Voters in numerous states will consider a range of tax policy questions on election day, including constitutional amendments to alter long-standing tax laws and numerous measures to raise taxes on businesses and individuals.
In California, voters will consider whether to approve a split-roll property tax to increase taxes on commercial properties — a proposal that would significantly alter the state’s long-standing property tax regime established under 1978’s Proposition 13. Alaskans will consider whether to again revise their cash-strapped state’s oil tax regime and increase taxes on oil produced at major fields.
Illinois voters are being asked to discard their state’s prohibition on progressive income taxation, while Arizonans will consider whether to raise their state’s income tax on the wealthy to fund education. In Colorado, voters will consider requiring public votes on some government entities that generate significant revenue from fees.
Arizona, Montana, New Jersey, and South Dakota all have ballot measures to legalize and tax marijuana, and measures in Colorado and Oregon seek to increase taxes on tobacco products.
Alaska
Alaskans will vote November 3 on Measure 1, an ambitious measure backed by proponents of increasing taxes on major oil companies in the state, including Robin Brena, chair of former Gov. Bill Walker’s Transition Subcommittee on Oil and Gas. It would apply to three major legacy North Slope oil fields — the Prudhoe Bay Unit, the Colville River Unit, and the Kuparuk River Unit — increasing the net production tax and alternative gross minimum tax on oil produced in the fields. It would also make changes to bar companies from using offsets to reduce their minimum tax, would establish ring-fencing provisions to prevent losses at one location from being used to reduce taxes on production at another in the North Slope fields in question, and would require companies to make public their tax filings related to production at those fields.
Supporters argue that Alaska’s multiyear deficits and tax cuts require the state to increase taxes on its main industry. They argue that Measure 1 could generate as much as $1 billion annually for the state, which has seen revenues plummet because of low oil prices. Oil companies and business interests have run a fierce opposition campaign, arguing that the measure will deter investment in the state, and Gov. Mike Dunleavy (R) recently opposed the measure.
Arizona
Arizona taxpayers will finally get to vote on an income tax measure to increase funding for educators and schools after a similar proposal was struck from the 2018 ballot by the state supreme court for including misleading language. This year’s measure, Proposition 208, would levy an income tax surcharge of 3.5 percent on income over $250,000 for individuals and over $500,000 for joint filers. The goal is to raise approximately $940 million annually to hire more teachers and other education workers and increase their pay, among other spending goals.
Unlike in 2018, the Arizona Supreme Court upheld Proposition 208’s description and kept it on the ballot. The Arizona Education Association, progressive groups, and unions say the measure will help improve an underfunded education system by taxing a portion of wealthy Arizonans’ income. Opponents, including the Arizona Chamber of Commerce and numerous other business associations, say the measure would hit small- and mid-sized business owners and would make the state’s top income tax rate one of the highest in the country.
Another ballot measure, Proposition 207, seeks legalization of recreational marijuana for adults 21 and older, to be taxed at a 16 percent rate on the retail sale price to generate revenue for enforcement, community colleges, public safety, and other priorities. It would also limit other taxes on marijuana.
Supporters argue that the measure will produce around $300 million a year for the state to fight addiction and fund other services. A report submitted to the Legislature projected around $166 million annually. Backers include progressive organizations such as ACLU Arizona, lawmakers, and former directors of Arizona’s Department of Health Services. Opponents, including the state’s chamber of commerce and several business, medical, and law enforcement groups, argue that the measure would result in greater pot use by minors and would harm employers.
Arkansas
In Arkansas, voters will determine if a temporary 0.5 percent sales tax to fund transportation spending, approved by voters in 2012 and set to expire in 2023, should be enacted permanently and added to the state constitution. Issue 1 was placed on the ballot by lawmakers, and supporters include Gov. Asa Hutchinson (R), Attorney General Leslie Rutledge (R), and the state’s chamber of commerce. Opponents include conservative groups such as Americans for Tax Reform, Tea Party groups, and conservationist organizations such as the central Arkansas Sierra Club, which argue that the tax shouldn’t be extended indefinitely and that the money will fund transportation goals that harm the environment.
California
California voters will decide on a major tax reform proposal, Proposition 15, which would alter the state’s landmark 1978 property tax reform measure, Proposition 13, to create a “split-roll” system that would tax commercial properties based on their fair market value, with some exemptions. Homes and commercial properties are now taxed based on their last purchase price (or their 1975 value if they haven’t been sold since Proposition 13 passed), with an annual increase of no more than 2 percent.
Progressive groups, unions, and the state’s Democratic Party are among the proponents of Proposition 15. Backers argue that commercial property owners don’t pay a fair amount of taxes under the system and that they abuse a loophole to split up sales to avoid reappraisal of properties. Proponents say it will produce as much as $12 billion annually for education and local governments.
The measure’s opposition is made up of numerous business associations, tax watchdogs, and other groups, including the Howard Jarvis Taxpayers Association. They argue that the measure will trickle down to small businesses and consumers, increasing rents and cost of living. Polls show a split among voters.
