What do we make of many local tax measures passing in these tough economic times? According to the preliminary review by the League of Cities’ Local Government Finances Almanac, two-thirds of fifty-seven local taxes and bonds passed Tuesday.
Local voters said “yes” to a number of tax measures less than six months after statewide voters rejected continuing a number of temporary tax increases that were part of the February state budget deal. The “yes” on taxes also comes in the shadow of polls that indicate voters are not interested in raising taxes or making it easier to raise taxes.
It is telling that the “yes” votes occurred for local tax measures, while the “no” votes carried the day against continuing state taxes. With the legislature suffering a 13% approval rating, not too many people trust legislators with their tax money. On the local level, voters have a better sense of how their money is spent.
However, there are other factors at play here. The nature of many of the tax proposals may explain the high acceptance rate.
Among the taxes that were placed in the “pass” column in the League of Cities’ tabulation were extensions of existing taxes. Additional money was not being taken from the taxpayers in these instances. Since the taxpayers were used to paying the tax that was being extended there was less incentive to oppose the measure. Still, it must be noted that taxpayers did not take the opportunity to cut their taxes by voting “no.”
Nine of the taxes that passed were hotel taxes. That’s a tax the local residents are putting on a stranger staying in town. Easy to press the “yes” button.
Of the eleven utility taxes that passed, five maintained an existing tax rate, while four lowered the tax rate while at the same time bringing more telecommunication technologies under the tax. Such measures are portrayed as tax cuts to the voters.
Of the five city parcel taxes on the ballot, the three that passed were extending a tax already in place. The two that failed were new taxes. Of the six school parcel taxes that passed, three extended old taxes. One of the four school parcel taxes that failed also was an extension.
When it comes to campaigning for local tax measures there is rarely a funded opposition. Local government officials have a larger megaphone when arguing that money is needed to maintain services. Local governments often send out “informational” literature, which has frequently been criticized as making the case for the tax under the guise of information. Local pro-tax measure campaigns can find resources usually from those that do business with the local governments. Opposition campaigns’ small donor supporters cannot buy many direct mail pieces or radio time.
In contrast, state tax measures more often run into organized and well-funded opposition.
Examining the entrails of this year’s elections results does not present a clear picture as we head toward some potentially titanic battles over taxes in the coming year.
All the polling; all the focus group discussions that are conducted to get a read on the public entering the coming election year report the same thing: Voters are not interested in increasing taxes.
Still, in tough economic times, voters did say, “yes” to local taxes.
Which leads to an interesting question: Will the local tax election results convince groups considering state tax initiatives to move ahead?
Joel Fox is the editor of Fox & Hounds Daily.