
Along with choosing who should be our next President, voters in many states were confronted last Tuesday with a range of state ballot initiatives put forth by special-interest groups.
There were also proposed tax cuts or tax hikes in seven states, but in all but two of them, the measures failed to pass, in marked contrast to the call for “change” that was a constant theme in the Presidential race.
During these troubled times, you might think that voters would jump at the chance to eliminate their state’s personal income tax, or at least cut it in half. Nope. Level-headed voters, perhaps fearing the depth of cuts in state and local government programs, nixed the initiative in Massachusetts, where elimination of the property tax would cut state revenues by about 40%, and in North Dakota, where voters said “no, thanks” to cutting the personal income tax rate in half and cutting the corporate income tax rate by 15%.
Oregon voters also declined to endorse a measure that would have lifted the cap on how much of their federal income taxes they could deduct on their state income taxes. The move would have cut state revenues by about 14% by 2011.
When proposals to raise taxes surfaced in Colorado, Florida, Minnesota and Montana, voters in three of the five states said no.
Colorado voters rejected three proposed tax hikes with very different implications. They included a sales tax increase to fund programs for people with developmental disabilities, an increase in severance taxes paid by the oil and gas industry, and the elimination of rebates taxpayers get when the state takes in revenue that exceeds a specified cap.
Florida voters turned down an initiative that would let county voters approve a sales tax to benefit community colleges.
Voters in Minnesota approved a sales tax increase to benefit natural resources and the arts, while in Montana, voters gave the thumbs up to fund the state university system.
While we could argue the merits of individual ballot initiatives, it seems clear that voters were mostly reluctant to raise taxes, but even more cautious about cutting them.
Nationwide, taxpayers may be trying to walk a fine line by balancing the need for a reasonable level of municipal and state-funded services with an eagle eye toward prudent spending.
Are you following a similar approach in managing your personal household budget?