Do Local Tax Election Results Foreshadow 2012 State Tax Fight?

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

With the expectation that taxes dealing with California’s budget issues will dominate the state’s general election one year from now, the tea-leaves of yesterday’s local elections around the state might indicate how voters are feeling about taxes.

Overall, there were 53 tax, bond and fee measures on local ballots. With the understanding that the results are preliminary for the final counts are not in, 40 of the 53 tax measures passed for a solid passing percentage of 75%. The results included 18 of 22 city majority vote tax measures passing, and 11 of 14 parcel tax measures in special districts and school districts getting the necessary two-thirds vote to pass.

California City Finance has a complete rundown of the election results. According to the site, the overall passage rate for non-school tax measures this year was ahead of the passage rate for such measures over the past decade. While 82% of the majority vote measures passed this year, 65% passed since 2001. For parcel taxes, the 69% pass rate this year exceeds the 46% pass rate over the last decade. School tax measures results roughly matched the results of the past decade.

Significantly, however, sales tax increases were defeated in San Francisco and Vallejo, a city trying to work its way back from bankruptcy.

So are voters ready to tax themselves to deal with the state budget problems? When given a chance two years ago the voters turned down tax extensions and polls since that time have indicated the voters have little interest in state tax increases, with the possible exception of being willing to tax someone else, i.e., millionaires.

There are differences when voters look at local taxes and state taxes. Voters tend to trust the governments closer to them. They feel they can see how the money is spent and can hold the taxing authorities accountable. Polls indicate that Californians think there is much waste in state spending and the low level of respect for the legislature recorded in polls over the years has been consistent.

Simply because there has been an uptick in passing local taxes in this one election does not necessarily mean voters are prepared to open their wallets when state tax initiatives come along.

However, tax increase supporters will see hope for their position in yesterday’s results. Even in the shadow of a vicious recession, voters were willing to raise their taxes to benefit government.

But, the apparent defeat of a sales tax designed to bolster public safety, senior and children programs in the liberal city of San Francisco tells a different story for prognosticators.

Interestingly, the San Francisco tax measure was written in such a way that it anticipated a state sales tax increase. The measure called for a ½-cent local sales tax increase for 10 years unless the state raised its sales tax by 1-cent by November 30 of this year or .75-cents by January 1, 2016. Were the San Francisco voters saying they don’t want a state sales tax increase, either?

As any political scientist will tell you, a year in politics is a lifetime, and attitudes and situations will change before state voters decide on ballot measures in November 2012. But, I suspect there is nothing that the pro-tax proponents saw in yesterday’s elections to stop them from moving forward with their tax increase proposals.

 

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