Court Issues Decision on Proposition 25

As the election campaigns for each side on Proposition 25 carried on, there was a quiet battle in the courts brewing over whether the majority-vote proposition approved by voters last week could be used to circumvent the two-thirds vote requirement for tax increases.
 
Opponents of Proposition 25 argued during the campaign that the measure to lower the budget vote requirement to majority would allow the Legislature to include hidden taxes in budget trailer bills and pass them with a majority vote.   The California Chamber of Commerce and other opponents challenged the ballot language in court.
 
The 3rd District Court of Appeals struck down that argument, opining that the proposition “cannot be interpreted to operate as an end-run around the two-thirds vote requirement for raising taxes.”  However, the court did not publish their decision.  Supporters of the decision believed the decision would not stand up in court if the Legislature were to pass taxes with a majority vote and their actions were challenged.  Opponents filed a request in August for the publication of the decision.
 
This past Wednesday, the State Supreme Court issued an order to publish the Court of Appeal ruling.  This order now means that the appellate decision could be cited in any court challenge if lawmakers did try to pass new taxes with a majority vote.
 
This news couldn’t have come at a better time for the business community, given the announcement of a Special Session and the recent election of Governor-elect Jerry Brown.