The Day Democracy Died in California

On June 20, the California Supreme Court ruled that the Taxpayer Protection Act, a ballot initiative that would have given voters veto power over new taxes, was a violation of the state constitution. The initiative, for which proponents had already gathered nearly 1.5 million signatures to qualify it for the ballot, was a desperate attempt by taxpayers and businesses to get California’s state and local government spending under control.

The court decision hinged on whether the initiative’s language constituted a “revision” of the state’s constitution or an “amendment.” The answer to this question is subjective and hinges on the “totality of the impact on the basic constitutional powers of government entities.” Ignoring ample contradictory evidence and precedent, the court decided that the changes proposed by the initiative were sufficiently sweeping to categorize it as a revision to the state constitution, and unlike amendments, revisions to the state constitution are only possible if the initiative is brought to voters by an act of the state legislature.

Thus, the Taxpayer Protection Act, which was a product of private grassroots groups, is dead. And with it, direct democracy – California’s last, best hope – is also dead.

Everything about this situation evokes a frustration that defies description. When assessing the “totality” of taxes and fees – sales tax, utility tax, excise tax, carbon emissions fees, payroll tax, income tax, property tax, permit fees, registration fees, payments on state bonds, municipal bonds, school bonds, the gasoline tax… the list of various fees on businesses is endless – Californians pay more to support their government than anywhere else in America. It is oppressive and it is driving people and businesses to flee to other states while it smothers the households and businesses that remain. The only people left making real money are the tech giants.

Some frustration may be directed at the proponents of this initiative. It isn’t unreasonable to wonder why, before they went ahead and spent millions of dollars to gather signatures and qualify this initiative for the state ballot, they didn’t anticipate a potentially devastating court ruling. The problem with that reasoning, however, is that it lacks the requisite cynicism with which to accurately regard any situation that threatens California’s special interests. Witnesses attending the proceedings left the court confident of an easy victory. Arguments by the initiative’s proponents were compelling. The state’s arguments were an incoherent stretch. That didn’t matter to the judges. Let the state keep on calling new taxes fees. Let the legislature raise taxes at will. That’s democracy in action – California style.

The overwhelming share of frustration must be directed at the corrupt elites who run California today. There is no doubt who these judges favored—and feared—the most. Here are the special interests that lined up to keep this initiative off the ballot:

Governor Gavin Newsom. The California Democratic Party. Public sector unions, including AFSCME, SEIU, and the California Professional Firefighters. Public agency associations, including the California Contract Cities Association, the California Special Districts Association, the California State Association of Counties, and the League of California Cities.

Notice what all these groups have in common. They are all supported by taxpayers, and the Democratic party, which they control, is their collection agency. The Taxpayer Protection Act would have taken away the most egregious prerogatives of this collection agency, which, for the last several years, has been out of control. It’s not hard to see why. The state legislature is currently empowered to raise taxes if they can get two-thirds of the state senate and two-thirds of the state assembly to vote in favor of the increase. That’s easy. Democrats control 78 percent of the seats in the assembly and 80 percent of the seats in the senate. They can raise taxes anytime they want, and they do, over and over.

It’s also not hard to identify the special interest that is at the heart of everything that has gone wrong in California. Public employee unions. If you want to know why California’s state general fund spending has increased from $96 billion in 2013 to $226 billion in 2023, it’s the unions. Even after adjusting for inflation, that is a per capita increase that has nearly doubled in only ten years.

Publicly available reports on campaign contributions to California’s state legislators make it all too clear who controls these politicians. In almost every case, the Democrats in the state legislature have received most of their campaign funds from public sector unions. The imbalance is almost absurd. Typically, the top ten largest contributions by amount come from government unions, and it is even common to see every one of a politician’s top twenty contributions coming from these unions.

In California, public sector unions collect and spend nearly $1 billion per year. During every two-year election cycle, they collectively pour hundreds of millions into political campaigns, with enough money to reach into every elected office, from a local water board, school board or city council all the way to seats in the legislature and top state offices, including the governor. These unions are joined by government agencies or government-supported associations, such as the League of California Cities, to fund allegedly non-political “information” campaigns. Hence the city funded flyers that inundate residential mailboxes, calculated to innocently “inform” voters of the consequences to public safety and child welfare if the latest local tax increase or bond issuance isn’t approved.

The public sector runs California, and if it seems cynical to suggest that for them, social failure equals government success, then just consider the evidence. The bigger the failure, the more new spending is required. Per capita government spending has doubled in the last decade in California. Has anything improved? Better schools, better roads, less crime, fewer homeless, more affordable anything? No. It’s all gotten worse.

To ensure that things continue to get worse, the state legislature and the governor are pulling out all the stops. As noted, they filed a lawsuit to make a biased court of handpicked judges throw a tax reform off the ballot. They have also placed two of their own pro-tax initiatives on the ballot. One of them, if approved by voters, will further erode the tax protections that Californians still retain. The other one will make any further attempts to use the initiative process to lower taxes virtually impossible. Expect them to spend tens of millions to con voters. As always, for these campaigns, they’ve got all the money they’ll ever need.

Things will also get worse in California thanks to a raft of last-minute, allegedly anti-crime laws that the legislature has passed, complete with poison pills. These new laws—which are too little, too late—include language to automatically nullify them if voters approve another grassroots initiative that will actually untie the hands of California’s law enforcement. They couldn’t get that one off the ballot, so they’re being extra clever in this case. Expect California’s attorney general to give this initiative, which would actually curb crime, a ballot description that reads something like this: “Initiative to Repeal Penalties for Crime.”

