THE PODIUM | Glut of tax measures on this fall’s ballot may be a tough sell
Author: Greg Fulton - August 22, 2018 - Updated: August 21, 2018
According to the Chinese calendar, this is the Year of the Dog. For many Coloradans, when they receive their mail-in ballot for this November’s election, they may feel that this is the “Year of the Tax.”
Based on initial observations it appears that there may be more tax proposals on the 2018 ballot throughout the state than at any time in recent history. You might ask why so many tax proposals might be on the ballot in 2018? The answer is easy. The economy is strong, the stock market is at record highs, unemployment is low, business revenues and profits are up, and many workers have seen an increase in pay.
The collective wisdom of many in government and elected officials is that taxpayers are more willing to support a tax increase when the economy is on an upswing and voters’ pocketbooks are healthier. While these conditions may be positive, a problem arises when a number of groups have the same idea. In that case you may have several different tax measures on the same ballot that may compete for voter support which may be to the detriment of some or all of them.
On a statewide basis, which would affect all taxpayers, it appears that we will have two proposed tax measures. One relates to an increase in the income tax, which would go toward public education throughout the state. That proposal would raise the income tax rate from a flat 4.63 percent to between 5 percent and 8.25 percent for people earning more than $150,000. A selling point being pitched by the proponents is that 90 percent of current taxpayers would not pay any more income tax than they do today.
The second statewide tax measure on the ballot would be a .62-percent sales-tax increase dedicated to addressing the state’s burgeoning transportation needs. If that measure passed, it would raise the state sales tax from 2.9 percent to 3.52 percent.
While those two measures will be on everyone’s ballot, a majority of voters in our state may see a wide range of additional tax proposals being brought forward by cities, counties, special districts and even private groups that petition onto the ballot. In the case of Denver alone, it appears that there may be four dedicated local sales tax increases along with the statewide sales tax increase. If all five of those measures passed, the combined sales tax in Denver would rise by 1.28 percent, resulting in an overall 8.93 percent sales tax in the city.
Add to this the fact that other initiatives related to gerrymandering, oil and gas, and others may also be on the ballot, and it makes for a very confusing ballot. Voters will be challenged to understand and, in turn, choose which of these proposals to support. Having this type of proliferation of measures on the ballot may prove so confusing that some voters may merely vote “No” on all of them rather than take the time to determine which they like.
While any proposed tax measure faces a challenge in this environment, the two statewide proposals face possibly a greater hurdle. In the case of taxes or other proposals, voters tend to be more locally focused and more willing to support local initiatives than statewide proposals. Citizens better understand the need for local taxes and can better visualize the benefits to their family and friends. This fits with the old adage that “all politics are local.”
The final obstacle and one that may be the greatest is that the strong economy that provides a perceived better environment for raising taxes is also the same one that is generating greater tax revenue at the state level as well as in many communities. Convincing voters to support any tax increase, despite its merit, when state and local tax revenue has significantly risen and appears to be on track to grow even further in the next year, may be challenging.