- Voters Resolve Numerous Tax-Related Ballot Initiatives
- November 25, 2016 | Authors: David D. Ebersole; David M. Kall; Susan Millradt McGlone
- Law Firms: McDonald Hopkins LLC - Columbus Office; McDonald Hopkins LLC - Cleveland Office
This election year was memorable for the obvious reasons, but also because there were so many ballot initiatives for voters to decide. We have explained many of these in the past several months, and now can finally offer resolution.
In Arizona, voters rejected Proposition 205, 52 percent to 48 percent, leaving recreational marijuana unlawful.
But in California, Proposition 64 passed, 56 percent to 44 percent. Likewise in Massachusetts, Maine, and Nevada.
In Massachusetts, 53.5 percent of voters approved of Question 4, and in Maine, supporters won more narrowly with just 50.4 percent of the voters approving Question 1. Nevada saw 54.5 percent of voters support passage of Question 2.
In Arkansas, Issue 6 passed, 53 percent to 47 percent.
Florida’s Amendment 2 had robust support, passing with 71 percent approval.
Lastly, although our July rundown of marijuana initiatives included Missouri, the Medical Marijuana Legalization Initiative there did not ultimately make the ballot.
San Diego, California
Voters rejected the 2016 City of San Diego Stadium Proposal for the Chargers proposal, which would have authorized public funding for a new San Diego Chargers stadium as a way to keep the team in the city. Fox5SanDiego noted that at least 66 percent approval was needed because the measure called for an increase in the hotel room tax, from 10.5 percent to 16.5 percent, and characterized the loss as a “powerful electoral blow.”
CBSSports reported that Rangers fans will be getting their new stadium, guaranteeing that the beloved team will remain in Arlington through 2053. A key feature of the $1 billion project, approved by 60 percent of voters, is a retractable roof. Existing sales, hotel, and rental car taxes, possibly a $3.00 parking tax, and a tax of up to 10 percent on ticket sales, will fund the new ballpark.
INCOME TAX INCREASES
In July, Cleveland, Ohio’s City Council approved the ballot question of whether to increase city income tax from 2 percent to 2.5 percent. Cleveland.com reported that the measure narrowly passed, and is expected to generate about $80 million annually. The new revenue will be used to expand city services, hire additional police officers, purchase new equipment, and pursue capital projects.
Maine’s Public Education Surcharge Initiative passed by the skin of its teeth, with 50 percent voting for, and 49 percent voting against. As a result, there will be a new 3 percent tax on individual income taxes for household income greater than $200,000; a household with an income of $280,000 will pay an additional 3 percent on $80,000 annually.
The expected $157 million in new revenue will support the Fund to Advance Public Kindergarten to Grade 12 Education.
Washington would have been the first state to tax carbon emissions. Voters rejected Initiative 732 by 58 percent to 41 percent.
OregonLive noted that despite the “moral responsibility to curb greenhouse gas emissions” that supporters imposed on Oregon residents, voters were not keen to pay the carbon emission tax of $15 per metric ton of emissions on the sale or use of certain fossil fuels and fossil-fuel-generated electricity. The tax would have gone up to $25 per metric ton in July 2018, and then 3.5 percent plus inflation each year until the tax reaches $100 per metric ton.
Last week, Wired addressed "The unlikely battle to pass the nation’s first carbon tax." Noting that the biggest obstacle to passage was “other environmentalists,” the magazine explained their concerns that “a revenue-neutral carbon tax wouldn’t raise money for investing in clean energy and communities, and that people of color didn’t get a fair say in crafting the policy.”
In California, Measure M, which will impose a one-half cent sales tax on Los Angeles county residents, passed 69 percent to 31 percent.
In June, Southern California Public Radio reported that Measure M would raise $120 billion. Supporters expect the funds to ease traffic congestion, modernize the city’s aging transportation system, pay for earthquake retrofitting, keep fares affordable for students and senior citizens, all while creating 465,000 new jobs throughout Los Angeles County.
The city of San Francisco put the Homelessness and Technology Tax, on the ballot, which would have imposed a 1.5 percent special tax on the payroll expense of technology companies engaged in business there, effective January 1, 2018. SFGate reported that while voters approved of the creation of the fund for housing and homeless services, the funding mechanism failed, by a vote of 65 percent to 35 percent. Proposition K would have raised San Diego’s sales tax by 0.75 percent, and raised $50 million a year for homeless services and $100 million a year for transportation.
UNIVERSAL HEALTH CARE
Amendment 69, or the Colorado Creation of ColoradoCare System Initiative, failed; only 20 percent of the electorate voted for it. The Denver Post suggested that supporters would try again when it quoted one of Amendment 69’s most ardent proponents, who said “[w]e learned a lot...And we’ll definitely be better next time.”
The amendment would have financed universal healthcare for Colorado residents, in part through an additional 10 percent payroll tax. Employers would have paid for two-thirds of tax, and employees would have paid for the rest, resulting in approximately $25 billion per year in revenue. Other non-payroll income would have also be taxed, at 10 percent.
GAS TAX ALLOCATIONS
Voters in New Jersey approved the constitutional amendment that dedicates all revenue from the recently enacted gas tax hike to transportation projects. As it now stands, only 10.5 cents of the 14.5 cents tax on unleaded gasoline, and 10.5 cents of the 13.5 cent tax on diesel fuel, are appropriated for transportation projects. The Gas Tax Dedicated to Transportation Funding Amendment requires all gas tax revenues to be deposited into the Transportation Trust Fund.
This will be an important step in helping New Jersey out of its infrastructure-funding catastrophe, even though, as we recently explained, the deal may ultimately create more problems than it solves.
SUGARED BEVERAGE TAXES
SFGate reported that the sugar tax measures on the ballot in three California cities all safely passed.
In Oakland, Measure HH will establish a one percent sales tax for funding city services. According to the ballot language, the measure would “maintain 911 emergency response times, fire stations, police officers/firefighters/paramedics, anti-gang/drug programs, after school, senior programs; upgrade first responder disaster communication; repair stormwater systems to prevent flooding, streets/potholes/parks; other general city services.” That language also establishes that Measure HH would provide $11.5 million annually for twenty years.
Likewise in Albany, California, where Measure 01 will impose a one-cent per ounce general tax, providing approximately $223,000 annually on the distribution of sugar-sweetened beverages and sweeteners. This would be used to fight diabetes, obesity, and tooth decay, especially in children, low income communities and communities of color.
In San Francisco, Proposition V’s new one-cent per ounce tax on the distribution of sugar-sweetened beverages will be used to defray the health costs associated with obesity, diabetes, heart and liver disease, and other diseases with which there is a direct link with sugary drinks. The city’s comptroller calculated that it would result in an annual tax revenue increase of approximately $7.5 million in fiscal year 2017-2018, and $15 million in fiscal year 2018-2019.
Finally, the Daily Camera reported that Boulder’s Measure 2H passed comfortably. It will impose a 2 cents per ounce soda tax, which is expected to raise $3.8 million in the first full fiscal year. The American Beverage Association, opposed to the measure, conceded, stating that “[t]his campaign was always an uphill battle, but we respect the voters' decision in approving this tax...It is disappointing that many of our beloved, local restaurants and businesses will feel the impact of this regressive tax and we thank them for their support. It is already expensive to live and work in Boulder and this tax will make it even harder."