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Amazon’s referendum will test whether Prop 25 undermines the voters

Loren Kaye
President of the California Foundation for Commerce and Education

The referendum filed yesterday by a representative for Amazon to
repeal the law applying sales taxes to certain online
purchases would have a small effect on the state budget, if successful.

But if the referendum appears on a ballot, it would
make a major statement about one of the most important untested aspects of last
year’s Proposition 25. This measure is best known as
permitting the state budget and appropriations to be approved by a simple
majority vote of the Legislature, and withholding pay and expenses from
legislators if they miss the June 15 deadline to pass a budget.

During last year’s campaign on Prop 25 I argued that the measure could also threaten the
very existence of the people’s referendum power; that is, the ability of voters
to reject at a statewide election a statute passed by the Legislature. Simply
stated, I suggested that the creation of a new category of budget-related
bills, which can take effect immediately but be passed by a majority vote of
the Legislature, might insulate virtually any bill from the threat of
referendum. Prior to Prop 25, the only measures insulated from the referendum
were those passed by a two-thirds vote of the Legislature – a high standard
requiring substantial legislative consensus.

Prop 25 proponents countered that the measure does not
strip voters of their referendum rights, arguing that the Legislature could not
"add in" other non-appropriation provisions to prevent a referendum.

So much for the political claims – now the case gets
real.

The test of
these arguments will presumably happen very soon, when the Attorney General
must provide a circulating title and summary for the petitions – or not. And if
AG Harris does permit the petitioners to proceed, the next test would be whether
the Secretary of State certifies the measure for the ballot if a sufficient
number of petitions are submitted to county registrars. And finally, a key test
of the measure will be whether the Board of Equalization considers the statute
now suspended, since the Constitution holds statutes in abeyance once a
referendum commences.

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