties Association said, "Direct democracy and our initiative process are now at risk with this decision, showing California is firmly a one-party state where the governor and Legislature can politically influence courts to block ballot measures that threaten their ability to increase spending and raise taxes."[2]

How to cast a vote

See also: Voting in California

See below to learn more about current voter registration rules, identification requirements, and poll times in California.


See also

External links

Footnotes

  1. 1.0 1.1 1.2 1.3 1.4 California Attorney General, "Initiative 21-0042," November 30, 2021
  2. 2.0 2.1 2.2 2.3 Cal Matters, "High court blocks anti-tax measure from California ballot," June 20, 2024
  3. Bloomberg Tax, "Newsom Asks High Court to Kick Anti-Tax Measure Off 2024 Ballot," September 26, 2023
  4. 4.0 4.1 4.2 4.3 CAP Radio, "Why Newsom and California lawmakers want the state Supreme Court to remove a 2024 ballot proposition," November 20, 2023
  5. 5.0 5.1 Taxpayer Protection, "Home," accessed May 19, 2022
  6. Gold Rush Cam, "League of California Cities Says Opposition Mounts to Wealthy Corporation-Backed Ballot Measure Threatening Voter Rights and Local Services," March 31, 2022
  7. Legislative Analyst's Office, "Initiative 42 analysis," accessed May 4, 2022
  8. 8.0 8.1 8.2 8.3 California Secretary of State, "Initiatives and Referenda Cleared for Circulation," accessed October 20, 2021
  9. 9.0 9.1 9.2 9.3 9.4 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  10. 10.0 10.1 10.2 Cal-Access, "Californians for Taxpayer Protection and Government Accountability," accessed April 15, 2022
  11. Article XII C of the California Constitution defines a special tax as “any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.”
  12. California Legislative Information, “California Constitution, Article XIII C, Voter Approval For Local Tax Levies,” accessed December 8, 2021
  13. The San Francisco Chronicle, "Judge says SF correct in passing two tax measures on simple majority vote," July 5, 2019
  14. San Francisco Chronicle, "Calif. appeals court upholds S.F.'s commercial rent tax to pay for children's services," accessed February 11, 2021
  15. California Secretary of State, "Initiatives," accessed November 30, 2021
  16. California Secretary of State, "25% Signature Threshold Certification for Initiative 21-0042," accessed March 24, 2022
  17. Bloomberg Tax, "California Vote to Raise Bar for Tax Increases Delayed to 2024," May 12, 2022
  18. California Secretary of State, "Random sample," accessed August 26, 2022
  19. California Secretary of State, "Judgment," accessed November 9, 2022
  20. California Secretary of State, "Full check," accessed February 2, 2023
  21. Bloomberg Tax, "Newsom Asks High Court to Kick Anti-Tax Measure Off 2024 Ballot," September 26, 2023
  22. California Secretary of State, "Section 3: Polling Place Hours," accessed August 12, 2024
  23. California Secretary of State, "Voter Registration," accessed August 13, 2024
  24. 24.0 24.1 California Secretary of State, "Registering to Vote," accessed August 13, 2024
  25. California Secretary of State, "Same Day Voter Registration (Conditional Voter Registration)," accessed August 13, 2024
  26. SF.gov, "Non-citizen voting rights in local Board of Education elections," accessed November 14, 2024
  27. Under federal law, the national mail voter registration application (a version of which is in use in all states with voter registration systems) requires applicants to indicate that they are U.S. citizens in order to complete an application to vote in state or federal elections, but does not require voters to provide documentary proof of citizenship. According to the U.S. Department of Justice, the application "may require only the minimum amount of information necessary to prevent duplicate voter registrations and permit State officials both to determine the eligibility of the applicant to vote and to administer the voting process."
  28. California Secretary of State, "What to Bring to Your Polling Place," accessed August 12, 2024
  29. BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS, "Section 20107," accessed August 12, 2024
  30. Democracy Docket, "California Governor Signs Law to Ban Local Voter ID Requirements," September 30, 2024