Tax Ballot Measures Ask Voters to Decide

The fall harvest season has brought a bumper crop of tax ballot measures in states across the nation(though sadly, no tax-themed seasonal lattes.) We’ve already covered a ballot proposal in Washington, a potential ballot proposal in North Carolina, and a 2016 proposal in Maine – check out the links to get the scoop. Today, we’re looking at measures in Texas and Utah, and providing an update on Washington.

Texas: Texas voters will consider two proposals with significant ramifications for roads and schools. Proposition 1 would increase the homestead exemption for public school property taxes from $15,000 to $25,000. The average savings for Texan households would be about $126, but schools systems across the state would lost $1.2 billion per biennium – money that the state would have to replace from the general fund. A state judge has already ruled that the state’s low level of school funding is unconstitutional, and Proposition 1 will make it harder to even maintain the status quo – all at a time when the needs of Texas’s schoolchildren are growing. Compounding the budgetary pressure is Proposition 7, which would divert sales tax revenue from the general fund to the Texas Department of Transportation for highway maintenance and construction, but would not raise any new revenue. This could have the unintended effect of weakening spending in other important areas that are paid for out of the general fund (including schools), particularly since low oil and gas prices are hurting the state’s bottom line. A better approach would be raising the state’s gasoline tax, which has remained unchanged for 24 years and has failed to keep pace with inflation.

Utah: Utah voters in 17 counties will decide whether or not to raise their sales taxes by 0.25 percentage points in order to fund the Utah Transit Authority. Legislative analysts say the plan will cost affected Utahans $50 a year on average. The legislature voted to allow counties to decide if they wanted to include the measure, Proposition 1, on the ballot and 17 of Utah’s 29 counties followed through. If passed by a county’s residents, the sales tax increase will only apply to that county. If approved, 40 percent of the revenue raised will support the transit authority. Another 40 percent would go to cities for local roads and other transportation projects. The final 20 percent will go regional transportation projects.

Washington: Tim Eyman, the author of Initiative 1366 and previous supermajority requirements, is a lightning rod in Washington state politics. I-1366 would force the legislature to amend the state constitution to require a supermajority vote for tax increases. If legislators refuse to amend the constitution, the ballot initiative would automatically cut the sales tax rate by a penny, leaving the state $8 billion poorer at a time when the Washington Supreme Court says the state is not meeting its constitutional obligation to K-12 students. Already, a mix of uncertainty over funding and questions swirling around Eyeman have caused many supporters of previous anti-tax measures to withhold their support from I-366. The Association of Washington Business and the state’s grocery store association are both keeping out of the debate over the proposal over concerns about how their donations were used in past efforts. If the initiative passes anyway, opponents hope that the courts will eventually rule I-1366 an unconstitutional abrogation of legislative authority.