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While the power struggle over Congress has grabbed headlines heading into this fall’s midterm elections, voters in several states will also see state tax issues on their ballots. Let’s take a look at some of the issues that voters will decide on Election Day.

California: Gas Tax a Wedge Issue

The dispute over a gas tax hike that California enacted last year could have implications for the balance of power in the United States House of Representatives. Per the Wall Street Journal, California is a battleground state for control over the U.S. House this fall, with seven Republican districts considered competitive in the upcoming midterm election. Democrats need a net gain of 23 seats in the election to take control of the U.S. House.

GOP leaders including House Speaker Paul Ryan and Majority Leader Kevin McCarthy backed a referendum petition drive to put “Proposition 6” on the November ballot in California.  The ballot issue is expected to motivate Republican voters to vote against the gas tax hike due to increasingly expensive commutes. Californians already face the second highest gas prices in the nation due to state clean fuel mandates and the existing gas tax. Shortfalls in state gas tax revenues could also be due to increasingly fuel-efficient cars on the roads. Statewide, only 39 percent of California voters support the tax, but the real ramifications of the ballot issue may be Republican voters going out to the polls in competitive U.S. House districts.

Florida: Trio of Tax Proposals

Florida voters will address three tax issues on their ballots this fall. First, Amendment 1 would expand the existing “homestead exemption” from local property taxes for homeowners by excluding an additional $25,000 of home values from the property tax base. Proponents argue that the tax break would spur economic activity, including home-buying. Opponents argue that the cut would stifle local government funds necessary for essential government services and merely shift tax burdens elsewhere.

Second, Amendment 2 would make permanent a 10 percent cap on annual property tax assessment increases that Florida voters approved on a temporary basis back in 2008. We discussed on the issue in greater detail through another post and reported that the issue on the renewal of local property tax limits is set to appear this fall.

Third, and perhaps most controversial of all, Amendment 5 would require a two-thirds supermajority vote by the Florida Legislature to approve future tax and fee increases. Proponents argue that tax increases should be enacted only when there is a large consensus on the need for more tax revenue and to promote fairness by obtaining the consent of those paying tax burdens. Opponents argue that constraining lawmakers’ ability to raise revenue could have dire consequences in the event state coffers are depleted due to a downturn in the economy.

North Carolina: Income Tax Cap

North Carolina voters will decide whether to limit future lawmakers from raising the state’s income tax above a 7 percent ceiling. Presently, the 2018 income tax rate in North Carolina is 5.499 percent, down from 5.75 percent in 2017. Current law further provides that the North Carolina income tax rate will drop to 5.25 percent in 2019, while the corporate income tax rate is scheduled to drop from 3 percent to 2.5 percent in 2019. The proposal therefore does not affect current rates, but constrains how much the state income tax could rise in the future without further amending the North Carolina Constitution.

Washington & Oregon: Local Tax Limits

Ballot issues in Washington and Oregon would prohibit local governments from levying taxes on grocery items. Voters in each state will also see more contentious political issues on the ballot alongside the grocery tax bans. Initiative 1631 in Washington proposes a carbon tax, while Measure 104 in Oregon requires a three-fifths legislative supermajority vote to increase taxes. As in California, these measures could have implications for voter turnout and the power balance in Congress separate and apart from their substantive content.

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