Spending Caps, Tax Measures on Ballot in Many States

After choosing their candidates on November 7, voters will check yes or no on ballot propositions that, along with more familiar bond issue proposals, would increase the minimum wage, support property rights, prohibit same sex marriage, and limit tax increases. While Taxpayer Bill of Rights (TABOR) proposals that put caps on future spending have received national attention, proposals that will affect property taxes and increases in personal exemptions are much more popular this year.

Arizona voters will have to make their way through 19 ballot propositions, the largest number of any state. In California, where ballot initiatives have historically had a big impact on state government, voters have been mailed thick guides to help them understand the 16 initiatives on the ballot, the Los Angeles Times says. There are 14 initiatives on the ballot in Colorado, another state where legislating through initiatives is popular, and 10 each in Oregon, Washington and Nevada, according to stateline.org.

Some of the 207 initiatives that Ballotwatch.com says voters will be considering, like the ban on same sex marriage and the traditional bond issues, are straightforward, but others, including many of the tax proposals, are so complex that even after reading government-supplied materials and viewing television ads from supporters and opponents, voters may have difficulty understanding the issues. Some of the property tax and personal exemption measures are among the most complex issues.

Property Tax and Personal Exemption Measures

Increases in property taxes, which may result from the increases in home values over the past few years, as well as pressure on local governments to provide services for a growing population, are the focus of initiatives in many states. Some are simple, like the Georgia homestead exemptions for senior citizens. This measure would extend a state “tax exemption on the homesteads of those 65 and older to include the primary residence and no more than ten contiguous acres of land,” according to the summary on stateline.org. A Tennessee measure “would allow, but not require, the legislature to implement a property tax relief program for those 65 and older,”

A more complex property tax measure is on the ballot in North Carolina. The proposal would limit the increases in property value for the purposes of imposing property taxes to no more than 15 percent every five years, according to Charlotte.com.

Arizona’s Proposition 101, the most complex property tax measure, would limit the growth of local government budgets by adjusting a formula originally passed in 1980 that limited over-the-year property tax increases to 2 percent. Any increase over that amount would require voter approval. The adjusted formula would make actual spending for 2005 the base year. Under the current formula, local governments that have not raised taxes to the full 2 percent each year had the right to increase up to the level of their “unused capacity, according to the Arizona Daily Star.”

Like most cities in Arizona, Tucson doesn’t have any unused capacity, but smaller, growing communities, like Glendale, Goodyear and Buckeye, will lose between 30 and 61 percent of taxing capacity.

“We’re there already; we’ve been there pretty much since ’04,” City Budget Director Jim Cameron told the Daily Star. “For those cities at the max, there is no impact. Those who rely on primary property tax and are far from the limit are impacted.”

In Washington, House Joint Resolution 4223 would increase the amount of business equipment that is exempt from property tax from $3,000 to $15,000. The measure has the support of both the Democrat and Republican parties, and is expected to pass, according to The Olympian.

A constitutional amendment allowing local governments to give tax breaks of up to 50 percent to people who build in depressed areas is on the ballot in Virginia.

On the ballot in Oregon, along with a controversial Taxpayer Bill of Rights Proposal, is a proposition, Measure 41, that would change the way personal exemptions are calculated. Oregon taxpayers currently take an inflation-adjusted exemption credit against the taxes they owe for themselves, spouses and dependents, typically $636 for a family of four, the Eugene, Oregon, Register-Guard reports. Oregon’s Measure 41 proposes that taxpayers be allowed to choose between the current method and the federal deduction, a method that would reduce taxes for most taxpayers, but also reduce the state’s revenue.

Taxpayer Bill of Rights (TABOR) Initiatives

Taxpayer Bill of Rights initiatives, modeled on the Colorado TABOR, a constitutional amendment passed in 1992 that limited increases in state spending to the sum of the rate of inflation and population growth, are on the ballot in Maine, Nebraska, and Oregon. Similar measures were removed from the ballots in Michigan, Montana, Nevada and Oklahoma, when signatures on petitions were called into question

The Colorado TABOR was suspended for five years in 2004 by a vote of state residents because it caused a budget shortfall during the last recession. Colorado does not have a rainy day fund; budget surpluses are returned to taxpayers.

The three TABOR propositions differ from the Colorado cap on state spending in some significant ways. Maine’s version establishes a state law that can be amended by the state legislature, but any subsequent increase in taxes requires a two-thirds majority of the legislators, the Portland Press Herald says. While courts in Colorado have allowed local governments to waive the revenue limits for several years and permanently dedicate revenue streams outside the cap, changes in Maine’s law must be made every year through a referendum.

Nebraska’s TABOR proposition applies only to state spending from revenue from the state sales and income taxes. It could force responsibility for spending increases on local governments, potentially leading to increases in property taxes, according to an editorial in the Journal Star.

Like the Maine version, Oregon’s Measure 48 is also a constitutional amendment, and can only be changed by a two-thirds vote of the legislature. Spending increases in Oregon over the two year period, covered by their budget cycles, have averaged 14 percent. Under the TABOR initiative it would be reduced to 10 percent. Many Republican politicians, including Ron Saxton, the candidate for governor, oppose the measure, the Oregon Statesman Journal reports.

“Orphan Initiatives” and Propositions to Curtail Propositions

The process of getting a citizen’s initiative on the ballot can sometimes leave even supporters shaking their heads. California’s Proposition 88 would levy $50 on every parcel of real estate in the state to support education, a measure that made it to the ballot with the financial backing of Netflix founder Reed Hastings and venture capitalist John Doerr, the Los Angeles Times reports. When it became apparent that the measure was unpopular, the wealthy backers stopped providing support, and it is unlikely that even one television ad will be aired in favor of the measure.

The parcel tax is termed an “orphan initiative” in California, where millionaires, unions, large corporations and activist groups spend large sums to get a proposition on the ballot and then abandon it when the measure seems unpopular or is faced with competing initiatives.

“It adds to the overall feeling that the whole process is loony,” said Barbara O’Connor, a professor of Communications at Cal State-Sacramento, according to the Times. “The public is getting really tired of legislators and special interests using the initiative process so cavalierly.”

Initiatives themselves are the subject of proposed constitutional amendments in two states, Colorado and Florida. Amendment 38 in Colorado expands initiative rights to county and local governments and limits disqualification of measures for violating the “single subject” rule, according to Ballotwatch.com. Florida’s Amendment 3, sponsored by the state legislature, makes it harder for initiatives to pass, requiring a 60 percent approval rate. Florida’s TaxWatch is supporting the amendment, which is opposed by Common Cause, the Associated Press reports.

But in the spirit of a plague on everyone’s house, a nonbinding measure, asking if citizens would like to adopt the initiative process in Rhode Island, was removed from the ballot when the state legislature stripped the governor of the power ever to place such measures on the ballot, Ballotwatch.com says.

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