Fiscal/Budget Issues

2009-2010

To see fiscal and budget ballot measure activity in 2009 and 2010, please click here.

 

The national economic downturn has hit states across the country hard with lost revenue and massive budget cuts. As a result, budget deficits are preventing states from investing in priorities such as job creation, education, health care, roads and bridges, and police and fire protection.

The anti-government right-wing have sought to use the bleak budget picture as an opportunity to ratchet down even harder as states look to find the revenue necessary to protect priorities, create jobs, and get their economies moving again.

With the economy the number one issue on voters’ minds, voters rejected so-called Taxpayer Bill of Rights (TABOR) ballot measure in Maine 60% - 40% and Washington 55% - 45%.

These bellwether votes in Maine and Washington show that the right wing remains out of sync with moderates and independents and that the tea party anger that has been hyped for months doesn’t translate into majorities and election victories.

 

TABOR measures have been a central tenet of the right wing agenda. Similar initiatives were defeated at the ballot in Maine, Nebraska, Oregon in 2006 and most recently in California. Even with aggressive paid signature drives, they failed to make the ballot in Ohio, Missouri, Oklahoma, Montana, and Michigan. Between 2005 and 2009, TABOR was introduced legislatively in 28 states. Colorado remains the only state to have adopted this terrible idea (which voters opted to suspend parts of in 2005).

In Oregon there will be a special election held on January 26, 2010 to approve a progressive tax fairness reform plan passed by the legislature that protected 97.5% of taxpayers.

Voting Yes on the tax fairness measures (66 and 67) will protect nearly $1 billion in vital services like education, health care, and public safety. These funds preserve class sizes, save jobs for teachers, provide seniors with in-home care, and provide health care for thousands of Oregonians through the Oregon Health Plan.

In a year where the national economy has hit state budgets hard across the country, Oregon's tax fairness reforms protect those who have been hit the hardest--seniors, children, and the unemployed--without putting more of a tax burden on the middle class in these difficult times. In addition to excluding the first $2,400 of unemployment payments from state income taxes for those that have lost their jobs in this tough economy, the reforms increase the $10 corporate minimum income tax for the first time since 1931. The marginal tax rate on Oregon's wealthiest individuals would also be raised by 1.8%.

Some large corporations and high-paid lobbyists are working to overturn these legislative reforms. Voting No on measures 66 and 67 will result in tax cuts for corporations and wealthy individuals, and deliver massive cuts to vital services like education, health care, and public safety.

Three states - Florida, Maine, and Oregon- have fiscal measures that are qualified for the fall 2010 ballot.

A number of states are also considering either legislative referrals or ballot initiative for the 2010 election. Rigid revenue and spending caps and other regressive tax measure could be placed on the ballot in a number of states, including Arizona, California, Colorado, Florida, Kansas, Michigan, Minnesota, Missouri, Montana, Oregon, and Washington.

2008

Massachusetts

In Massachusetts, an initiative that would have repealed the income tax was rejected by a wide margin- 70%-30%. This proposed constitutional amendment would have reduced the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009, and would eliminate the tax for all tax years beginning on or after January 1, 2010. The initiative would have eliminated $12.7 billion in state revenue, or 40 percent of the state's budget, and would have likely led either to deep cuts to investments in education, public safety, roads and bridges and many other areas, or to massive property tax hikes. Voters rejected a similar question on the 2002 ballot.

Opponents of the measure educated voters on the potential negative impact the initiative would have had on the state's investments in education, health care and infrastructure- teacher layoffs, school closings, cuts to higher education and worker training programs, road and bridge repairs, cuts to health care services and the roll-back of funding for local police and firefighters.

Oregon

In Oregon, an income tax initiative, Measure 59, also went down in defeat with voters rejecting the measure 63%-37%. Oregon voters rejected a similar proposal, Measure 91, on the November 2000 ballot.  

The initiative sought to create an unlimited deduction for federal income taxes on individual taxpayers' Oregon returns beginning in 2010. The deduction would have applied only to federal income taxes paid on income taxed in Oregon and does not apply to corporate excise/income taxes. Had the measure passed, the average tax cut for the richest one percent would have been $15,809, while the average tax cut for the middle class would have been $1. The 40 percent of Oregonians with the lowest income would have received no tax break.

The initiative was being pushed by Bill Sizemore, a long time ballot initiative activist who ran for governor in 1998 as a Republican and lost with only 30% of the vote.

