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Issue Brief


Election 2008 Results: How Taxpayers Fared at the Ballot Box
NTU Issue Brief 168

November 11, 2008
By Pete Sepp
By Kristina Rasmussen

Introduction

Even though the presidential race captured most of the 2008 campaign season's limelight, numerous state and local ballot measures – many with significant fiscal implications – were put before voters. Prior to the election, the National Taxpayers Union (NTU) issued a 2008 ballot guide outlining more than one hundred state and local measures from 35 states, along with each measure's likely effect on the size and cost of government.

The election results showed little enthusiasm for a new wave of tax-and-spend policies. In many ballot contests, Americans rejected higher taxes, opted to keep tax limits in place, said no to more government regulation, and imposed accountability measures on elected officials. Indeed, Colorado voters rejected an attempt to gut their strongest-in-the-nation tax limitation law, the Taxpayer's Bill of Rights.

Still, the increased turnout of left-leaning voters did result in the defeat of measures that could have afforded significant protection for taxpayers. Out of the 79 state ballot questions identified by NTU's 2008 ballot guide, voters choose the low-tax/limited-government path 41 percent of the time, while taking the higher-tax/bigger-government route at a rate of 59 percent.

Table 1. Results from State and Local Ballot Questions Highlighted in NTU's 2008 Ballot Guide

 

Total Number

Number Approved

Number Rejected

Measures that would lower taxes/limit government

32

13

19

Measures that would raise taxes/expand government

47

31

16

This Issue Brief further explores taxpayer victories and losses in the 2008 election season in the areas of taxes, bonds and spending, property rights, government reform, and regulation.

Taxes

Table 2. Tax Measures

State

Number

Subject

NTU Guide

Result

AZ

100

prohibition of transfer taxes

+

Approved

AZ

105

majority vote requirements for tax hikes

+

Rejected

AR

3

lottery creation

Approved

CO

51

sales tax hike

Rejected

CO

58

energy tax hike

Rejected

CO

59

weaken Taxpayer's Bill of Rights

Rejected

FL

3

shield certain improvements from property assessments

+

Approved

FL

6

tax assessments for waterfront property

+

Approved

FL

8

local-option sales taxes

Rejected

GA

1

timberland property tax changes

+

Approved

GA

2

tax allocation districts for schools

Approved

GA

3

rural infrastructure development districts

+

Rejected

LA

5

portability of property tax assessments

+

Rejected

ME

1

repeal beverage taxes

+

Approved

MA

1

repeal income tax

+

Rejected

MN

n/a

sales tax hike

Approved

MO

A

gambling tax hike

Approved

MT

118

continue property tax for university system

Approved

NV

3

require justification for tax cuts

Approved

NV

4

allow alteration of sales and use taxes

Rejected

ND

2

lower personal and corporate income taxes

+

Rejected

OK

735

veterans' property tax exemption

+

Approved

OK

741

applications for tax exemptions

Approved

OR

56

weaken "double majority" protection against tax hikes

Approved

OR

59

income tax deductibility on state returns

+

Rejected

Note: A "+" sign indicates a measure to limit government and a "–" sign indicates a
measure to expand regulations and
government, as reported in NTU's 2008 Ballot Guide.

In Colorado, voters upheld the strictest tax and expenditure limit in the country. Known as the Taxpayer's Bill of Rights (TABOR), the law holds the growth of taxes and spending to the annual change in inflation and population, refunds excesses to taxpayers, and requires voter approval for higher taxes. NTU and its allies faced at least a 20-1 funding disadvantage against teacher unions and other special interests who sponsored the measure to gut TABOR, but prevailed when voters rejected the harmful changes to TABOR by a 55 percent-45 percent margin.

Measures to abolish the income tax in Massachusetts and reduce income tax rates in North Dakota were soundly defeated. In Massachusetts, the pro-Question 1 camp faced a particularly large fundraising gap, with just $81,000 available for advertising. In comparison, the opposition had $6,120,000 on hand for TV, radio, and print campaigns, thanks to heavy financial support from teacher unions.

Arizonans defeated a proposal to require a majority of registered voters in an affected locality – not just a majority of those showing up at the polls – in order to enact a tax hike. However, Arizona voters passed a measure that will permanently ban the imposition of any property transfer tax.

Taxes that elected officials thought were easier to sell proved not to be. In Maine, a "people's veto" measure to repeal taxes on alcoholic and other beverages (worth an estimated $40 million per year) passed by a 2 to 1 margin. A major hike in Colorado's severance taxes on oil and natural gas, designed to stoke resentment over energy companies' profits, failed overwhelmingly at the polls.

