Politics
California Supreme Court to rule on high-stakes battle over ballot measure restricting tax increases
The battle between business and labor is headed for a high-stakes showdown at the California Supreme Court this week over a ballot measure that would tip the balance of power at the state Capitol.
The court on Wednesday will hear oral arguments on the legality of an initiative backed by business interests that strips the state Legislature and the governor of the ability to increase taxes and requires statewide voter approval.
In an effort to quash the measure, Gov. Gavin Newsom and legislative Democrats petitioned the Supreme Court last September to intervene. They argued that change revises the California Constitution and, therefore, can only be placed on the ballot if ratified during a Constitutional Convention or by winning a two-thirds vote in the Legislature.
The proposal has alarmed Democrats, unions and their liberal allies. The measure could limit state and local funding, hamstring the ability to generate new money for programs and make it more challenging for the governor and Legislature to offset a budget deficit in an economic crisis without slashing progressive policy priorities.
“They should be afraid because the people of California are fed up,” said Rob Lapsley, president of the California Business Roundtable, a proponent of the measure. “This gives the people of California the right to vote on future taxes, and voters are going to support it if it’s on the ballot.”
If approved by voters, the proposal would mark a historic win for the business community. Lapsley said establishing new checks and balances on taxation is essential to creating jobs and attracting companies to California.
Labor unions representing state workers, teachers, police and firefighters have joined forces with Democrats and dozens of other organizations to ask the high court to strike down the measure. They argue it would impair essential government functions and threaten services that rely on state dollars.
“I want to make it clear that the ‘Taxpayer Deception Act’ lets wealthy corporations, who can afford expensive campaigns, to block taxes on their industry while regular Californians, regular people, shoulder more of the cost of critical services,” said Tia Orr, executive director of Service Employees International Union California, which is leading the charge to defeat the measure on the ballot.
Officially dubbed the “Taxpayer Protection and Government Accountability Initiative,” the measure pushed by Lapsley’s group and the Howard Jarvis Taxpayers Assn. asks voters to require local governments to vote on all fee increases, which can now be approved administratively. The threshold to increase local special taxes would increase from a majority to a two-thirds vote of the people.
Fee increases at the state level, which are often approved by state agencies and boards, would need support from a majority of the state Legislature. The measure would expand the requirements necessary for a statewide tax increase, which currently can be done with a two-thirds vote of the Legislature. Under the ballot measure, support from a majority of California voters also would be required.
Taxes are often applied to the sale of goods, or income, for example, and pay for a variety of government expenses through the state general fund. A fee is typically collected and spent on a more specific service.
The measure expands the definition of taxes and restricts the potential use of fees to only cover the cost of the service, potentially prohibiting government from redirecting revenue to other purposes to close a budget deficit. The changes would take effect retroactively and reverse many local and state tax and fee increases approved since Jan. 1, 2022.
Carolyn Coleman, chief executive of the League of California Cities, said the new requirements for local ballot measures would effectively erase more than 100 measures that voters already approved with a majority vote. In Walnut Creek, for example, it would rescind a local public safety measure that voters approved with a 65% majority in 2022. The measure funded five new police officers, she said.
Opponents and supporters said that, if approved, the taxpayer ballot measure could rescind the “mansion tax,” also known as Measure ULA that took effect in Los Angeles last year. The measure applies a 4% charge on all property sales above $5 million and a 5.5% charge on sales above $10 million to fund housing and homelessness initiatives.
Lapsley argued that the mansion tax is “singularly the worst economic policy that you can possibly have in freezing the whole commercial, retail and residential real estate market in L.A.”
The luxury real estate market has slowed since the measure was adopted, but the charge has also raised about $215 million in funding in its first year.
Groups that have given money directly to Lapsley’s campaign, or funded other political action committees that contribute to the measure, include developers, landlords and real estate managers, among others with an interest in ending the mansion tax.
