The California Supreme Court is set to rule any day now on whether a sweeping anti-tax measure dubbed the Taxpayer Protection and Government Accountability Act (TPGAA) can appear on the November ballot. As they await the court’s decision, leaders from several California cities have been rallying against the initiative, which they've rebranded as the “Taxpayer Deception Act.”
The measure was spearheaded by the California Business Roundtable. It would require voter approval for almost any increase in state or local taxes, as well as government fees. It would also change the local threshold for local tax initiatives introduced by citizens from a simple majority to a two-thirds vote.
Most concerning for governments is that the measure would be retroactive. Any taxes and fees passed after Jan. 1, 2022 that don’t meet the measure’s requirements would be void.
Local governments warn the measure could upend their budgets and make it impossible to fund essential services. They’ve been mobilizing with the help of Cal Cities to spread the word about the potential harm in case the court decision doesn’t go their way. Leaders from Fresno, Clovis, San Jose, Los Altos, Mountain View, and Los Angeles have appeared at recent anti-TPGAA events. At least 246 cities have passed resolutions opposing the measure, according to Cal Cities.
The debate over TPGAA comes at a difficult time for both taxpayers and local governments. Taxpayers are still struggling with sticker shock from inflation, compounded by ever rising costs of living in the state. Local governments, which get the majority of their revenue from sales and property taxes, are still recovering from the hits they took during COVID. Federal relief funds have now run out and many localities are seeking revenue enhancement measures in November.
The Supreme Court court case hinges on whether TPGAA constitutes an unlawful revision of the state constitution and if it would hinder the ability of governments to operate. A decision is expected before June 27. That's the deadline to finalize November’s ballot.