With apologies to Louisiana, the 2011 election season started in
earnest last night in Colorado. Voters overwhelmingly defeated the only
statewide tax increase on the ballot in the country, and created a “killing field” of local tax
increases. The quickest and easiest way to summarize last night's results is that taxpayers and voters have little appetite for tax increases that jeopardize job growth when the national unemployment is sitting at 9.1%. As long as the economy continues to struggle, I would predict that measures like Proposition 103, which sought to raise taxes $532 million per year, will continue to fail.
Before going into any detail it worth stating that Tuesday once
again showed the value of the Taxpayer Bill of Rights (TABOR). As our friends
at the Illinois
Policy Institute stated on facebook, “This Proposition  is losing 65%
to 35% and calls for a fraction of the tax increase that the Illinois
legislature passed in January. What if Illinois taxpayers were allowed to vote
on that one?” That could be true in any number of places. The beauty of TABOR is
that it lets the taxpayers, rather than politicians, decide on the appropriate
size of government.
Now onto a couple of the measures…
103 (Failed 36%-63%)
It should not come as a huge surprise that Proposition 103 went down
in defeat. After all, every poll taken on the measure had it losing. However,
with the edge in funding, $600,000 in favor to $25,000 spent by the opposition,
the margin of defeat is very surprising. The margin of defeat probably also contributed to the number of
local levies and bond issues that failed. When you look at the county
breakdowns in vote totals, the three counties which voted yes for Proposition
103 were also the only counties that passed any significant local tax hikes. While
Colorado does have a strong history of rejecting tax increases, the significance
of the vote last night should not be understated.
One of the reasons NTU compiles its annual ballot guide is to have a resource to look towards the future. In that light, Proposition 103 should inform states like South Dakota, which is looking at putting a very similar sales tax measure on the 2012 ballot.
One of the few tax increases approved by voters came in Boulder. Given the city’s general political leanings, again it is not overly surprising. Residents voted to create a municipal power company to replace Xcel Energy, and to impose a multi-million, multi-year tax increase to finance the new public utility.
However, the vote was far from overwhelming, the measure to create
the new utility passed 51%-48%, and the tax increase to pay for the new company
passed by roughly 125 votes (50%-49%).
The long term costs of these two measures could quickly escalate to close to $1 billion as the city goes through the process of buying Xcel’s assets and transmission capabilities. Proponents of the ballot measures stressed they would not move forward if creation of a public utility proved cost-prohibitive. Yesterday’s close vote should further stress the need to proceed with extreme caution.
The only other area taxpayers really took a hit was in Pitkin County. Voters passed, by a 60%-39% margin, a measure to increase property taxes by $460,000 a year to pay for expanded county health services. They also passed a handful of local fire and water district taxes.
That was really it for the bad news. Voters in Aurora shot down a $100 million bonding measure. Chaffee County defeated all three tax increases, which were nominally obligated to emergency services and road repairs. Denver overwhelming defeated a proposal to mandate businesses offer employees a set amount of sick leave.
I can go on and on down the rest of our Ballot Guide, but the story is much the same. Despite warnings and reports to the contrary, it does not seem that voters in Colorado at least have any more an appetite for tax hikes and more government than they had last year.