Ballot Questions Will Have Big Impact on State Services

October 26, 2010 at 11:31 am

Most of the attention in this election season is going to candidates, but ballot questions in several states will greatly affect these states’ ability to maintain public services.  Some of the ballot measures would make it easier for states to balance their budgets without excessive cuts in areas like education and health care.  Others would make it much harder.

  • In California:Proposition 25 would begin to address the state’s perpetually gridlocked budget process by allowing the legislature to approve a budget by a simple majority vote.  The current two-thirds requirement has often enabled a small number of legislators to hold the budget captive.

    Proposition 26 would go in the opposite direction by extending the two-thirds requirement, which now applies to proposed tax increases as well as the budget, to cover proposed increases in fees and other charges.

    Proposition 24 would give the state additional revenue by eliminating three special tax breaks for corporations.

  • In Colorado, three ballot questions would restrict state and local governments’ flexibility to meet major needs:Proposition 101 would sharply reduce vehicle registration fees as well as telecommunications taxes and fees.

    Amendment 60 would eliminate all property tax increases that voters have approved since 1992 and cut property taxes in half over the next decade.

    Amendment 61 would prohibit all future state borrowing and require voter approval of local borrowing.

  • In Washington State:

    Initiative 1098
    would raise revenues for health care and education by establishing a state income tax for incomes above $400,000 for married households and above $200,000 for individual filers.

    Initiative 1107
    , in contrast, would repeal several sales tax increases the legislature approved in the recent session in order to avoid deeper cuts to services.

    Initiative 1053
    would require a two-thirds legislative vote (or voter approval) to raise taxes or fees in the future.  (Voters adopted a two-thirds requirement in 2007, but the legislature suspended it earlier this year to help it close the state’s budget gap through a combination of spending cuts and revenue measures.)
  • In Massachusetts:Question 3 would cut the state’s sales tax rate in half, to 3 percent from 6.25 percent.

These proposals reflect states’ ongoing debates over how to meet balanced-budget requirements when the longest, deepest national recession since the Great Depression has depressed revenues while increasing people’s need for services.  State tax revenues remain 13 percent below pre-recession levels.

If states cut spending deeper and deeper, they not only hurt families struggling to get by, but also slow the economy and fail to make investments in areas like education and infrastructure that will help them make the most of prosperity when it returns.  That’s why a balanced approach, which includes strengthening state tax systems to raise more revenue, is the better choice.

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More About Jon Shure

Jon Shure

Jon Shure is Deputy Director of the State Fiscal Project.

Full bio | Blog Archive | Research archive at CBPP.org

1 Comments Add Yours ↓

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  1. jonathan #
    1

    As a note on Massachusetts, where I live, the sales tax has two very large exemptions: food and clothing. This makes the actual per capita sales tax among the lowest of any state with a sales tax, meaning the rate is deceiving. It’s set up this way to reduce the impact on the poor and on families with children because they spend more of their income on food and clothing. If we eliminated the exemptions, a 3% rate would raise about the same amount, according to what I’ve read. Changing exemptions is not on the ballot, so the effect would be to reduce the sales tax to way below the lowest per capita of any state with one.



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