Podcast: State Ballot Initiatives Will Affect Public Services
November 2, 2010
In this podcast we will discuss how in some states people will vote today on ballot initiatives that will significantly affect public services. I'm Shannon Spillane and I'm joined by the Deputy Director of the Center's State Fiscal Project, Jon Shure.
1. Jon, lots of people have been following the congressional, gubernatorial and state legislative races leading up to today's elections. But, some may not realize that in several states, there are questions on the ballot that pertain to state budget matters. Why is this a hot issue?
It's about the economy. The recession hit states very hard, causing revenues to plummet like we've never seen before. States can't run deficits, so they have fewer options in a crisis like this. With an increased need for services and shrunken resources they mainly look at some combination of tax increases and spending cuts.
So you can imagine that state finances are coming under a lot of scrutiny, and the ballot questions reflect this ongoing debate.
2. The ins and outs of budget policy can be pretty dry. Why should people care about these ballot questions?
The ballot questions in several states will greatly affect whether states can maintain important public services, like health care and education.
3. Can you give us an example? Are there any ballot measures that will make it even more difficult for states to deal with this crisis without excessive cuts to those key services?
Yes, I'll start with Colorado. It has a few ballot proposals that would restrict state and local governments' flexibility to meet major needs and threaten the quality of life. For example:
- Amendment 60 would eliminate all property tax increases that voters have approved since 1992 and cut property taxes in half over the next decade, and
- Amendment 61 would prohibit all future state borrowing and require voter approval of local borrowing.
And in Massachusetts, question 3 on the ballot would cut the state's sales tax rate by more than half - to 3% from 6 and a quarter.
4. Are there any ballot measures that will make it easier for states to meet public needs?
Yes. Proposition 24 in California would give the state additional revenue by eliminating three special tax breaks for corporations.
Another California proposition would begin to address the state's budget process - which is in constant gridlock. It would allow the legislature to approve a budget by a simple majority vote. It now takes a two thirds vote. That's often enabled small numbers of legislators to hold the budget captive.
Unfortunately, California's Proposition 26 would go in the opposite direction. It would extend the two-thirds requirement to cover proposed increases in fees and other charges.
In Washington state, one initiative would provide revenues for health care and education by establishing a state income tax on married households making over $400,000 and individual filers over $200,000.
5. It sounds like a lot is at stake. What's the bottom line?
The more states try to rely only on spending cuts in this crisis, the more they slow the economy and fail to make investments in areas like education and infrastructure needed for future economic growth. That's why a balanced approach that includes revenue is the best choice.
Thanks for joining me, Jon.