On Thursday, June 20, 2024, the California Supreme Court ruled that the Taxpayer Protection and Government Accountability Act (the "TPA") will not appear on the November 2024 election ballot. Governor Gavin Newsom and state Democratic leaders filed the lawsuit to remove the measure from the ballot.
The TPA is a broad initiative to hamper the California state and local legislative authorities' ability to raise state and local taxes by increasing voter approval thresholds. In particular, the proposed initiative would have required that any state tax increases be approved not only by supermajorities in the Legislature but also by a majority of the state's voters and any local special taxes would have to be approved by a two-thirds supermajority of voters. Any local special taxes that passed without a two-thirds vote from and after January 1, 2022, would be nullified unless the local legislature secured two-thirds of the voters' approval within one year after the TPA's enactment.
All of the Justices concurred that the TPA is tantamount to a revision of the state constitution, rather than a constitutional amendment. According to the Court's opinion, the measure would fundamentally restructure the most basic governmental powers and would exclude the levying of new taxes from the legislature's control by requiring voter approval of all such measures. Therefore, because the TPA would be a constitutional revision, the Court ruled that the TPA could not be enacted via voter initiative. The Court issued a writ of mandate directing California's Secretary of State to not include the TPA on the November 2024 election ballot or in the voter information guide.
The Court's decision is another setback for interest groups seeking to reverse the City of Los Angeles' Homelessness and Housing Solutions Tax (the "HHS Tax"). As outlined in our prior Alert, the HHS tax imposed an additional tax on transfers of property in the City of Los Angeles for purchase prices exceeding $5,000,000.
This decision effectively ends the fight over the TPA, but the various industry groups that sponsored the TPA are committed to raising taxpayer protection issues in the future.
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