In addition to weighing whether the state ballot initiative constitutes a revision of the Constitution, the Supreme Court will consider the argument that it affects essential government functions.
Erin Mellon, a spokesperson for Newsom, said that in the event of a financial crisis the measure would require government to wait up to two years for the next ballot to raise taxes, “potentially putting lives and our economy at risk.”
“The governor is not a proponent of tax increases and has fought against propositions seeking to add new taxes, but the recession 15 years ago — and the current budget challenges facing our state — underscore the need for government to use every tool in the toolbox to respond to crises,” Mellon said in a statement. “The California Supreme Court should keep this radical effort led by wealthy business interests off the ballot because it violates the Constitution by attempting to completely restructure our system of government in a way that will prevent government from protecting Californians from future crises.”
The case elevates the ongoing fight between progressive labor unions and the business community from the halls of the state Capitol to California’s highest court.
Companies in California often complain that they can’t get a fair shake in a state Legislature dominated by Democrats and under the powerful political influence of labor unions. Business interests are increasingly turning to the statewide ballot to block and stall progressive laws from taking effect, or to push their own policy agenda directly to voters.
The proposed ballot measure could deal a blow to labor unions and other interest groups, who would find it more challenging and more expensive to convince voters to increase taxes to back their policy agenda than making their case just to legislators. Requiring lawmakers to pass bills to increase every new fee could also become a political challenge.
Lapsley and others said it’s rare for the Supreme Court to take up this type of pre-election challenge to a ballot measure. He said he feels that it’s fair for the court to consider the arguments, but he criticized Democrats for bringing the case.
“The fact that the Legislature and the governor are using taxpayer money to try and deny the voters of California, over 1.43 million who signed our petitions, the opportunity to have their voice heard is a direct violation of everything they talk about in terms of direct democracy,” Lapsley said. “They’re complete hypocrites when it comes to this case.”
Each side has 30 minutes to present an oral argument to the Supreme Court on Wednesday in San Francisco. The court is expected to release a ruling sometime before the June 27 deadline for measures to qualify for the ballot.
Politics
ActBlue CEO faces June 10 grilling after fundraising powerhouse allegedly misled Congress on foreign donations
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FIRST ON FOX: The embattled head of a Democratic fundraising behemoth is headed for a congressional grilling next month over allegations of fraudulent donations on its platform.
ActBlue’s CEO Regina Wallace-Jones will testify in a public hearing before the House Administration Committee on June 10, a committee spokesman told Fox News Digital.
Wallace-Jones’ agreement to testify comes as ActBlue faces mounting scrutiny over whether it misled Congress regarding foreign donations on its payment processing platform.
“Ms. Wallace-Jones allegedly misled our committee at the outset of our investigation into ActBlue’s fraud prevention standards,” House Administration Committee Chairman Bryan Steil, R-Wis., said in a statement. “It’s past time we set the record straight and got answers for the American people. I look forward to hearing her testify.”
House Administration Committee Chairman Bryan Steil, R-Wis., holds a press conference in Washington, D.C., on Oct. 10, 2025. (Anna Rose Layden/Getty Images)
DEM FUNDRAISING GIANT ACTBLUE ROCKED BY ALLEGATIONS IT MISLED CONGRESS ABOUT FOREIGN DONATIONS
The statement referenced an explosive report in The New York Times earlier this year that said ActBlue’s then-outside counsel warned Wallace-Jones in 2023 the group may have misrepresented facts to Steil’s committee about its vetting of potentially illegal foreign donations.
Under U.S. law, foreign nationals who are not lawful permanent residents are generally prohibited from donating to candidates seeking federal office or political action committees.
Steil previously requested that Wallace-Jones testify before his committee on May 19. The invitation was met with outrage from ActBlue’s lawyers, who dismissed the committee action as a “partisan attack.”
But Republicans have pointed to documents that ActBlue has allegedly withheld in response to subpoenas issued in 2025, which Steil has characterized as “deliberately incomplete.”
