The California Supreme Court ruled Thursday that a ballot measure that would have required voter approval for future state tax increases violates the state constitution and cannot appear on the November ballot as scheduled.

Justice Goodwin Liu, who wrote the unanimous Supreme Court opinion, wrote that the changes proposed in the bill “substantially alter the fundamental plan of government” and could only be implemented through an amendment to the state constitution.

The state Supreme Court issued an extraordinary decision to strike down a qualified voting measure just days before the vote had to be finalized, a major last-minute victory for Democratic leaders and labor unions who had warned that the measure, if passed, would be pro-business and undermine good governance.

State leaders who filed lawsuits challenging the measure also argued it took away their authority.

“The Governor believes the initiative process is a sacrosanct part of our democracy, but as today's Supreme Court decision confirmed, this process does not permit unlawful constitutional amendments,” Izzy Gurdon, a spokeswoman for Gov. Gavin Newsom, said in a statement.

State Assembly Speaker Robert Rivas (D-Hollister) said he was “extremely pleased” that the court “rejected this illegal and extreme attempt to strip local communities of the ability to cover the costs of essential services like police and firefighters.”

Business interests and taxpayer advocacy groups supported the bill, arguing its passage was essential to continued job creation and business retention in California, and gathered the signatures needed to get it on the ballot.

In a joint statement, several key supporters of the bill, including Rob Lapsley, president of the California Business Roundtable, accused the Supreme Court of “putting politics above the Constitution.”

Prosecutors argued that Governor Newsom, with the complicity of the Supreme Court, “effectively erased” the voices of more than one million voters who signed petitions to put the measure on the ballot.

“The Supreme Court has sent a signal that they are part of California's progressive agenda, that California is a one-party state and that there is no independent judiciary,” Lapsley said in a conference call with reporters.

Republican members of the California Senate, who sponsored the bill, also denounced the decision as partisan.

Senate Minority Leader Brian Jones, R-Santee, said he was “disgusted” by the ruling.

“The court has failed in its duty to Californians and our democratic system and has simply caved to pressure from the governor and Democratic legislators,” he said.

Sen. Brian Dahl (R-Beaver County) said the ruling was an “insult to Californians” by a judge “at the behest of the very people who want to raise our taxes again and again.”

Until Thursday, Democratic lawmakers and labor unions had been trying to reach an agreement with Governor Lapsley to voluntarily remove the bill from the ballot.

Thursday's decision does not give backers of the bill enough time to make amendments before the June 27 deadline to finalize the November ballot measure. Lapsley said supporters of the bill will regroup and work to shore up support or opposition to other bills in November and figure out the best approach to tax reform in 2026.

“We will consider all options available to us strategically, including ideas that have not yet been discussed,” he said.

In an attempt to block Lapsley's proposal last year, Assembly Democrats voted to put a countermeasure, called Amendment 13, on the ballot to raise the bar for the tax and similar measures to be approved by voters.

Rep. Christopher M. Ward (D-San Diego), who introduced the challenge bill, said Thursday he intends to keep the bill up for a vote.

The proposal rejected Thursday, officially called the Taxpayer Protection and Government Accountability Initiative, would have expanded the requirements for statewide tax increases from a two-thirds majority in the Legislature to two-thirds of lawmakers and approval by a majority of California voters.

It would also change the threshold for passing special local taxes from a majority vote to a two-thirds majority. Income taxes and sales taxes would be used to fund various government expenditures through the state's general fund.

Local governments were required to vote on rate increases, which can now be approved administratively, and state rate increases, which are often approved by state agencies or commissions, had to be approved by a majority vote of the state legislature. Fees are often used to cover the costs of certain government services.

Business groups argued the bill was needed to increase scrutiny of progressive state leaders' taxing habits, while Democratic leaders, lawmakers, labor unions and other liberal allies said it would undermine the Legislature's ability to balance the state budget without threatening progressive policy priorities.

Liu wrote that the court did not take a position on the “wisdom” of the “fundamental changes” contained in the bill. Rather, the court concluded only that those changes were “amendments” to the state constitution that would “fundamentally restructure the most basic government powers.” Such amendments can only be made through established procedures for constitutional amendment, not by voter initiative, he wrote.

“By requiring voter approval for all measures, the TPA removes the imposition of new taxes from legislative control, undermining a long-established understanding,” Liu wrote. “The power to tax is an essential legislative power, and without it the legislature would be unable to carry out its functions.”

Former Gov. Jerry Brown joined opponents, urging the Supreme Court to remove the measure from the ballot, and appointed Liu to the court in 2011.

Jonathan Underland, spokesman for the Labour Support Campaign, which opposes the measures, praised the Supreme Court's decision.

“The Supreme Court's decision to keep this dangerous bill off the ballot averts many devastating impacts, including billions of dollars in funding for schools, access to reproductive health care, gun safety laws that keep students safe in the classroom, and protections for paid family leave,” he said.

Members of California's main labor union, the Service Employees International Union, which had been concerned about the measure's impact on funding for teachers, police officers, firefighters and other public employees, also praised the decision.

The group's president, David Huerta, said in a statement that the bill is “a clear attempt by a few extremely wealthy real estate developers to undermine our entire democratic institution and our voice as voters, and destroy the vital services Californians rely on — all to avoid paying their fair share.”