In 2000, Sizemore was the subject of a racketeering lawsuit against two of his organizations: Oregon Taxpayer's United and the OTU Education Foundation. The jury found Sizemore's organizations guilty of racketeering, and the organizations were fined approximately $2.5 million. Sizemore refused to pay the fines and attempted to avoid the liability by changing the name of his organizations to Oregon Taxpayers Association and carrying on with business as usual. Without a trial, Sizemore was found personally liable for his organization's civil racketeering liability, and a judge shut down his education foundation. Nearly a million dollars were added to the fine as a result of Sizemore's resistance to earlier court orders/decisions.

According to estimates from the state and the nonpartisan Oregon Center for Public Policy, Measure 59 would have cut state revenues and cost the state budget $1.1 billion to $2.4 billion every two years, resulting in overcrowded classrooms, more Oregonians without health coverage and higher college tuition. The low-end $1.1 billion revenue cut estimate was equivalent to the total funding that Oregon's public universities will receive from the state in the current biennium or equivalent to cutting the salaries of all Oregon K-12 public school teachers by 70 percent.

North Dakota

North Dakota‘s ballot included an initiative that was intended to cut the income tax rate by 50% and cut the corporate income tax by 15%. The initiative was defeated by voters 70%-30%.

The measure, Leave No Taxpayer Behind, would have greatly reduced the funds available to invest in state priorities like education and health care, or would have required large increases in other taxes, such as sales taxes and property taxes, at a time when working families are feeling squeezed by rising costs of food, gas and health care.

Most of the benefits of this failed measure would have benefited a small number of high-income individuals and large corporations in the state. The relatively modest benefits that would have gone to middle-income families- less than $15 per month by one estimate- would have likely been wiped out by increased tuition costs at public universities, reduced access to health services, increased sales and/or property taxes.

The North Dakota initiative was advanced by the Washington D.C. based Americans for Prosperity, a political arm of the big oil, chemical and mining corporation, Koch Industries.

Koch was also behind an Oil Tax constitutional amendment (Amendment 1). The amendment was defeated by a margin of 64%-36%. The initiative would have inserted into the state constitution a proposal that would lock the state's oil money away.

Koch has a checkered past in North Dakota and their involvement proved fatal to the effort. In 1995 the state Supreme Court found that Koch failed to record and pay taxes on 137,822 barrels of oil it collected from small producers in the state.  The tax commissioner ordered Koch to pay taxes on the oil after an audit showed that Koch was delivering more oil than it was reporting it had collected from producers. Subsequent events indicated that this was oil that Koch received through a systematic practice of underestimating the amount of oil it took from its clients.

In addition, a federal jury found in 1999 that Koch Industries had systematically under-reported the amount of oil it was taking from clients in tribal and federally managed lands.  One of the allegations was that between 1981 and 1989 Koch took 492,742 more barrels of oil than it reported from 286 producers in North Dakota alone. Nearly 9,000 producers nationwide allegedly were defrauded. The jury found that Koch made more than 24,000 false claims as part of this process. 

New Hampshire

In New Hampshire, voters in two municipalities gave a split verdict on a revenue cap requiring local officials to restrict revenue and spending for community services( although 9 measures were attempted and rejected). In Somersworth the revenue cap lost 58%-42% and in Rochester the cap passed 70%-30%.

Rochester will now have to deal with a budget cap that will threaten or freeze investments in road maintenance, public safety through police and fire departments, parks, libraries, and economic development. The initiative will cap municipal property tax increases to the rate of inflation plus population growth.

The initiative didn't take into account rising health care, gas and energy costs that are exceeding the rate of inflation and burdening local budgets. It is now likely that tax-payers will bear the brunt of higher user fees that could become a backdoor way of paying for the alleged ‘savings' a tax cap will bring.

Colorado

In Colorado, voters weighed in on a ballot initiative that sought to fix a problematic component of the TABOR initiative that passed in 1992. That measure capped the growth of spending and required state and local agencies to refund money to taxpayers when revenue exceeded the cap. It also addressed a constitutional amendment that voters passed in 2000 which required funding increases to raise the state's support for public schools to the national average. When Colorado's economy took a downturn, the two initiatives came into conflict as legislators found themselves slashing other programs to keep the promise to public schools.

This year's Amendment 59, SAFE (Saving Account for Education) would have created a savings account for public education. It proposed dedicating a permanent source of funding for education and preserves the right of citizens to vote on taxes and the constitutional requirement to balance the budget. The savings account for schools would have been filled when economic times are good and spent when times are bad.

The amendment was defeated at the ballot box 58%-42%, forcing legislators to continue pitting investments against education against other priorities.