Cal Cities, CSAC Fight to Keep Anti-Tax Measure Off 2024 Ballot

A coalition of local government associations has filed an amicus brief supporting Gavin Newsom’s emergency petition with the California Supreme Court to remove the Taxpayer Protection and Accountability Act (TPAA) from the November 2024 Ballot.

What TPAA Does

In 2020, the Court of Appeal in San Francisco issued a blockbuster decision on the threshold needed for special taxes imposed through citizens initiatives. In City and County of San Francisco v. All Persons Interested in the Matter of Proposition C, the court held that a two-thirds voting majority is only necessary for special tax initiatives put forth by governments. In the case of a special tax measure placed on the ballot by voters, a simple majority will suffice. That decision was effectively upheld by the state Supreme Court when it refused to hear a legal challenge.

Sponsored by the California Business Roundtable, the TPAA would reinstate the two-thirds threshold for all special taxes. But that’s not all. This initiative would require voter approval for any increase in state or local taxes. It would also expand the definition of a tax to include what many governments consider fees. New restrictions on local taxes and fees would apply retroactively to Jan. 1, 2022. That means any taxes and fees passed after Jan. 1, 2022 that don’t meet the measure’s requirements would be void unless reinstated by voters.

TPAA supporters say the measure is necessary to give voters a voice and stop the soaring cost of living in California.

“In 2023 alone, Sacramento politicians proposed $204 billion in higher taxes and fees in California despite having the highest income tax, state sales tax and gas tax in the country,” according to the website.

The State Intervenes

The measure has qualified for the November 2024 ballot. Whether it will ultimately go before voters is now in the hands of the legal system, however.

Last month, Gov. Gavin Newsom and state lawmakers filed an emergency petition with the state Supreme Court seeking to have the initiative kept off the ballot.

TPAA “is unlike any measure that has ever gone before the voters with respect to the sweeping changes it would make to California’s fundamental government structure, the foundational power of its branches and the government’s ability to provide the essential government functions required by a functioning state,” lawyers for Newsom and the Legislature wrote.

The changes are so sweeping that the petitioners say they would amount to an overhaul of the state Constitution.

An Existential Threat to Local Governments?

On Sept. 28, amicus support for the petition was filed by attorney Michael G. Colantuono on behalf of the California Association of Sanitation Agencies (CASA), the California Municipal Utilities Association (CMUA), the California Special Districts Association (CSDA), the California State Association of Counties (CSAC) and the League of California Cities (Cal Cities).

“The proposed measure creates significant uncertainty for local government finance” and “will affect nearly every revenue source,” according to the coalition.

“This measure has far more serious implications for local government financial stability than did Proposition 13, which affected only ad valorem property taxes,” the filing states.

According to Cal Cities, the measure would threaten an estimated $2 billion in existing fees and charges, plus another $2 billion in voter-approved measures. Cal Cities calls TPAA an "existential threat to government operations."

“If this measure passes, it will upend and jeopardize city revenue streams needed to provide essential local services,” said Cal Cities Executive Director and CEO Carolyn Coleman. “Our residents expect and rely upon fire, police, and a wide range of other services — including shelter for those experiencing homelessness, safe streets and roads, the maintenance of playgrounds and sidewalks, and garbage removal. But with this measure, residents will get less.”