All five current or former ActBlue employees who appeared in depositions with the committee invoked their Fifth Amendment rights against self-incrimination a combined 146 times, according to an interim staff report released in April by House Republicans.
ActBlue CEO Regina Wallace-Jones, a delegate from California, wears a U.S.-flag themed outfit ahead of the Democratic National Convention at the United Center in Chicago, Ill., on Aug. 19, 2024.
TEXAS AG PAXTON SUES DEM FUNDRAISING PLATFORM ACTBLUE, ALLEGING ‘FRAUDULENT AND FOREIGN DONATIONS’
The House Administration Committee has been probing ActBlue’s fraud prevention safeguards since 2023, when Steil’s panel investigated the group’s failure to require credit card verification value (CVV) when processing payments.
“Given ActBlue’s demonstrated history of misleading Congress, there is considerable reason to believe that ActBlue may have deliberately withheld this responsive material to impede our investigation,” Steil and House Oversight Committee Chairman James Comer, R-Ky., and House Judiciary Chairman Jim Jordan, R-Ohio, wrote in a letter to Wallace-Jones in April.
In the letter, the senior Republicans also directed ActBlue to produce a trove of documents related to its vetting of political contributions from abroad.
Wallace-Jones has denied making false statements to Congress. The group’s lawyers have previously characterized the investigation as politically motivated and contended that ActBlue has been forthright with the committee.
Amid the GOP scrutiny, ActBlue has experienced a wave of resignations from senior legal and compliance staff.
An election countdown calendar hangs at the ActBlue fundraising office in Somerville, Mass. (Jessica Rinaldi/The Boston Globe via Getty Images)
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The June hearing notice immediately follows the House Administration Committee advancing legislation to crack down on fraudulent political donations, including illegal contributions from foreigners. The campaign finance measure cleared Steil’s panel unanimously on Thursday.
“It’s a positive sign that people are beginning to take this risk and this threat seriously,” the Wisconsin Republican told Spectrum News.
Politics
The Steyer campaign pays influencers. Their posts don’t always make that clear
WASHINGTON — In recent weeks, several social media influencers have popped up in online feeds touting the California gubernatorial campaign of billionaire Democrat Tom Steyer.
Some complain about the price of gasoline. Others mention environmental concerns. One cites her newfound sobriety as evidence that people can change — a nod to Steyer’s self-proclaimed metamorphosis from hedge fund titan to scourge of big corporations.
“I did not expect the most progressive governor candidate to be a billionaire, but look at the policies you guys,” said one content creator on TikTok with the user name Jaz R. “Hear me out. I know Tom Steyer is a billionaire, but he also is for the people.”
The posts include direct-to-the-camera appeals, with personal details interwoven into messages of support for Steyer. An influencer goes for a stroll as onscreen text touts Steyer’s policies. Some seek to convey authenticity, if occasionally ham-fistedly; one influencer mispronounces Steyer’s last name.
What they do not include is a disclosure that their creators were paid by the Steyer campaign to produce the videos, according to a complaint filed this week with California’s Fair Political Practices Commission and a Times review of the posts.
The complaint alleges that the Steyer campaign failed to notify the influencers it hired of their obligation to inform their audience when their posts have been sponsored by the campaign.
California passed a law in 2023 requiring that influencers disclose if they have been paid to create promotional content for or against a candidate or ballot measure, one of the few jurisdictions in the country with such a requirement. There is no such requirement at the federal level.
“Every time there’s a new technology, you have to create legislation that requires them to disclose,” said state Sen. Tom Umberg (D-Orange), who sponsored the bill.
Violating the law doesn’t carry criminal, civil or administrative penalties, but the FPPC can take influencers who break the law to court and ask a judge to force them to comply.
The complaint was filed by two California women — political influencers themselves — who said they noticed a number of new accounts that suddenly started posting similar-sounding videos promoting Steyer earlier this month.
