2022 Public Finance Ballot Questions
A look at some of the public finance related ballot questions to keep an eye on during this week’s elections.
In addition to Congressional and Gubernatorial races, voters in some states will be asked ballot questions. This year they include bond authorizations, changes to tax policy, and other constitutional amendments.
Most eyes will be on California where a question on sports gambling is slated to be the most expensive on record. Here are some ballot initiatives to keep an eye on this week.
California: Legalizes mobile sports betting and dedicates revenue to the California Solutions to Homelessness and Mental Health Support Account and the Tribal Economic Development Account
To create a multi-billion marketplace, about $400 million was been spent in the state focusing on the dedicated revenue to support homelessness – but Gov. Gavin Newsom, who has not taken a position says Prop. 27 “is not a homeless initiative.”
It goes back to think of the lottery initially back in the 80s. The lottery was sold to the voters on the assumption that quote 'the schools win too' because some of the money from the lottery would go to the schools.
According to state analysts, Prop. 27 would increase state revenues from sports betting payments and penalties, but the size of this increase is uncertain. The increase could be in the hundreds of millions of dollars annually, but likely would not be more than $500 million annually
California: Increases the tax on personal income above $2 million by 1.75% and dedicates revenue to zero-emission vehicle projects and wildfire prevention programs
According to state analysts, the measure could increase state tax revenue $3.5 to $5 billion annually; the new funding is used to support zero-emission vehicle programs ($2.8 to 4 billion annually) and wildfire response and prevention activities ($700 million to $1 billion annually).
The Wildlife Conservancy's study of the impacts from Prop. 30 estimate it could reduce the number of large wildfires by 150 annually.
Colorado: Reduce the state’s flat income tax rate from 4.55% to 4.40% for tax years commencing on or after January 1, 2022
The average taxpayer would save about $119 if the proposition passes. However, the savings would be much greater for the state’s wealthiest people. For example, someone making a million dollars would save $1,500 in taxes.
According to state analysts, about half of the savings from Proposition 121 will go to people who make more than a million dollars a year (less than 1% of the taxpaying population).
Florida: Authorizes the state legislature to pass laws prohibiting flood resistance improvements made to a home from being taken into consideration when determining a property's assessed value for property tax purposes
If passed, Constitutional Amendment 1 would exempt home improvements made to prevent flood damage from property tax assessment, joining existing exemptions for wind damage and solar or renewable energy sources -- to pass, at least 60% of voters would have to approve it.
It is difficult to measure the fiscal impact, critics argue that this “benefits wealthy beachfront homeowners.”
Idaho: Advising the legislature to enact a flat income and corporate tax rate structure, send tax rebates to qualifying taxpayers, and dedicate $410 million annually to education
This is a nonbinding question and appears as an Advisory Question. The plan has already been enacted into law as House Bill 1.
House Bill 1 imposes a flat 5.8% rate, (reducing taxes by more than $150 million), adding $500 million in a one-time tax rebate, and pledging $410 million for education ($330 million on public schools and $80 million on “in-demand career centers”).
Louisiana: Amends the Louisiana Constitution to increase the maximum amount of certain state funds authorized to be invested in equities to 65%
Louisiana has approximately $3.2 billion throughout the 7 trust funds included in Amendment 1. Currently, they can only invest up to 35% in equities.
New Mexico: Authorizes the New Mexico State Legislature to provide funds for household services infrastructure, including internet, electric, natural gas, water, wastewater or other services provided by law
Under the state's current “anti-donation clause” it cannot give money to private companies. Critics argue the measure could lead to politicians misusing tax dollars without proper oversight.
New York: $4.20 billion in general obligation bonds for projects related to the environment, natural resources, water infrastructure, and climate change mitigation
The borrowing plan was first proposed for the 2020 ballot, then delayed because of the pandemic. The amount has since increased by more than $1 billion.
South Carolina: (1) Increase the General Reserve Fund from 5% to 7% of state general fund revenue incrementally by one-half percent each year and (2) increase the Capital Reserve Fund from 2% to 3% of state general fund revenue
Any opinions expressed herein are those of the author and the author alone.