Voters will also consider Proposition 19, referred to the ballot by the State Legislature, which would expand a law allowing older and disabled homeowners to transfer their home's base-year property tax value to a replacement dwelling, with adjustments for higher-value replacement homes, anywhere in the state multiple times. The measure would also restrict and partially repeal property tax breaks for some properties transferred to children or grandchildren.
Colorado
In Colorado, voters will decide whether to approve Proposition 117, which would require any new state enterprise — defined as a government business that assesses fees and surcharges for services — to be approved by a statewide vote if the projected or actual revenue from its first five years of operation, combined with the revenue of any other enterprises created within the last five years that serve primarily the same purpose, is $100 million or more.
Proponents, including conservative groups, argue that fee-charging enterprises have been used by the state to do an end-run around Colorado’s Taxpayer Bill of Rights, which requires public approval of tax increases. The say Proposition 117 will restore accountability to taxpayers. Opponents, however, argue that TABOR has made it nearly impossible to raise taxes, and warn that the measure would make it difficult for the state to fund services.
Another ballot measure in Colorado, Amendment B, would repeal the Gallagher Amendment of 1982, which constitutionally requires residential property to make up no more than 45 percent of the state’s property tax base, requiring the residential property tax assessment rate to be adjusted to preserve the ratio. As a result, the property tax burden has been shifted to businesses over time. If Amendment B is approved, property tax assessment rates will be statutorily frozen at their current levels. Proponents argue that the legislation would stabilize property tax revenues and prevent property tax hikes on businesses without a need to increase residential property taxes. Opponents argue that eliminating future reductions to the residential rate represents a tax increase and that homeowners will be hurt by eliminating the amendment.
Voters will also decide on Proposition 116, which would reduce the state’s flat income tax rate from 4.63 percent to 4.55 percent for tax years beginning on or after January 1, 2020. It’s backed by conservative groups and the state’s Republican Party, which argue that it will help residents and the economy during the downturn. Progressive organizations oppose the measure, warning that it will force additional cuts to services.
A fourth measure, Proposition EE, placed on the ballot by lawmakers, would increase taxes on cigarettes and tobacco products, raising the tax on packs of cigarettes from $0.84 to $2.64 by July 2027. It would also create a new tax on nicotine products, including vaping products, which would start at 30 percent in 2021 and increase to 62 percent by July 2027. The existing tax on non-cigarette tobacco products would also increase from 40 percent to 62 percent by July 2027. The revenue generated from the new tax would go toward education, housing, tobacco prevention, healthcare, and preschools.
Florida
Florida’s Amendment 6, put on the ballot by lawmakers, would allow a homestead property tax discount to be transferred to a veteran’s surviving spouse. Supporters argue the measure will help protect veterans' partners, but the state's League of Women Voters warns it would reduce property tax revenues for schools and other services.
Georgia
Georgia’s Amendment 1 proposes to allow the state legislature to require that taxes and fees that are collected for specific public purposes be used for those purposes, in order to prevent diversion of revenues. Under the measure, such taxes and fees would sunset in 10 years and couldn’t equal more than 1 percent of state revenues, would require a two-thirds majority to pass, and could be repealed by a simple majority vote. Regular reports on how the revenue from the levy is used would be required. Under the measure, the governor could suspend dedication of these levies in a fiscal emergency.
Illinois
Voters in Illinois will consider S.J.R. Constitutional Amendment 1, referred to the ballot by the legislature, which would remove language in the state constitution that prohibits the state from levying a progressive personal income tax.
The amendment doesn’t establish rates itself, but legislation (S.B. 687) will set six rates in the event the amendment passes. Rates would start at 4.75 percent for income up to $10,000 and would increase up to a top marginal rate of 7.85 percent for income between $350,001 and $750,000 for individuals (or $500,000 to $1 million for joint filers). For income earners with over $750,000 ($1 million for joint filers), the rate would be 7.99 percent, levied on their entire net income.
The measure’s supporters include Gov. J.B. Pritzker (D), who has poured upward of $56.5 million into the “Vote Yes for Fairness” campaign. Proponents argue that the state’s income tax is regressive and that wealthier residents should pay more. Opponents, including hedge fund billionaire Ken Griffin, who has sunk $20 million into opposing the measure, argue that the time is wrong for a tax increase and warn that the amendment will allow lawmakers to ratchet up income taxes in the future.
Polling shows that the measure has strong support, but to pass it must garner a three-fifths majority. If it fails, Pritzker has said the state may need to make significant cuts and potentially approve an across-the-board income tax hike.
Louisiana
In Louisiana, Amendment 5 would allow local governments to enter into “cooperative endeavor ad valorem tax exemption agreements” to receive payments in lieu of taxes from new or expanding manufacturing and energy businesses. The legislation was put on the ballot by lawmakers; proponents, including the state’s school boards association and law enforcement and business groups, argue that the agreements would allow local governments to promote business investment and receive significant near-term payments from businesses, unlike under the existing industrial ad valorem tax exemption program.
However, opponents, including a progressive coalition called Together Louisiana, argue that the measure would result in excessive tax giveaways for industry at a cost to local services, and could create pressure to increase residential property taxes. The change would mainly benefit large corporations whose tax exemptions are due to expire, allowing them to negotiate special deals with local governments that allow them to make payments in lieu of taxes in exchange for lower property taxes, according to an analysis from the Louisiana Budget Project.
