Voters made some big decisions in the mid-term elections. But those decisions weren’t limited to Congress, governors or state and local lawmakers. The people also weighed in directly through ballot questions.
So, what were some key outcomes in these instances of direct democracy?
The big news from a small business perspective was that voters in the state of Washington rejected an income tax.
Ballot initiative 1098 called for imposing an income tax with a 5 percent rate on incomes over $200,000 and 9 percent on incomes over $500,000. Voting for this measure would have been economic suicide for the state. Fortunately, voters said no loud and clear with more than 65 percent of the vote. BusinessWeek reported that this is the fifth time Washington voters have rejected a proposed income tax since 1934.
For good measure, 63 percent voted to repeal new state taxes on candy, soft drinks, bottled water and certain processed foods, while 66 percent of voters backed a measure requiring a two-thirds legislative vote, or voter approval, to raise taxes.
Unfortunately, the news was not good in Colorado, with voters overwhelmingly rejecting Proposition 101, which would have phased down the state’s income tax rate from 4.63 percent to 3.5 percent while also reducing or eliminating various vehicle fees and eliminating assorted telecommunications taxes.
The story was mixed, but generally negative, in California. Proposition 23, which gave voters a chance to put off the implementation of a costly emissions cap-and-trade regulatory scheme until unemployment drops to 5.5 percent or less for four consecutive quarters, was defeated, assuring that energy policy will continue to work against the economy and jobs in California.
Proposition 25, which reduces the legislative vote threshold for passing a budget from two-thirds to a simple majority, passed, which will make it far easier to pass budgets that jack up spending.
The lone positive was approval of Proposition 26, which will require that many state and local fees meet the same two-thirds vote necessary for tax increases. This closes the “fee loophole” in which lawmakers rename a tax as a “fee” to bypass the two-thirds vote requirement.
Unfortunately, a ballot question in Massachusetts that would have reduced the state’s general sales tax rate from 6.25 percent to 3 percent went down to defeat. However, another measure that exempts alcohol from the sales tax was approved.
There was very good news in protecting the private ballot in labor union representation votes. Voters in four states — Arizona, South Carolina, South Dakota and Utah — overwhelmingly voted to stop “card check” legislation in their respective states.
Finally, voters in Arizona and Oklahoma overwhelmingly voted to block ObamaCare mandates on health insurance. These were direct rejections of costly federal health care reform legislation. However, Amendment 63 in Colorado, which would have prohibited the state from forcing anyone to participate in health coverage plans or from stopping anyone from making or receiving direct payments for health care services, was narrowly defeated.
In terms of ballot measures, the election results were far more mixed compared to the wave that hit U.S. House and gubernatorial races.
But significant, pro-free-enterprise victories occurred nonetheless.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. Reach him through the website at www.sbecouncil.org.