December 2013

Election 2013: A Taxpayer’s Perspective

By John R. Hendrickson

In November voters across the nation participated in local elections. Although this off-year election was relatively quiet — with the exception of the Governor’s races in New Jersey and Virginia — it still has an important impact on policy, especially fiscal policy. Colorado had one of the more controversial ballot measures, Amendment 66, which:

would scrap the state’s flat rate income tax of 4.63 percent in favor of two rates, 5 percent on income up to $75,000, and 5.9 percent on income above that level. The $1 billion a year raised would go to schools and Pre-K programs.[1]

Amendment 66 was funded by progressives and “was supported by $1 million each from New York Mayor Michael Bloomberg and the Gates Foundation.”[2] The measure was also being supported by teachers unions, but the taxpayers of Colorado saw the danger of this measure and defeated it 66 percent opposing to 34 percent in favor.[3] The voters of Colorado also supported a tax on legalized marijuana. Proposition AA called for “a 15 percent excise tax and a ten percent sales tax on marijuana,” and this measure passed soundly by 65 percent to 35 percent opposing the tax.[4]

New Jersey, which overwhelmingly reelected Governor Chris Christie as Governor also passed a measure to increase their minimum wage to $8.25 per hour and place this in the state’s Constitution for inflation adjustments.[5] The Wall Street Journal also noted that “voters in SeaTac Washington, home of the Seattle airport, chose to raise their ‘living wage’ to $15.”[6] The result for both New Jersey and SeaTac “will be to price low-wage service jobs out of the market.” [7] This will hurt workers who are already struggling in an economy with high unemployment.

Other tax related ballot measures include:

  • Arizona. Tucson Proposition 401 removes local spending cap: 62 percent in favor and 38 percent opposed.
  • Florida. Hialeah voters are deciding whether to eliminate pensions for elected officials: 80 percent in favor and 20 percent opposed.
  • Ohio. Plain City is voting on whether to create a 0.25 percent local income tax: 49 percent in favor and 51 percent opposed.
  • Ohio. Rocky River Issue 58 would increase the local income tax from 1.5 percent to 2 percent: 49 percent in favor and 51 percent opposed.[8]

Several communities in California voted in favor of raising sales taxes. Voters in Ralls County, Missouri voted in favor of a sales tax increase while Taney County, Missouri rejected an effort to increase their sales tax.[9] Other interesting ballot measures included anti-fracking initiatives in some Colorado communities which would “ban fracking in this oil and gas shale rich state.”[10] Probably the most interesting ballot measure was in a few Colorado counties who were considering seceding from their state and forming a 51st State. The reason behind the secessionist move is rural-urban divide in Colorado.[11]

In total eleven counties in Colorado voted on “whether their commissioners should proceed with plans to create a 51st state.”[12] Six of the eleven counties rejected the plan, but the tension and frustration of rural voters who feel unrepresented is still strong.[13] Patrick J. Buchanan, a columnist and former adviser to Presidents Richard M. Nixon and Ronald Reagan, wrote that many “Red State Americans are moving away from Blue State America, seeking kindred souls to live among. Those who love where they live but not those who rule them are seeking to secede.”[14]

Buchanan noted that the counties wanting to secede and form a new state overwhelmingly supported Governor Mitt Romney in the 2012 presidential election.[15] In addition these rural citizens of Colorado are upset with “a new gun law that triggered a voter recall of two Democrat state Senators, state restrictions on oil exploration, and the Colorado Legislature’s party-line vote in support of gay marriage.”[16]

Stephen Moore, an opinion contributor to The Wall Street Journal, wrote that voters in “Cincinnati, Ohio, Hialeah, Florida, and San Francisco, California will decide on reining in local government pensions.”[17] “This could be a gauge as to whether voters are receptive to addressing the estimated $1 trillion-plus in municipal and state pension liabilities, noted Moore.”[18]

In reviewing the ballot and initiative results from the November 2013 election The Wall Street Journal wrote that the “results for freedom were mixed, but it’s clear that voters are in no mood to pay higher taxes if the money will be spent without accountability.”[19] The election results also demonstrate a nation that is still deeply divided over both economic policy and political philosophy.

John R. Hendrickson is a Research Analyst at Public Interest Institute.

The views expressed herein are those of the author and not necessarily those of Public Interest Institute or Tax Education Foundation. They are brought to you in the interest of a better-informed citizenry.

[1] Stephen Moore, “Ten election day ballot measures,” The Wall Street Journal, November 5, 2013, <http://online.wsj.com/news/articles/SB10001424052702304391204579179863023688006> accessed on November 6, 2013.

[2] Editorial, “Rocky mountain highlight,” The Wall Street Journal, November 6, 2013, <http://online.wsj.com/news/articles/SB10001424052702303309504579182091428213278> accessed on November 7, 2013.

[3] Ibid.

[4] Lyman Stone, “State and Local Ballot Initiative Results, November 2013,” Tax Foundation, November 6, 2013, <http://taxfoundation.org/blog/state-and-local-ballot-initiative-results-november-2013> accessed on November 8, 2013.

[5] Moore.

[6] “Rocky mountain highlight.”

[7] Ibid.

[8] Stone.

[9] Ibid.

[10] Moore.

[11] Monte Whaley, “Colorado’s 51st-staters turn to legislation to fix urban-rural divide,” The Denver Post, November 6, 2013, <http://www.denverpost.com/breakingnews/ci_24470204/51st-staters-now-turn-legislation-bridge-urban-rural?source=pkg> accessed on November 8, 2013.

[12] Ibid.

[13] Ibid.

[14] Patrick J. Buchanan, “Is Red State America Seceding?” Creators Syndicate, October 11, 2013, <http://www.creators.com/conservative/pat-buchanan/is-red-state-america-seceding.html> accessed on November 8, 2013.

[15] Ibid.

[16] Ibid.

[17] Moore.

[18] Ibid.

[19] “Rocky mountain highlight.”