And just like that another election day has come and gone. While off-year elections usually go under the radar for many, taxpayers came out in force this year and scored some significant victories on many important ballot measures at the state and local levels. Of course, there were also a number of measures that passed that could lead to fiscal troubles down the road.
Prior to election day, National Taxpayers Union (NTU) released its 2017 Ballot Guide, which detailed 47 significant state and local fiscal policy ballot questions. Here is a brief recap of how some of the major initiatives fared this year:
Health Care
In Maine, by a vote of 58 percent to 42 percent margin, voters approved Question 2, which expands Medicaid for Maine residents under the age of 65, with incomes below 138 percent of the poverty line. NTU noted that expanding Medicaid will cost Maine between $50 and $100 million per year, and expected total of $400 million over five years. As a result, expansion could lead to an annual tax increase in the amount of about $180 on every household in the state.
In a big win for Ohio taxpayers, 80 percent of voters handedly defeated Issue 2. If enacted, Issue 2 would have essentially implemented price controls on pharmaceuticals by prohibiting the State of Ohio from paying more for any prescription drug than the highest price paid by the U.S. Department of Veterans Affairs. As NTU noted in our guide, price controls lead to shortages, and would restrict access to medication for those who depend on certain drugs.
Bonds
Bonds can be an effective funding mechanism for expensive capital projects, as the cost is spread out over a long period of time. However, bonds can be problematic for taxpayers as the accrued interest on the principal amount makes the total cost far more expensive than the issuance cost.
Voters in Dallas, Texas overwhelmingly approved 10 measures that will permit the issuance of $1 billion in new bonds. The total debt service, including interest and principal will cost taxpayers a whopping $1.42 billion over the next 15 years!
Nearly 72 percent of voters in Maine approved the issuance of $105 million in new bonds to fund transportation infrastructure projects across the state. While it is unclear what the total cost will be, taxpayers can expect a possible tax increase if state legislators do not offset this new spending with cuts elsewhere in the budget.
Out of the six local bond measures California voters faced, only two were approved. The approved measures include $149 million (but a total cost of $268 million) for the La Canada Unified School District in Los Angeles, and $5.95 million (a total cost of $12 million) for the Mountain Valley School District. Importantly, taxpayers defeated measures that had a combined initial cost of nearly $200 million.
Sales tax
The most common ballot question for California voters was whether to increase local sales taxes. Out of the 14 questions, voters in 10 of these jurisdiction approved a hike in their local sales tax. Unfortunately for taxpayers, most of the approved tax increases have no sunset date, meaning these taxes will not end until they are repealed by popular vote.
In Tucson, Arizona, two-thirds of voters easily defeated a question that would have raised the sales tax from 8.6 percent to 9.1 percent to pay for early childhood education.
Parcel Tax
Parcel tax increases were also a prevalent issue for local communities as there were 13 questions on the ballot. Out the 13 questions, voters approved in 7 localities approved a rate increase. For taxpayers in Marin County, they can expect to shell out an additional $535 per year, plus an additional 6.5 percent yearly cost of living increase, in taxes.
The Ballot in 2018
Looking ahead, taxpayers should remain vigilant and mobilized early to push back against questions that are expected to be on the ballot in 2018. In Massachusetts, a huge income tax hike and $15 minimum wage is already confirmed to be on the ballot. In California, two new measures are gaining steam: one that will reverse the devastating gas tax hike; and another that could impose statewide rent controls. It is important for all citizens concerned about fiscal restraint to get ahead of some of these negative measures and ensure 2018 is a good year for taxpayers!