2015 ballot measure results usher in tax cuts and, sometimes, marijuana(Read article summary)
While most states are voting to make tax hikes more difficult, many are still uncertain about marijuana. This article details many of the results seen.
Last Friday I ran down four key tax-related ballot measures. On Election Day, voters in Washington, Texas, Ohio, and Colorado spoke: They like tax cuts but still have questions about legal marijuana.
Washington: Make future tax hikes (nearly) impossible or cut taxes now
That's slightly hyperbolic but the best way to think of the ballot initiative backed by Washington voters 54 percent to 46 percent. The Washington legislature now has until April 15, 2016 to pass a state constitutional amendment that would require a two-thirds supermajority in the legislature or direct voter approval for all future tax increases. That's a daunting legislative task in a state where Republicans and Democrats each control one house of the legislature.
If the legislature fails to pass the supermajority amendment by April, the state's sales tax rate drops from 6.5 percent to 5.5 percent, at the cost of roughly $1.5 billion in annual revenue. That's a tough fiscal pill to swallow for a state already facing contempt orders from the Supreme Court of Washington for failing to adequately fund schools.
Opponents have already taken the ballot measure to court. Expect more legal challenges.
In another anti-tax move, two-thirds of Washington voters disapproved of a recent gas tax hike. The law won't change because it was an advisory vote, but Washington became the third state in the last year (joining Massachusetts and Michigan) to reject a gas tax increase at the polls. Note to states: If you want to hike gas taxes don't ask voters.
Texas: Sure, cut property taxes
In news that will shock no one, nearly 90 percent of Texas voters supported a ballot measure that increases the state's homestead deduction from $15,000 to $25,000. This effectively cuts property taxes by $125 per household and reduces school funding by $1.24 billion every two years.
Ohio: No legal marijuana … for now
Surprisingly, Ohio voters rejected a ballot measure (Issue 3) to legalize marijuana by nearly a two-to-one margin. A majority of Ohioans supported legal pot in an October poll. However, voters may have agreed with the cause but not the method. Issue 3 would have legalized marijuana but also given exclusive selling rights to 10 facilities. In fact, another measure (Issue 2) was put on the ballot to nullify monopoly-creating ballot measures—specifically, Issue 3—and it passed.
Some Issue 2 supporters may have only wanted to prevent Ohio from legalizing marijuana. But many pro-pot voters also opposed the monopoly and Issue 3. Already, a new group called Legalize Ohio 2016 is working to get an initiative (sans monopoly) on the 2016 ballot. So legal marijuana in Ohio might only be a year away.
Colorado: We like our legal and taxed marijuana just fine, thank you
In contrast, more than two-thirds of Colorado voters approved their tax system for legal pot, again. Colorado supported a marijuana ballot measure in 2013 that legalized and taxed marijuana. However, the state's Taxpayer Bill of Rights refunds new tax revenue if the state incorrectly estimates how much new revenue and total state revenue would occur after a tax is created (the state missed on total state revenue). On Tuesday, voters turned down the rebate and let the state use the $66 million in revenue as initially intended—for the general fund and school construction.
This article first appeared at TaxVox.