Supreme Court Will Take Up CBRT Initiative Limiting Ability of Voters and State and Local Governments to Raise Revenue for Government Services

Michael G. Colantuono, Colantuono, Highsmith & Whatley, PC

The California Business Roundtable’s (CBRT) “Taxpayer Protection and Government Accountability Act” is slated for the November 2024 ballot. That measure would reverse nearly every appellate win for government under Propositions 13, 218, 26 and 62 in the last few decades and impose myriad restrictions on State revenues and essentially all local revenues from taxes to library fines to water rates. It requires two-thirds-voter approval for all special taxes, whether proposed by legislators or by initiative petition, reversing six recent Court of Appeal decisions allowing such taxes by majority vote.

The measure is nearly identical to one the California Business Roundtable traded for a multi-year ban on local soda taxes in 2018 and may have been intended as leverage to bargain for a ban on vehicle-miles-travelled taxes. Such a tax proposal was recently withdrawn by the San Diego Association of Governments. But the Legislature, perhaps annoyed at having to bargain to remove essentially the same proposal from the ballot a second time, responded with two attacks on the measure.

First, the Legislature, Governor Newsom, and former Senate President Pro Tem John Burton filed a petition in the original jurisdiction of the California Supreme Court for a writ of mandate ordering Secretary of State Shirley Weber to withhold the measure from the ballot. Such petitions are very rarely granted, as it is the role of the California Supreme Court to decide important legal issues, typically on appeal, and not as the first court to hear them. However, the petitioners, with support from amicus curiae, including the California Special Districts Association,  persuaded the Court to issue an order to show cause on November 29, 2023, which has the effect treating the petition like a pending appeal, inviting briefing of the merits, argument, and a decision. To decide the case by the late-June deadline to print ballots for the November 2024 election, the Court has ordered briefing in December and January, with amicus briefs due February 14th. The matter will likely be set for argument in March or April and a decision is likely by the June ballot-printing deadline. This order is very good news for all concerned about the impact of the California Business Roundtable’s proposal.

The  petition in Legislature v. Weber raises two issues. First, it argues the measure is an invalid revision of the State Constitution — which cannot be accomplished by initiative — rather than an amendment, which can. This is because the measure strips the Legislature and the Executive branch of important powers — requiring voter approval of all taxes, and requiring legislative action on all fees, even such things as a fee for a replacement driver’s license. The second claim is that the measure would impair essential governmental powers; here, the power to impose taxes, delegate fee-making procedures to the Executive branch, and for that branch to fully administer financial aspects of government programs.

The case should be decided by late June and further local government amicus support is likely, including from CSDA.

The Legislature’s second reaction to the measure is ACA 13 (Ward, D-San Diego). This constitutional amendment, also stated for the November 2024 ballot, would require any ballot measure that imposes a supermajority voting requirement to attain that same supermajority. As ACA 13 is retroactive, if a simple majority of voters approve it, the California Business Roundtable measure will require two-thirds voter approval — if it survives Legislature v. Weber. As the measure has drawn vigorous opposition, two-thirds approval may not be attainable.

Further developments on this policy dispute will come early next year. Stay tuned!