Minnesotans gave the nod to a 3/8-cent sales tax increase for outdoors and arts programs, but Coloradans nixed a 2/10-cent sales tax hike for aid to the developmentally disabled. In Florida, citizens gave a thumbs-down to a plan that would have given cities and counties greater latitude to propose local-option sales taxes.

Nevadans said "no" to allowing the state to make changes to sales and use tax laws without their prior consent, but they approved a measure that requires the Nevada Legislature to assess the social or economic benefits – along with establishing an expiration date – before passing a tax exemption. Oklahoma veterans could soon benefit from a new property tax exemption, but thanks to the approval of Question 741, all taxpayers will now need to file an application with the state in order to be considered for a property tax exemption.

In Oregon, voters weakened their existing "double majority" rule for property tax elections by suspending it for elections held in May and November. Oregonians also rejected a measure to make federal income taxes fully (instead of partially) deductible on state income tax returns. Montanans approved the extension of a special property tax (through 2019) that goes to fund the university system.

Given the unpopularity of broad-based tax hikes, some states looked to alternative revenue sources. An Arkansas measure creating a state lottery was approved, as was a Missouri proposal to boost the state's gambling tax.

Many local-level tax increases failed. Meals taxes were demolished in a number of Virginia counties, along with a proposed increase in Durham County, North Carolina. Special property taxes for emergency services were also turned down in Alabama's Chilton and Tallapoosa Counties. Voters in five out of six Massachusetts municipalities rejected measures that would have overridden a strong property tax limit known as Proposition 2-1/2.

Numerous areas considered proposals to raise taxes for mass transit, and the results varied. In Seattle, Washington and the Santa Fe, New Mexico region, voters approved higher taxes for light- and commuter-rail programs, but in North Kansas City and St. Louis, Missouri, citizens turned down similar plans. Residents in Otero County, New Mexico rejected a tax hike that would have helped finance an inland spaceport for commercial space travel.

Bonds and Spending

Table 3. Bond and Spending Measures

State

Number

Subject

NTU Guide

Result

AK

n/a

transportation bond spending

Approved

AR

1

water projects bond spending

Approved

CA

1A

rail bond spending

Approved

CA

3

hospital bond spending

Approved

CA

10

renewable energy bond spending

Rejected

CA

12

veterans' aid bond spending

Approved

CO

52

transportation spending prioritization

+

Rejected

ME

3

water projects bond spending

Approved

MT

155

expand government health insurance

Approved

NE

n/a

funding sources for economic development projects

Rejected

NJ

1

voter approval of authority bonds

+

Approved

NM

A

elderly facility bond spending

Approved

NM

B

library bond spending

Approved

NM

C

health facility bond spending

Approved

NM

D

education bond spending

Approved

ND

3

smoking cessation funding levels

Approved

OH

2

conservation bond spending

Approved

WA

985

transportation spending prioritization

+

Rejected

Note: A "+" sign indicates a measure to limit government and a "–" sign indicates a
measure to expand regulations and
government, as reported in NTU's 2008 Ballot Guide.

Although bond issues on state ballots tended to pass, there were some notable close calls for high-speed rail in California, for libraries in New Mexico, and for water sanitation in Maine. A $5 billion debt plan for renewable energy projects lost by a wide margin in California. New Jerseyans, meanwhile, passed a plan that offers at least some hope of voter approval for more kinds of bonded debt, although activists there warn that much more needs to be done.

Property Rights

Table 4. Property Rights Measures

State

Number

Subject

NTU Guide

Result

LA

6

repeal eminent domain "first refusal" rights

Rejected

NV

2

strengthen private property rights

+

Approved

OH

3

groundwater property rights

+

Approved

Note: A "+" sign indicates a measure to limit government and a "–" sign indicates a
measure to expand regulations and
government, as reported in NTU's 2008 Ballot Guide.

Property rights did very well at the ballot box. Ohio guaranteed property owners' groundwater rights and Nevada restricted eminent domain powers. Louisiana voters allowed homeowners to keep the right of "first refusal" in cases of eminent domain seizures, thereby requiring a government to first offer unwanted property back to the original owner.