These are just a few recent examples of the convoluted gyrations of a totally self-interested cabal that wields absolute power in California. Normal working families in California endure obscene levels of taxation, crippling over-regulation of everything, failing public services, crime and disorder, and a punitive cost of living. In return, they are obligated to support a government that operates according to a simple, diabolical formula: the worse things get for them, the better things get for us.

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About Edward Ring

Edward Ring is a senior fellow of the Center for American Greatness. He is also the director of water and energy policy for the California Policy Center, which he co-founded in 2013 and served as its first president. Ring is the author of Fixing California: Abundance, Pragmatism, Optimism (2021) and The Abundance Choice: Our Fight for More Water in California (2022).

Photo: The California State Capitol building in downtown Sacramento.

Notable Replies

  1. Ray Dalio published an interesting long form article in Time Magazine yesterday titled, “The Coming Great Conflict”. (I’ll link it below) He writes that the public is faced with three choices—to either pick a side and fight for it, keep your head down, or flee. He contends we are already in a Civil War—just one in which the shooting hasn’t started. I don’t intend to reprise the entire article here, but reflect where it touches on Ring’s lament for California.

    When Dalio says flee, what he means is moving to a state that better reflects one’s values. He sees a continued crumbling of the central government and a rise in individual state power. He says this happens when confidence in central authority wanes and people look more locally for stability in the changing world. The decline and fall of California is representative of what happens when a state becomes in thrall to an extremist ideology espoused by the extreme wing of a party. Dalio sees the extreme Left as Marxist while the extreme Right is Fascist. I personally disagree with his label for the Far Right, but it is his article, so his labels.

    Dalio believes that before the shooting begins, there will first be a great physical re-alignment where people first vote with their feet—moving to states that better reflects one’s own personal values. How bad it will be for those who fail to or are unable to move is left open. However, a possible vision for that might be found in the movie recommended by Maximus-Cassius-----“Hatred”. The inhuman massacre of Poles by Ukrainians, and Ukrainians by Poles during World War II gives insight how fragile civilization really is.

    Mr. Ring continues to fight for California. For myself, I think it is well past saving. His explanation of why the Taxpayer Protection Act died is also found in Dalio’s article when he speaks of the public losing confidence in the judiciary when the judiciary itself is seen as no more than a tool of one side or the other.

    Those that find themselves stuck in a state of the wrong color persuasion should be deep in an action plan to get the heck out of there. Time is running out.

  2. Things will not improve in California unless or until there is an intervention. And it must be acknowledged that such an intervention is not likely to happen. In which case, it is entirely possible–probably quite likely–that California will lapse (collapse) into a failed state run by deeply corrupt politicians and gangster cartels–like its larger cousin to the South

  3. Don’t you think the reality already demonstrates Dalio’s error? Chiefly, that people want less centralized government and the federal government is far too involved (unconstitutionally and illegally) in matters which the Constitution does not grant it power. There is no “crumbling” of the central government writ large in the U.S. and California’s government seeks to impose itself over whatever is left, or in addition to the fed’s reach.

    One of the reasons so many people have moved to say, Florida, is the impression they have that it is far less regulated. In one way, that is true. For example, Florida legislation requiring hospitals obtain immigration status from patients and publicly disclose how much money they are spending on care for illegals has the impact, without any further measure, of decreasing those costs. In reality, hospitals are not required to treat illegal aliens except where 1) they are in labor, and 2) they have a life-threatening situation. DeSantis is exposing how much of those costs borne by taxpayers are unwarranted because they are using ERs as clinics. Although legislation passed requiring this exposé, it isn’t an expansion of state power. He is using his office and the legislature to check federal power. I wouldn’t couch it as Dalio does, as a matter of big versus small government. It is a matter of legitimate government action (as in Florida), versus illegitimate government action (as in every single Democrat-controlled governor’s mansion).

  4. The power to tax is not unlimited. John Roberts expressed this in NFIB v. Sebelius, the Obamacare case. If that is indeed a constitutional element, then we have proof that the federal government is, in fact, illegitimate in every way, not simply California’s government. On every level, both state and federal government actors exceed their taxing power and the Administrative State has NONE. Yet, here we are. Who will inform the “government” that its power to tax is, in fact, “limited”? The courts? LOL

    When a country chooses to force its citizens to give up their labor and property in exchange for some perceived benefit to the citizenry, that constitutes “representation”. That is not what the United States government does, nor has it done this for decades. It confiscates citizens’ labor and property to redistribute to those it wants, not for citizens’ benefit. Apparently, the power to tax is in the eye of the beholder?

  5. I don’t think we are disagreeing here, Dalio’s point was that as confidence in the federal government fades, state governments take a stronger role. He sets the split as occurring when the populace loses all faith in the federal judiciary as unbiased arbiter.

    My takeaway from the Dalio article was that before the shooting begins ( and Dalio went to great pains to qualify the “when” as an “if”) people will first decide with their feet. Dalio described the Far Left as Marxist totalitarians and the Far Right as Fascist totalitarians. I totally disagree with his view of the Far Right (if such a thing even exists). In my view, the Far Right are really Constitutionalists and about as far away from fascism as one can get. I think for the purposes of his analysis, he had to come up with polar opposite ideologies to make his logic seem applicable.

    What I see happening in Red States such as Florida and Texas is a reflection of less regulation, not more. Dalio (to me) wasn’t describing growing state power over its citizens, but instead a growth of state power in opposition to federal power. And how that “state power” is reflected to state citizens follows a Left/Right paradigm. Those that wish for Marxist control will drift to those states, and those that favor Originalist Constitutionality will drift to those states. I think Dalio chose poorly when describing the Right as being fascist.

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