Little Policy Innovation From Ballot Measures

Loren Kaye

President of the California Foundation for Commerce and Education


The laboratories of democracy were relatively quiet last week.

Voters in 35 states considered 154 measures on their ballots, but few broke new ground. Even California, often considered the bellwether for new voter-driven policies and flush with 17 measures on the ballot, behaved conventionally.

The most far-reaching and unpredictable measures on California’s ballot failed. Proposition 61 would have capped prescription drug prices for some, but not all health care programs, and Proposition 53 would have required statewide voter approval for large projects financed by revenue bonds.

Californians by a wide margin approved Proposition 64, legalizing recreational marijuana. But so did two other states, this after four other states and DC approved legal recreational weed earlier this decade.

Even the tax increases were retreads: Proposition 55 extended an existing income tax while Proposition 56 upped a tobacco tax that had been raised by voters in 1988 and 1998.

Indeed, on ballot measures California voters showed a strong conservative streak, retaining the death penalty, retaining the ban on single-use plastic bags, retaining the income tax surcharges, and protecting fees for hospitals. Even marijuana legalization could be viewed as a recognition by voters of the futility of prohibition in a milieu of medical marijuana.

Voters in other states were likewise conservative when it came to the more ambitious proposals.

Five measures in four states deserved attention as potential forerunners to policy developments in California.

Initiative 732 in Washington would have enacted a revenue-neutral carbon tax, putting a price on greenhouse gas emissions and offsetting the new tax by cutting the state sales tax. The measure was easily defeated, opposed not only by the energy industry, but by environmentalists, labor unions and Democrats opposed to a tax increase that produced no new money for distributive programs.

Amendment 69 in Colorado would have removed the state from the Affordable Care Act and replaced it with universal health care plan funded by a 10 percent payroll tax (split 70% employers – 30% employees). The plan was defeated in a landslide.

Coloradans did pass Amendment 71, making it more difficult to amend the state constitution. Ostensibly to reduce the impacts of special interests, the changes would require initiative petitions get signatures from voters in every state Senate district, and would require a 55 percent supermajority to pass a constitutional amendment.

Oregonians rejected by a wide margin Measure 97, which would have raised the corporate gross receipts tax rate to 2.5 percent of sales by the corporation in Oregon, raising about $6 billion per biennium, a huge increase by Oregon standards. Oregon currently has no retail sales tax, and while this measure would not have created one, it would have effectively been a consumption tax.

Voters approved Amendment 4 in Missouri, which constitutionally prohibits state and local governments from adopting a sales tax on any services not already taxed. Services taxes are a favorite subject of discussion by tax reformers and tax raisers, given the constitutional cap on property taxes and the very high personal income, sales and corporate taxes in California today.

Don’t get me wrong, many of the California measures have important consequences, especially from the billions of new tax dollars that will roll into the treasury. But this is mostly business-as-usual for California. Great reforms or existential threats must await the 2018 ballot.

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