Voter Initiatives Propose to Redirect Tax Money, Limit Lobbyists’ Power

Published December 1, 2008

A wide variety of initiatives bearing on budgets and taxes but not explicitly raising or lowering tax rates also have hit the ballots in states across the nation.

Given the unpopularity of tax hikes, some states are looking to alternative revenue sources. Borrowing and bond issuance questions (worth tens of billions of dollars in total) have made the ballot in Alaska, Arkansas, California, Colorado, Ohio, and Maine. New Jersey‘s Public Question 1 would go in the opposite direction, giving residents the chance to approve future bond requests, which could help limit future indebtedness.

Moving Money Around

States are also considering a variety of measures regarding prioritization or protection of funds.

Utah‘s Constitutional Amendment B, the State Trust Fund Amendment, would allow a tobacco settlement trust fund to receive other forms of money, including the booming severance tax revenues gained from natural resource extraction. Three-fourths of the legislature plus the governor would have to agree to spend money from the trust fund, and it could provide a “rainy day” account preventing future tax hikes during tight budgetary times.

In Washington, Initiative Measure No. 985 would redirect existing funds (including 15 percent of state sales and use taxes on vehicles, plus certain traffic ticket fines and tolls) to traffic congestion relief. Supporters say this will provide up to $668.6 million for traffic-reduction programs over the first five years, without raising tax rates.

In North Dakota, Constitutional Measure No. 1 would create a protected, permanent “oil tax trust fund” for oil and gas taxes received in excess of $100 million. An existing “statutory” trust fund often gets raided and emptied during the legislative session because spending requires only a 51 percent vote. The stronger trust fund would require a three-fourths vote of the legislature to spend up to 20 percent of the balance.

Alabama‘s Statewide Amendment Number One would expand a “rainy day” fund for education spending and relax associated borrowing rules. Taxpayer advocates are concerned the measure would encourage more state outlays at the expense of prudent budgeting practices.

Constraining Corruption

Numerous “good-government” reforms are up for consideration.

In South Dakota, Initiated Measure 10 would prohibit use of taxpayer funds for lobbying, bar legislators and their staffs from using their positions to secure state-contracted jobs, outlaw trading state contracts for campaign donations, and create an online database of state contracts exceeding $500.

Colorado‘s Amendment 54 would end the practice of “pay to play.” Holders of contracts worth $100,000 or more that were awarded without competitive bidding would be prohibited from contributing to political parties or candidates for elected office for the term of the contract plus two years thereafter.

Colorado also will consider Amendment 47 and Amendment 49, which would respectively add “right to work” protections (preventing the mandatory joining of a union as a condition of work) and “paycheck protection” standards (prohibiting union dues from being deducted from government workers’ paychecks).

Oregon‘s Measure 64 would penalize anyone who uses funds collected with public resources (including money, public employee hours, buildings, and equipment) for a political purpose (such as campaigning).

Connecticut, Hawaii, and Illinois will ask voters if they want to hold a state constitutional convention.

Kristina Rasmussen