“They had the exact same language, they had the same talking points,” said Beatrice Gomberg, who worked with Kaitlyn Hennessy in their digital sleuthing efforts.
The FPPC did not comment on the complaint.
Steyer’s campaign appears to have relied on paid influencers more than any candidate for governor, according to the most recent campaign finance filings.
That spending represents only a small fraction of the massive campaign war chest Steyer has seeded with nearly $180 million of his own money. But the complaint highlights the growing degree to which political candidates have come to seek out the authenticity that social media influencers seem to offer.
Steyer campaign spokesperson Kevin Liao said the campaign had properly followed the rules in hiring influencers and that the campaign is “confident” that Gomberg and Hennessy’s complaint is “baseless.”
“Creators make their living generating content. The campaign believes in compensating people for their time and work product and has paid creators to generate content,” Liao said in a statement. “Payments for creator content are disclosed in campaign finance reports, and we notify creators we directly work with of their disclosure requirements.”
While many of the new Steyer influencers have few followers, Steyer’s campaign disclosed in its most recent campaign finance report that it had paid thousands of dollars to numerous social media influencers with massive audiences, the Sacramento Bee reported.
Several of the videos produced by these popular social media personalities also failed to disclose that they had been paid by the campaign, according to the complaint and The Times’ review of the content.
But even accounts with few followers can still have a big impact if they are producing a steady stream of content supporting Steyer, said veteran California political strategist Mike Madrid.
“What they’re trying to do is trip the algorithm,” he said. “It looks like it has a bigger audience than it really does. It’s taking the concept of astroturfing into the digital age.”
Gomberg and Hennessy said they became friends after meeting at an April campaign event for Xavier Becerra, Steyer’s chief Democratic rival in the race, who holds a narrow advantage over Steyer in several recent political polls.
The pair have been prolific social media supporters of Becerra’s campaign ever since, though they insist they are not being paid for their efforts.
They said they discovered that many of the new pro-Steyer accounts seemed to be run by influencers — mostly women — who had previously created different social media accounts to hawk other products.
One of the pro-Steyer influencers had an online portfolio listing numerous clients, including the Steyer campaign and a gummy designed to boost arousal, according to the complaint and the Times review of the publicly accessible website.
The pair said they stumbled on an advertisement placed by a vendor for the campaign on a platform used by creators to find work. The advertisement indicated that creators would be paid $10 for each post, with bonuses for posts that amassed large viewership.
The vendor who posted the ad did not respond to a request for comment.
The advertisement has since been updated to say that it pays $1,000 per month and that creators will have to disclose that it is paid content.
As Gomberg and Hennessy dug deeper, they determined that some of the influencers promoting a candidate for governor weren’t even based in California.
A TikTok account using the handle jess.votes, for example, appears to be connected to a woman registered to vote in Florida. Other accounts were connected to women who indicated elsewhere that they were based in Pennsylvania, Missouri and Michigan.
Several influencers who created seemingly paid content promoting Steyer did not respond to multiple requests for comment from The Times.
The brouhaha over paid social media content is just the latest instance of the growing political impact of online creators.
Eric Swalwell’s campaign for governor — and congressional career — came to an end after multiple women accused him of sexual assault. A pair of influencers had publicly raised concerns about Swalwell’s behavior and helped connect victims with journalists who produced highly detailed reports of the allegations.
The California law requires influencers to disclose in a political post’s audio or text that it was sponsored and who paid for it.
The onus is on the creators to make the disclosure, but campaigns are required to tell them that they must do so. Despite passage of the law, the issue has so far remained largely under the radar.
“I have dozens of candidates and campaigns and I have not heard this issue come up one time,” said a campaign finance lawyer who requested anonymity because they represent numerous candidates with active campaigns.
Gomberg and Hennessy said that they were driven to call attention to potential violations of the disclosure requirements because of their concern about the corrosive influence such paid content could have if left unchecked.
“You have people who have trust in these creators,” Hennessy said. “You have a responsibility to your audience.”
Politics
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