(Alexandria, VA) – Despite cautiously O.K.’ing a large tax increase in California and rejecting limits on taxes in some other states, voters across the country were in no mood to give blanket approval for proposals that would take more of their money, according to an analysis of state-level ballot measure election results from the National Taxpayers Union (NTU). In states as diverse as Arizona, Missouri, Oklahoma, and Washington, citizens opted to keep taxing and spending levels or powers in check.
“Politicians are loading up their victory and concession speeches with opinions on what happened with the election, but one thing is clear: big government cannot claim a mandate at the ballot box this year,” said NTU Executive Vice President Pete Sepp. “No matter how else the outcome is spun, when voters weighed in on specific fiscal issues, they were reluctant to give government deeper reach into their pockets and lives.”
As in previous elections, NTU compiled the most comprehensive national level guide available on state and local ballot measures pertaining to fiscal policy. NTU’s 2012 General Election Ballot Guide: The Taxpayer’s Perspective, contained approximately 750 propositions, initiatives, referenda, proposals, and constitutional amendments from 35 states and numerous localities.
In many states, NTU found that voter uncertainty over the future of the economy tended to make them cautious about embracing sweeping fiscal changes of any kind. In those where they did approve tax increases, even major ones, they tended to set boundaries on how far they were willing to open their wallets. Although many results remain to be determined, highlights so far from NTU’s post-election overview include:
- While Californians did give the nod to Governor Brown’s plan to “temporarily” expand income, sales, and other taxes, they rejected by a 3 to 1 margin a more radical competing plan pushed by attorney Molly Munger. Voters also backed a punitive new tax regime for businesses with sales in other states, but turned down a food-labeling scheme that would have hurt in-state commerce.
- State sales tax hikes fared unevenly. Though Arkansans gave the go-ahead for a targeted tax increase for funding a four-lane highway system, they stopped a proposal that would allow localities to create tax-funded “redevelopment districts.” South Dakotans nixed a one percentage-point sales tax boost that would have been earmarked for education and Medicaid. Arizonans said “no” to a $1 billion-a-year extension of a temporary sales tax increase they had agreed to in 2010, and approved a 5 percent annual cap on state-level property tax valuation increases.
- New Hampshire citizens voted in favor of a constitutional ban on a statewide income tax by a 57 percent margin, but the amendment required a two-thirds margin to take effect.
- Oregon’s citizens decided against a plan to completely phase out estate and inheritance taxes, but they also opted to amend the State Constitution to ban real estate transfer taxes.
- Washington Staters affirmed for the fifth time (and by roughly a 2 to 1 margin) a safeguard requiring two-thirds legislative or voter approval to raise taxes. They also overwhelmingly enacted a plan to reduce the state’s debt limit.
- Confounding anti-tobacco zealots, Missourians opted to maintain, not raise, the statewide cigarette tax rate, in the process maintaining the state’s competitive advantage in cross-border sales. The result will likely not leave state coffers as bare as advocates of the tax increase suggest. According to an NTU study, between 2001 and 2006, 41 of 59 state tobacco tax increases were followed by more hikes within two years owing to tobacco revenues that never materialized.
- Florida voters rejected the opportunity to augment their already strong constitutional protections against higher taxes through a new revenue limit based on inflation and population growth; they also defeated a complex property tax assessment cap. On the other hand, they readily agreed to authorize new property tax relief for seniors and veterans, as well as double the tax exemption for tangible personal property.
- Louisiana followed a similar path on property taxes, by approving a new exemption for certain veterans’ spouses, and a program for targeted exemptions to non-manufacturing businesses. Further across the country, Kansans voted to reduce property taxes on boats by taxing them at the same level as other recreational vehicles.
- For their part, Oklahomans decided on more comprehensive property tax reform, by putting a new 3 percent lid on future property tax increases, and eliminating entirely the arcane “intangible” tax on property such as patents and software.
- On Michigan’s statewide measures affecting taxpayers, the answer was “No.” This meant they decided against supplementing the State Constitution’s existing voter approval requirement against tax hikes with a new legislative “supermajority” protection. However, it also meant they roundly rejected a plan to require one-fourth of the state’s electricity to come from renewable sources which, by some estimates, could have imposed net costs on the economy of more than $2.5 billion.
NTU determined that many issue clusters of interest to taxpaying citizens had a strong showing at the polls. An attempt to undermine term limits and a ploy raise state lawmakers’ pay by 166 percent were thrashed in Nebraska, while Alabamians opted to actually cut their legislators’ salaries. Louisiana voters empowered the Legislature to deny retirement benefits to public employees who commit felonies, and passed a measure increasing the time required before bills involving public employee retirement issues of all kinds are considered. South Dakotans also voted to keep the mileage reimbursement rate for state officials at a low 5 cent-per-mile rate, and, more importantly, created a new constitutional requirement for a balanced budget.
As in the past few elections, state and local ballots sometimes turned their attention to issues related to federal policies. Virginians gave final approval to a state constitutional amendment limiting instances where private property may be taken by eminent domain. This is a reaction to the U.S. Supreme Court’s Kelo decision. Four states – Alabama, Florida, Montana, and Wyoming – had referendums on the federal mandate to purchase individual insurance in President Obama’s 2010 health care law. Three of the four – Alabama, Montana, and Wyoming – expressed opposition to the mandate.
Although the NTU analysis on hundreds of local-level ballot measures is still underway, researchers uncovered a few interesting examples among the various extensions and renewals that are often approved with little fanfare. Even though they gave the thumbs-up to a new arts tax, Portland, Oregon residents also enacted cost-saving reforms to local police and firefighter pensions. In St. Bernard Parish, Louisiana, a tax on phone lines (which would have cost as much as $2.07 per month per customer) went down to defeat. Nye County, Nevada denizens gave a thumbs-down to a measure that would have raised the local tax on gasoline, and Satellite Beach, Florida taxpayers enacted one of the strongest taxpayer protections in the nation – a requirement that future local tax hikes receive approval by four-fifths of the voters.
“Americans spoke with many voices in the 2012 election, but when it comes to pocketbook issues they voted on directly, their political vocabulary often opposed excessive taxation and spending while calling for moderation,” Sepp concluded. “Fortunately, the ballot measure process will give taxpayers more opportunities to reaffirm, amend, or add to these words in future elections.”