California Democrats pass measure to thwart business effort to block tax increases

The Democratic-led California Legislature voted to place on the ballot an amendment to the state Constitution that seeks to thwart a business-led effort to make it harder to pass new taxes.

Lawmakers on Thursday passed Assembly Constitutional Amendment 13, which would require ballot initiatives that seek to increase voter thresholds under the California Constitution to meet that same higher bar in order to take effect.

The amendment, which will go before voters on the March primary ballot, is a direct response to an initiative called the Taxpayer Protection and Government Accountability Act. Led by the California Business Roundtable and the Howard Jarvis Taxpayers Assn., that act would require voter approval for all tax increases passed in Sacramento. New local special taxes also would require a two-thirds vote of approval by residents.

Here’s what you need to know:

1. How would voting thresholds change?

Let’s start with the basics.

California law provides two pathways to amend the state Constitution.

Through the Legislature, lawmakers can adopt a change through a two-thirds vote. Then voters need to approve that amendment with a majority vote — at least one vote over 50% in favor — during a statewide election for the change to become law.

Citizens also can organize to change the California Constitution under the statewide initiative process. To qualify a proposed amendment for the ballot, proponents must gather voter signatures in support of the change, equal to at least 8% of the total votes cast in the last gubernatorial election. If those signatures are verified, the measure similarly goes before voters and requires a majority vote in a statewide election.

In March, a group of business interests gathered enough signatures to qualify an initiative to increase the threshold for voter approval of tax increases.

If approved by voters on the November 2024 ballot, the measure would require all new taxes passed by the Legislature to be approved by a majority of voters. For new local special taxes, the bar would rise from a majority vote to two-thirds voter approval.

Democratic lawmakers with their labor union allies responded over the summer by introducing their own change to the Constitution in the Legislature with ACA 13.

This measure, which passed Thursday with the strong support of Assembly Speaker Robert Rivas (D-Hollister), would require that any measure passed through the signature-gathering initiative process that seeks to change the California Constitution to increase voter approval requirements on state or local measures would need to meet the same voter approval requirement. For example, if a measure seeks to raise voter approval from a majority vote to a two-thirds vote, the measure itself would also need support from two-thirds of voters in order to take effect.

ACA 13, dubbed the Protect and Retain the Majority Vote Act, would also allow local governments to hold advisory votes to understand voter opinions on an issue.

If approved by voters in March, ACA 13 would apply to constitutional amendments passed through the initiative process that go before voters after Jan. 1.

2. Sounds wonky. Why do unions and lawmakers want to change the thresholds?

ACA 13 is the latest example of political gamesmanship in the battle between progressive unions and conservative business interests at the state Capitol.

Defeating the business-backed ballot measure has become high priority for Democrats and their allies.

Service Employees International Union of California, which co-sponsored ACA 13, and a coalition that includes the League of California Cities and the California Teachers Assn. contend businesses are trying to deceive voters and undermine the will of communities to adopt their own measures. The coalition contends that the changes would result in millions of dollars in cuts to local public services.

“To be very blunt, we are here today because a very few special interests led by the California Business Roundtable have qualified a measure and want to change the rules to their benefit,” Senate President Pro Tem Toni Atkins (D-San Diego) said during a vote in the Senate on Thursday. “Make no mistake: They want to fundamentally alter the foundations of our government, bring it to a halt and stop our progress.”

Raising the threshold for approval under ACA 13 from a majority of voters to two-thirds for the tax measure to pass would make it much harder for business interests to prevail. Unions say it’s only fair that if you want to increase the threshold for other measures, your own measure should be subject to the higher bar as well.

3. What do opponents say?

Business interests say they are funding the Taxpayer Protection and Government Accountability Act in order to increase accountability over how government spends California tax dollars.

Their argument against ACA 13 is relatively similar to the case made by unions against the business-backed measure.

The California Business Roundtable contends that ACA 13 is an example of special interests trying to diminish the voice of voters by applying the change only to amendments that land on the ballot through the signature-gathering process and not those that are passed through the Legislature.

“Very simply, if you look beyond all of it, what this is about is raising taxes and making it easier to raise taxes,” state Sen. Kelly Seyarto (R-Murrieta) said during debate in the Senate, where the proposal passed with a 28-9 vote.

The Assembly approved the measure Thursday with a 54-19 vote.