SSTI provided an overview of selected ballot initiatives in an Oct. 7 article. With the election behind us, we revisit the topic to see what voters decided.
Keeping a lid on most state revenue options
Across the country, many voters on Nov. 3 just said no to ballot issues regarding new progressive tax policies in which the wealthiest individuals pay a larger percentage of income than average Americans struggling with affordability in the current economy.
In several other cases, voters didn't approve measures that would have significantly hampered their state's ability to pay for basic services. For example, Missouri voters overwhelmingly rejected Amendment 7, a measure to gradually eliminate its income tax. Initiative 645 in Washington to repeal the recently enacted millionaire's tax went down with 58% of voters against the elimination. The outcome for Colorado's progressive tax measure is more confused and discussed at the bottom of this section.
But new taxes didn't do well, and bars on future taxing ability went down in most cases. California’s one-time 5% billionaire’s tax on wealth lost with 55% against. Golden state voters did, however, pass Proposition 3, which held the current three top marginal tax rates in place indefinitely. The higher rates first put into place in 2021 were scheduled to expire in 2030.
A constitutional amendment in North Carolina passed with nearly 62% approval to cut the maximum allowable state income tax rate to 3.5%; presently, everyone pays a flat 3.99% rate.
With the passage of Amendment 2, two-thirds of Tennessee voters barred the state from ever issuing property taxes.
Another possible exception to the just say no pattern on new taxation is presenting in Colorado, where Amendment 87, which would establish a graduated income tax, holds onto a razor-thin approval vote at press time. A competing and conflicting measure that caps the state's income tax rate at 4.4% also seems to be passing and with more affirmative votes. Full vote counts were not posted at the time of writing this article, so the final outcome is not known yet. Colorado voters did approve an increase in the TABOR cap to allow more state tax revenue to be spent on K-12 education.
Borrowing approved for R&D, libraries and higher ed capital costs
While voters in most states didn't seem to want to pay for state expenditures through taxes directly, they appear happy to have their states borrow money with decades of interest to pay for investments made today—for most items on the ballot. Economic development is the exception and is discussed in the closing section of this article.
Californians voted 55.7% in favor of Proposition 38, which authorizes the state to issue $8.4 billion in general obligation bonds to support immunology and immunotherapy research. Half of the funding is earmarked for research related to cancer, heart disease, and Alzheimers disease. Another requirement, but unrelated to the previously described earmark, is that half of the funds will also be allocated to “an immunology and immunotherapy research institute affiliated with the University of California.” Opponents of the measure expressed concern about this provision providing exclusivity for so much public money and provisions that granted resulting IP rights entirely to that institution rather than the researchers, contractors, partners in the research, or the state as a means to recover its costs. The other half of the funds is to be distributed as grants to other California-based public and nonprofit researchers in the field. The League of Women Voters of California opposed the measure because the state could incur 20 years of debt payments potentially reaching $600 million annually, with no direct upside.
New Mexicans voted favorably by wide margins for three borrowing measures put before them. Question 2 will allow the state to issue $20 million in bonds to enhance public library resource acquisitions. Passing Question 3 authorizes $230 million more in bonds for capital improvements and acquisitions for tribal schools, higher education institutions, and special schools. The first bond question put to the voters and approved raised $30 million for senior citizen facilities. All three general obligation bonds are to be funded by statewide property tax.
Rhode Island voters passed a $275 million bond issue to support specific construction projects at three institutions of higher education. Ballotpedia lists the three projects as:
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$165 million in bonds to fund the construction of a new integrated health building for the University of Rhode Island;
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$60 million in bonds to fund the construction of a workforce innovation center at the Community College of Rhode Island, Warwick campus; and
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$50 million in bonds to fund the construction of a student success and career readiness center at Rhode Island College.
Unfavorable outcomes for economic development measures
Setting aside the strong local distaste for data centers that exploded as an issue in this year's state elections (see Laura Graham's Digest piece), or perhaps because of voter frustration with economic developers ignoring local concerns with siting and subsidizing through incentives projects such as these massive centers and the necessary power and water infrastructure, ballot measures in Arkansas and Rhode Island specifically focused on conventional economic development practices met defeat at the ballot box on Nov. 3.
Arkansas Issue 3 would have amended the state constitution to authorize the creation of local economic development districts with direct bonding authority and related powers to support projects within their boundaries. The voters narrowly rejected the Amendment with approximately 50.7% voting against.
In Rhode Island, Question 3 would have authorized the state to issue $100 million in bonds to fund site development and infrastructure improvements for economic development projects, with $45 million specifically targeting ocean-related projects, development and issues. The measure failed with only 47.56% in favor.