Just Say No
Yesterday was election day, and while tax and spending themes played a role in congressional and gubernatorial contests, voters in many states also got to weigh in on budget issues directly. There were about a hundred ballot initiatives affecting state budgets, some increasing states’ abilities to raise revenues or determine spending levels and others curtailing them. For better or worse, in most cases the voters said no and the status quo remained. As the New York Times’ David Leonhardt writes, “voters mostly chose the status quo, rejecting measures that would have raised new taxes but also those that would have repealed existing ones.” Most ballot measures that would have drastically curtailed tax revenues went down to defeat. Colorado rejected the three tax initiatives that would have slashed revenues and crippled state and local government but would have restored the state’s place at the top of the anti-tax heap. Massachusetts voters rejected halving the state’s sales tax, but did get to let off some steam by repealing a sales tax on alcoholic beverages amidst threats of people driving up to New Hampshire to buy their booze.
Washington might have done the most damage to a precariously balanced budget, rejecting a tax on high-income earners and repealing taxes on candy, soda, and bottled water– thus opening up a $4.5 billion shortfall in its budget. Oklahomans sensibly rejected both a measure mandating that education spending must equal that of neighboring states (which would likely have required cuts in other programs) and the responsive ballot measure that would have freed the Legislature from having to base expenditures on pre-determined formulas—a subtle yet extreme way to just say no to the proposed ear-marking. Florida and Arizona also rejected measures that would have freed up some money by easing ear-marks.
The one exception to maintaining the status quo may have been California. While they did reject new taxes (increased vehicle license fees and revenue from legalizing marijuana) and made it harder to continue playing the creative accounting games used in the past (requiring voter approval to pass new fees and charges and taking local government and transportation funds off the table), Golden State voters also lowered the vote required to pass a new budget from two-thirds to just a simple majority. Maybe that will enable the state to pass a truly balanced budget on time next year, and no, I haven’t been smoking any substance that Californians just voted to keep illegal.