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TBED and the 2012 Ballots

October 03, 2012

Voters in 37 states will decide on more than 170 ballot measures this year, many of which are related to tech-based economic development (TBED). Tax measures seem to be dominating ballots this year, with questions relating to both decreases and increases for sales, property and income taxes. Several states are counting on voters to agree to temporary increases to help fill budget deficits and ensure steady funding for education.

SSTI has broken the ballot measures down by topic area, including Economic Development Incentives, Energy, Higher Education and Capital Bonds, Statehood and Taxes.

Economic Development Incentives
Two states, Alabama and South Dakota, will pose to voters a question regarding more state authority to dole out economic development incentives for job creation by recruiting larger projects or encouraging businesses to expand.

Gov. Robert Bentley recently told a state road-building group that approval of Amendment 2 in Alabama is essential to the state's efforts to create new jobs, reports the Ventura County Star. Approval of the amendment would allow the state to refinance bonds for industrial development projects, making $150 million available to recruit new industries.

In South Dakota, Referred Law 14 would establish a fund to provide grants for construction of large economic development projects such as laboratories and facilities for testing, manufacturing, power generation, power transmission, agricultural processing, and wind energy. If passed, 22 percent of the state's contractors' excise tax revenues (about $17 million) would be transferred from the general fund to the new fund from which the South Dakota Board of Economic Development could make grants to business projects or encourage companies to relocate in the state.

Only one state has a qualified energy measure on the 2012 ballot. Michigan voters will be asked to approve an amendment to the state constitution increasing the minimum standard for renewable energy. Proposal 3 would require utilities to provide at least 25 percent of their annual retail sales of electricity from renewable energy resources by 2025, up from 10 percent. Proponents say the measure would create new jobs and reduce electricity costs for manufacturers.

Higher Education and Capital Bonds
Universities in Maine, New Jersey and New Mexico are pushing for state funding to invest in science buildings and other infrastructure needed to expand research capacity and improve competitiveness. Research universities in Washington are seeking new revenue streams by investing in private companies or stock and South Dakota voters will be asked to approve more incentives for STEM teachers.

Question 2 in Maine would allow for an $11 million bond for higher education, including $3 million to expand the state's community college system. This includes an expansion of precision manufacturing programs to help fill existing high-wage jobs, according to the Maine Community College System. The remaining funds would be used for a new animal and plant diagnostic facility at the University of Maine and additional capital improvements at Maine Maritime Academy.

Backed by New Jersey Gov. Chris Christie, Public Question 2 asks voters to approve $750 million in higher education borrowing to build and renovate campus facilities, including research laboratories. Public research universities would share the largest allocation of $300 million, if the referendum passes.

New Mexico voters will decide on a measure authorizing bonds to make capital expenditures for higher education improvements not to exceed $120 million. A similar measure was rejected by voters two years ago.

South Dakota Referred Law 16 would establish a teacher scholarship program for college students who commit to teach in critical need subject areas and provide school districts with funding to reward math and science teachers through bonuses for excellent teaching.


A constitutional amendment in Washington (SJR 8223) would lift restrictions on research universities' ability to invest certain public funds in private companies or stock. The goal is to help build new revenue streams for the University of Washington and Washington State University without raising taxes.

Voters in Puerto Rico will weigh in on a two-part referendum asking voters (1) if they want to change the political status of the country and (2) what that status should be: statehood, independence or sovereign free association. Gov. Luis Fortuño supports the statehood amendment.

Tax increases to generate more revenue for balancing state budgets and funding education is a top priority for many states, including Arizona, California, Oregon and South Dakota.

Known as the Quality Education and Jobs Act, Proposition 204 in Arizona would renew a 2010 voter-approved one-cent sales tax to provide dedicated funding for education, transportation infrastructure and human services. The measure also would prevent lawmakers from reducing current K-12 and university funding levels. Supporters say passage of the act would strengthen the state's economy by making sure students are equipped for the workforce.

One of the more well-known measures to appear on state ballots is California's Proposition 30 — a merger of two previously competing initiatives: the "Millionaire's Tax" and Gov. Jerry Brown's tax increase proposal. The measure temporarily raises the state's sales tax and imposes additional income taxes on top earners to close a $15.7 billion state-budget shortfall. Provisions include raising the sales tax to 7.5 percent from 7.25 percent for four years and creating four high-income tax brackets for those making over $250,000 to be in effect for seven years. Estimated revenue from the measure varies between $6 billion annually estimated by the Legislative Analyst's Office to nearly $9 billion projected by the governor's office.

If the measure passes, revenues would go toward K-12 education, community colleges and to ensure public safety funding, thereby freeing up funds for other state spending commitments needed to shore up the budget. If the measure is defeated, state spending in 2012-13 would be reduced by about $6 billion, with almost all the reductions related to education.

Another California measure, Proposition 31, would establish a two-year budget cycle and prohibit lawmakers from creating expenditures of more than $25 million unless offsetting revenues or identifying spending cuts occur.

A constitutional amendment in Oregon would allocate the corporate income and excise tax "kicker" refund to the general fund to provide additional funding for K-12 public education, if approved by voters. Current law requires an automatic kicker refund of corporate income and excise tax revenue when that revenue exceeds estimated collections by 2 percent or more. The measure does not change the constitutional personal income tax kicker provision that requires a refund to individual taxpayers.

Initiated Measure 15 in South Dakota seeks to implement a 1 percent sales tax increase (from 4 percent to 5 percent) beginning in 2013. The additional tax revenue would be split between K-12 education and Medicaid.

Alabama, Arizona, California, Maine, Michigan, New Jersey, New Mexico, Oregon, Puerto Rico, South Dakota, Washingtonelections, tax credits, energy, higher ed, capital, state budget