June 22, 2024 - The Rural County Representatives of California (RCRC) reports the “Taxpayer Protection and Government 
Accountability Act” (TPA) was an initiative sponsored by the California Business Roundtable, which obtained enough signatures to qualify for the November 2024 ballot. The TPA would have made numerous changes to the process set forth in the state constitution for enacting state and local taxes, with far reaching consequences for every level of government, including rural counties.
The measure was challenged by Governor Newsom and the Legislature, who sued in the California Supreme Court alleging that constitutional changes made by the TPA were so significant that they crossed the line from an ordinary "amendment" (which may be made by initiative) to a wholesale constitutional "revision" (which must be proposed to the voters either by supermajority vote of the Legislature or by a constitutional convention).
The State Supreme Court agreed that "[t]he changes proposed by the TPA...would substantially alter our basic plan of government" and therefore "the proposal cannot be enacted by initiative," and ordered that the TPA be removed from the November ballot.
The Court focused on three specific areas in which "the TPA would transform" the state constitution:
-
The proposed requirement that the Legislature obtain voter approval for any new state taxes;
-
the proposed requirement that any new state "exempt charges" (e.g., user fees) be approved by the Legislature (and thus subject to referendum), rather than by administrative agencies; and
-
the proposed restrictions upon "the authority of local government agencies to set fees without legislative approval or the possibility of referendum."
With respect to the first area, the court held that "requiring any new or higher [state] tax levy to undergo voter approval would significantly alter the existing constitutional balance between direct democracy and representative democracy, with reverberations throughout the framework of our government...the TPA would substantially transform the process for enacting new statewide tax legislation that has existed since the state’s founding and...this transformation weighs significantly in favor of finding that the TPA would effect a constitutional revision."
In the second area, the court similarly found that “the TPA would significantly rework the current balance between legislative and executive functions." "[T]he Legislature today is authorized to decide whether to set certain fees itself or to delegate the task to various agencies...legislative delegation of power to administrative agencies is permissible, widespread, and fundamental to the operation of government...Shifting the authority to impose any such fees or other charges from administrative agencies to the Legislature would materially reshape the nature and volume of the Legislature’s everyday work and its overall function and efficacy in our system of governance."
In the third area, the Supreme Court's approach to the TPA's various restrictions upon local taxes and fees was more restrained. The court noted that "[t]o the extent that the TPA would subject local tax measures to heightened voter approval requirements or make local governments more dependent on appropriations from the Legislature, we conclude that these changes by themselves have limited significance." However, the Court was more concerned with the proposed requirement that all local "exempt charges" must be approved by the agency's governing body (and thus be subject to referendum). "By substantially altering the power of local governments to delegate decision-making authority to their own agencies, the TPA would operate in a manner dissimilar to any of the prior initiatives that have restricted local governments’ ability to raise revenue...[R]eassignment of local fee-setting from administrative to legislative processes would substantially alter the processes by which local governments raise revenue and, in so doing, would significantly alter the work of local government itself." "Such changes would substantially overhaul how local governments go about ensuring that everyday services are properly provided. In sum, the TPA would affect all local revenue measures — big or small, essential or nonessential — to an extent that leaves no aspect of government untouched."
The court was careful to note that it was deciding "only whether the measure, taken as a whole, would accomplish a revision. Whether any individual component of the TPA would constitute a revision standing alone is a question we do not answer here." Therefore, although the TPA will not appear on the November 2024 ballot, the possibility remains open that some of these provisions may reappear as part of initiative measures presented at future elections.
ABOUT RURAL COUNTY REPRESENTATIVES OF CALIFORNIA (RCRC)
The Rural County Representatives of California (RCRC) is a thirty-seven member county strong service organization that champions policies on behalf of California’s rural counties. RCRC is dedicated to representing the collective unique interests of its membership, providing legislative and regulatory representation at the State and Federal levels, and providing responsible services for its members to enhance and protect the quality of life in rural California counties. To learn more about RCRC, visit rcrcnet.org and follow @RuralCounties on Twitter, Facebook and Instagram.
Source: RCRC
