Tax and revenue measures on 12 state ballots

USA Today
Saturday, November 3, 2012
Jonathan Ellis

Voters in a dozen states will weigh in on ballot measures Tuesday that could bring significant changes to tax and revenue policy in those states.

Overall, there are 32 tax and revenue ballot measures across the country, according to the National Conference of State Legislatures. Of those, 18 represent significant tax measures. Some propose tax increases while others limit taxes or address property assessments.

In South Dakota, for example, voters are being asked to increase the state sales tax from 4 cents to 5 cents. The increase would generate about $180 million a year, which would be split evenly between K-12 education and the state's Medicaid providers, two areas that saw budget cuts in 2011.

Three large hospital systems in the state and the National Education Association have teamed up to contribute more than $1 million to the campaign.

Dave Hewett, the president of the South Dakota Association of Healthcare Organizations, argues the tax increase is directed to two critical areas that were cut when lawmakers balanced the state budget.

"The state doesn't have money to pay for basic services," he said. The measure is opposed by farm groups and the South Dakota Retailers Association.

Measures in Arizona and California also link sales tax increases to education. Arizona voters will decide through Proposition 204 on whether to make permanent a sales tax increase that went into effect in May 2010 and is set to expire in May of next year.

The tax would raise about $1 billion annually, with most being earmarked to education programs and $100 million to the state's transportation department. The measure has the backing of education groups and the road construction industry.

When the temporary increase took the state sales tax from 5.6% to 6.6% in 2010, many people in Arizona suspected there would be an attempt to make it permanent, said Kevin McCarthy, the president of the Arizona Tax Research Association.

McCarthy said his group supported the temporary tax increase to help the state weather tough economic conditions, but opposes this year's proposal to make it permanent.

The group, however, supports a second measure on the Arizona ballot, Proposition 117, which would simplify the state's property tax system and cap the maximum value used to calculate property taxes to 5%..

"Our property tax system can only be described as a complete mess," McCarthy said. "This will, we think, simplify it significantly."

In Oregon, the group Defend Oregon is fighting for one measure and opposing another. The group supports Measure 85, which would allocate excess corporate income and excise taxes that exceed revenue forecasts to K-12 education.

Scott Moore, a spokesman for the campaign, said the state budgets on a two-year cycle. In the 1970s, the state introduced a "kicker" to corporate and personal taxes, requiring that tax revenues exceeding forecasts be returned.

"What we're stuck with is this bad policy that hasn't been replicated anywhere else because it's pretty dumb," he said.

But Defend Oregon opposes Measure 84, which, if approved phases out the state inheritance tax. The two issues are linked, Moore said, because Measure 85 tries to direct money to basic government services while Measure 84 deprives those services of money.

"It's a pretty easy conversation to have with the voters," Moore said.

Ellis also reports for the Argus Leader in Sioux Falls, S.D.