New majority vote tax threat

Loren Kaye
President of the California Foundation for Commerce and Education

How frantic are
Democrats in the Legislature to place a tax measure on a special election
ballot? If negotiations with legislative Republicans break down for good,
Democrats might just be desperate enough to assert new legal authority that
would bypass existing constitutional protections.

As I’ve noted earlier, the Constitution grants the
Legislature three mechanisms by which they can place a question before the
voters:  proposing a general obligation bond or constitutional amendment,
each of which requires a two-thirds vote of the Legislature, or proposing an
amendment to a statute that was approved by voter initiative, which requires a
simple majority vote of the Legislature. The latter two mechanisms could be
used to present to the voters the tax extension question. The Governor has
proposed and is still supporting a constitutional amendment, ACA 2 in the first extraordinary session.
However, legal scholars have construed the initiative amendment authority to be
quite narrow, and Democrats in the Legislature seem to be backing away from
that route to the ballot.

Instead, legislative backrooms are buzzing about a third
way: assertion of the Legislature’s organic power to pass statutes that is
unconstrained by the Constitution’s enumeration of individual paths to the
ballot. That is, (1) the Legislature may pass a bill to enact a statute, (2)
the Legislature is not explicitly prohibited by the Constitution from placing a
statutory measure on the ballot, therefore (3) the Legislature may place a
statute calling the question of tax extensions on the ballot with a majority
vote. And to top it off, that bill can take effect immediately if it is
"related to the budget bill," as provided by Proposition
25
.

This path is obviously
fraught with legal controversy, for never has a statute been placed on a
California ballot in this manner – probably because the enumerated powers were
sensibly thought to be the extent of the Legislature’s authority. After all,
why bother specifying the individual cases if the Legislature’s authority is
sweeping?

The risk to proponents
of such a strategy is very high. First, getting to the ballot will face a
certain obstacle in a court challenge by taxpayers who would logically see this
as permanent threat. Every future ballot would regularly feature tax increase
proposals courtesy of statute passed by majority vote, twice and election year,
ad infinitum.  Second, the political risk of alienating taxpayers and
Republicans through a tricky ballot maneuver would add even more uncertainty to
a delicate political challenge.

For the record, I hope and expect the Governor
and both parties in the Legislature will complete a successful budget and
ballot negotiation. But if my prediction comes a cropper, Plan B had better not
include a majority vote ballot strategy.

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