Another measure in Louisiana, Amendment 6, would increase from $50,000 to $100,000 the amount of income that seniors, military, and disabled residents could make and still qualify for a special property assessment level.
Maryland
In Maryland, a referendum placed on the ballot by the state legislature asks voters whether sports and event betting should be allowed to raise revenue for education. If Question 2 is approved, legislation will be required to operate and regulate sports betting. Supporters include Gov. Larry Hogan (R), lawmakers, and education proponents; there appears to be no organized opposition campaign.
Montana
In Montana, two measures to legalize marijuana are on the ballot. Initiative 190 would legalize recreational marijuana for adults 21 and older and tax sales at a rate of 20 percent. A complementary initiative, CI-118, would amend the state constitution to authorize lawmakers and voters to establish that 21 is the minimum age for recreational marijuana consumption. A recent University of Montana study indicated that Initiative 190 could generate as much as $43 million in 2022.
Proponents, including Lt. Governor Mike Cooney (D) — who's running for governor — and the Marijuana Policy Project, argue that enforcing the ban on recreational marijuana is a drain on law enforcement and that legalization will generate revenue to benefit the state. Opponents argue that legalization would increase marijuana abuse and related problems in the state.
Nebraska
In Nebraska, voters will weigh in on several related ballot measures: Initiative 429 seeks to amend the state constitution to allow casino gambling at licensed horse racetracks; Initiative 430 would create a state gaming commission to regulate that gambling; and Initiative 431 would impose a 20 percent tax on gross revenue from it. Proponents of legalizing casino gambling at racetracks, including gaming interests, want voters to approve all three, arguing that the measures will keep gambling money in-state and generate as much as $65 million annually in taxes.
But opponents, including Nebraska Gov. Pete Ricketts (R) and some conservative groups, argue that the social costs associated with gambling will end up outweighing the benefits of additional revenue.
Nebraskans will also decide whether to support Amendment 2, allowing lawmakers to extend the repayment period for tax increment financing from 15 years to 20 years “if more than one-half of the property in the project area is designated as extremely blighted.” The goal is to promote development in poorer areas.
New Jersey
In New Jersey, voters will decide whether to legalize recreational marijuana. Question 1 asks whether the state should legalize the possession and use of marijuana for people who are 21 or older. The referendum doesn’t propose any additional taxes beyond the state’s 6.625 percent sales tax but would allow local jurisdictions to adopt an ordinance imposing an additional cannabis municipal tax not to exceed 2 percent. Backers include criminal justice reform groups and legalization advocacy organizations; opponents include the state’s Republican County Chairmen's Association and New Jersey Responsible Approaches to Marijuana Policy.
Oregon
Oregon voters will decide on Measure 108, a tax proposal referred to the ballot by the legislature in 2019, which seeks to increase the state’s tax on cigarettes from $1.33 per pack to $3.33 per pack. It would also apply a 65 percent tax on the wholesale price of vape products and double the cap on cigar taxes to $1 per cigar. The revenue — projected to be as much as $350 million per biennium — would mostly help fund the state’s Medicaid program. Some funding would also go to programs to encourage tobacco users to quit.
The measure is backed by Gov. Kate Brown (D) as part of a broader plan to fund the state’s Medicaid program, as well as by the state Democratic Party and others. Opponents include Americans for Tax Reform and vaping industry groups, which argue that the taxes would be regressive and that taxing vaping products will counter efforts by smokers to use them to quit.
South Dakota
South Dakota voters will also consider legalizing recreational marijuana for adults 21 and older, taxing sales at a rate of 15 percent, with revenue going to enforcement, schools, and the state’s general fund. Proponents, including the Marijuana Policy Project, say Constitutional Amendment 1 will generate tens of millions of dollars annually and reduce law enforcement resources used to pursue marijuana law violations.
Opponents, including the South Dakota Chamber of Commerce and Industry and the South Dakota State Medical Association, argue that pot legalization will increase abuse of the drug and harm businesses’ ability to ensure a drug-free workplace.
Utah
Voters in Utah will consider Amendment G, which would allow income tax and intangible property tax revenue reserved for education to also be spent on programs to support children and people with disabilities. Notably, Utah doesn’t currently tax intangible property.
The purpose of the amendment, placed on the ballot by lawmakers, is to improve funding for programs benefiting children and persons with disabilities. Legislation approved in 2020 would go into effect if the amendment passes, with provisions designed to protect education funding.
Proponents include the Utah Education Association and the Utah School Boards Association, which argue that greater flexibility in spending income tax revenues will promote better educational outcomes. Opponents, including the Utah Citizens' Counsel, argue that the amendment introduces a threat to future education funding, noting that protections enacted by the Legislature could be altered.
Virginia
Virginia Question 2 asks voters to approve a state and local property tax exemption for one automobile or pickup truck for veterans with a 100 percent service-connected, permanent, and total disability.
Aaron Davis, Lauren Loricchio, and Carolina Vargas contributed to this article.