While political pundits were busy focusing on the gubernatorial races in New Jersey and Virginia or the New York City mayoral showdown, voters across the country on November 4 cast ballots on almost 1,000 measures that directly affect their wallets. Many of these state and local ballot initiatives fail to get the same media attention as individual political candidates, yet their impact on taxes and spending warrants careful attention from voters who value their hard-earned tax dollars.
After analyzing thousands of sample ballots supplied by secretaries of state offices, county election officials, and publicly accessible website data, National Taxpayers Union (NTU) estimates voters decided on ballot measures that totaled at least $3.1 billion in annual tax increases or extensions. This includes $1.7 billion in higher property taxes and $1.3 billion in higher sales taxes. There were also hundreds of measures to issue $37.3 billion in new bonds, higher debt obligations that could affect taxpayers for decades.
Across 20 states, voters decided on 13 statewide measures and 911 local measures that had a direct impact on taxpayers or public spending. While reviewing the results of each local measure is beyond the scope of this article, surveying the results of the statewide measures offers valuable insight into the fiscal priorities of taxpayers.
Here’s a look at the results of the 13 statewide measures that were on the ballot in Colorado, Texas, and Washington:
Colorado: Voters approved both statewide measures that were on the ballot. Proposition LL allows the state to retain $12.4 million in excess tax revenue that was collected above projections and spend it on school meal programs, rather than returning those excess funds to taxpayers as the state’s Taxpayer Bill of Rights (TABOR) calls for.
Proposition MM also funds school meal programs by reducing state income tax deductions for taxpayers earning $300,000 or more. Once the schoo
meals program reaches a specified reserve fund, this measure will also support the Supplemental Nutrition Assistance Program (SNAP). The fiscal implications of this income tax increase are profound, with the measure projected to generate an additional $95 million in annual revenue.
While returning the $12.4 million to taxpayers wouldn’t provide anyone with a financial windfall, Proposition LL’s success symbolizes a larger erosion of fiscal discipline and taxpayer control of the state’s finances. Colorado voters designed TABOR to prevent the government from automatically spending money that exceeds projections. Proposition LL’s approval undermines that principle and risks letting the government grow unimpeded over the long run. NTU detailed these risks in a recent opinion piece, cautioning voters that, if the state keeps this surplus today, lawmakers will argue for keeping larger amounts tomorrow.
Texas: Voters approved all 10 statewide ballot initiatives with a taxpayer impact. These measures included pre-emptive bans on lawmakers from imposing future levies on capital gains, securities transactions and inheritances, as well as various property tax exemptions for households and businesses.
The decision by Texas voters to tie the hands of state lawmakers on certain tax matters is a powerful safeguard for taxpayers. Banning lawmakers from taxing capital gains and securities transactions provides the financial industry with predictability amid plans to launch the Texas Stock Exchange early next year. Moreover, banning inheritance taxes protects family farms from forced sales to cover future tax liabilities. Given the importance of financial services and farming for the state, the success of these ballot measures demonstrates that Texas voters value sound economic policy.
Washington: Voters approved the only statewide ballot measure. Senate Joint Resolution 8201 would allow the Long-Term Services and Supports (LTSS) Trust Fund, also known as the WA Cares Fund, to be invested in stocks and equities. Under current law, the fund is limited to investing in bonds and other fixed-income securities. Earnings from investments would be used for funding long-term care services for beneficiaries.
The success of this ballot measure reflects responsible fiscal stewardship by Washington voters. Since stocks outperform bonds over the long-run, allowing the WA Cares Fund to be invested in equities will strengthen the program’s fiscal footing. This, in turn, lowers the pressure for future tax hikes to cover funding shortfalls.
The Taxpayer Takeaway: Despite a disappointing outcome for taxpayer protections in Colorado, results in Texas and Washington show that voters value fiscal responsibility and prudent economic policy. In particular, voters recognize the importance of proactive safeguards, such as preventing future tax increases or enhancing the solvency of critical programs.
It’s worth noting local ballot measures can have fiscal consequences just as significant as statewide initiatives. For example, voters in Mecklenburg County, North Carolina, approved a 1% sales tax that raises an estimated $19 billion over 30 years. Furthermore, voters in Santa Clara County, California, approved a sales tax increase that is projected to generate $330 million annually. However, voters in Austin, Texas, voted against a 20% property tax increase that would have generated $110 million per year in additional revenue.
Regardless of how you feel about taxes, state and local ballot initiatives that impact your finances deserve careful consideration by voters. Yet, many state and local governments fail to provide voters with key details about the financial consequences of the policies up for a vote. NTU counted 562 ballot measures without any available tax impact estimates. This is a disservice to voters and erodes the public’s trust in the political process. State and local lawmakers should make reasonable adjustments to election laws so their constituents can make better-informed decisions in the future.