Government Reform

Table 5. State Government Reform Measures

State

Number

Subject

NTU Guide

Result

AL

1

relaxed rules for rainy day spending fund

Approved

AZ

300

legislator pay increase

Rejected

AR

2

budget cycle change

Approved

CA

11

redistricting reforms

+

Approved

CO

47

"right to work" labor reform

+

Rejected

CO

49

"paycheck protection" labor reform

+

Rejected

CO

54

forbid "pay to play"

+

Approved

CO

O

tougher amendment qualification requirements

Rejected

CT

1

constitutional convention

+

Rejected

HI

n/a

constitutional convention

+

Rejected

IL

n/a

constitutional convention

+

Rejected

LA

1

term limits for commissions

+

Approved

NM

2

allow pay raises for sitting commissioners

Rejected

ND

1

strengthen oil tax trust fund

+

Rejected

OH

1

tougher initiative qualification requirements

Approved

OR

60

classroom performance standards for teacher pay

+

Rejected

OR

64

prohibit use of public funds for political purposes

+

Rejected

SD

G

higher reimbursements for legislators

Rejected

SD

I

longer legislative session

Approved

SD

J

eliminate legislator term limits

Rejected

SD

10

prohibit taxpayer-funded lobbying

+

Rejected

UT

B

strengthen severance tax trust fund

+

Approved

WY

B

tougher initiative qualification requirements

Approved

Note: A "+" sign indicates a measure to limit government and a "–" sign indicates a
measure to expand regulations and
government, as reported in NTU's 2008 Ballot Guide.

Government accountability measures did well across the country. Arizonans stopped a 33 percent pay hike for legislators, South Dakotans rejected higher travel reimbursements for state lawmakers, and New Mexicans turned down an amendment to allow incumbent county commissioners to vote themselves a pay raise. South Dakotans and Oregonians defeated measures to prohibit taxpayer funds from being used for political activity, but Coloradans ended "pay for play" in state contracting.

Utah opted to create a new and well-designed rainy day fund, but in Alabama voters gave the nod to a measure that will make borrowing from its rainy day fund easier. North Dakota voters said "no" to creating a protected, permanent "oil tax trust fund" for oil and gas taxes.

The concept of term limits continued to demonstrate remarkable popularity. Louisianans voted to restrict the tenure of commission and board members, South Dakotans decided to keep term limits for their state lawmakers, and residents of Memphis, Tennessee imposed term limits on their Mayor and City Council.

Direct democracy fared disappointingly at the polls. Ohio and Wyoming opted to make the signature-gathering process for ballot initiatives somewhat tighter, but in Colorado voters defeated a much worse measure that would have seriously hampered ballot initiatives. Amendments to call constitutional conventions in three states (Connecticut, Hawaii, and Illinois), all met lopsided defeats.

Regulation

Table 6. State Regulation Measures

State

Number

Subject

NTU Guide

Result

AZ

101

private health care coverage protection

+

Rejected

AZ

201

home building regulations

Rejected

CA

2

livestock regulations

Approved

CA

7

renewable energy mandate

Rejected

MO

B

home care service regulations

Approved

MO

C

renewable energy mandate

Approved

OH

5

payday lending regulations

Approved

OR

63

remove building permit requirements for small projects

+

Rejected

SD

9

prohibit "short selling" in securities trading

Rejected

WA

1029

elderly care service regulations

Approved

Note: A "+" sign indicates a measure to limit government and a "–" sign indicates a
measure to expand regulations and
government, as reported in NTU's 2008 Ballot Guide.

Arizonans narrowly rejected a measure that would have protected an individual's choice to pursue private health care coverage, but voters also rejected an amendment creating new home warranty requirements that could have opened the door to costly litigation. Californians thrashed a measure requiring all utilities to generate at least 20 percent of their power from renewable energy by 2010, but they did approve a proposition that would micromanage how livestock is caged. South Dakotans rejected one of the more bizarre amendments, which would have banned "short selling" in the securities trade.

Conclusion

Ballot results from the 2008 election were a mixed bag for taxpayers. A number of tax cut proposals were stymied, but at the same time, a number of tax hike proposals were stopped in their tracks. Voters often chose stability – not change – when it came to matters affecting their pocketbooks.

Taxpayer watchdogs are already looking forward to upcoming rounds of ballot measures. Citizen activists in the Pine Tree State, organized by the group Maine Leads, have already submitted 200,000 signatures to place three pro-taxpayer measures on the 2009 ballot, including a tax relief question, a car tax cut, and a health care choice initiative. Organizers in Florida are working to put a local government expenditure cap on the 2010 ballot.

It's been said that the 2008 election will prove transformational in our history, but whatever happens next, voters have still brought a solid piece of the past with them. Americans' traditional concern over how much money government should be able to take from their wallets is alive and kicking at the polls, and will remain so in future elections.