New Report Shows Strong Support for Local Tax Measures

With California continuing to reel from the impact of the Great Recession, voters’ support for public services during tough economic times was put to the test last November when nearly 200 local tax and general obligation (GO) bond measures appeared on ballots across the state. The results? Voters passed 116 (59.5 percent) of the 195 proposals, according to a new report from the California Debt and Investment Advisory Commission (CDIAC).  In fact, a majority of the measures that voters approved (56.9 percent) required a supermajority vote of either 55 percent or two-thirds in order to take effect. The report shows that:

  • Voters approved nearly three-quarters (73.1 percent) of the 67 GO bond measures on local ballots, most of which will fund K-12 and community college construction projects. It’s not surprising that nearly all of the local bond measures proposed and approved in 2010 are related to education: bonds for educational purposes can be authorized with a 55 percent vote of the people, whereas other local bonds must meet a much tougher two-thirds vote threshold. Furthermore, it’s worth noting that local GO bonds, unlike state bonds, are repaid out of an increased property tax rate. Therefore, when voters approve a local GO bond, they are voting to raise their property taxes.
  • Voters passed nearly two-thirds (64.1 percent) of the 78 “general purpose” tax measures on local ballots, including sales, business license, and hotel/motel taxes. General purpose tax revenues may be used for any governmental purpose and require only a simple majority vote to take effect.
  • Voters supported more than one-third (34.0 percent) of the 50 “special purpose” tax measures in November 2010, primarily to fund education and emergency services. Forty-nine of those measures were local tax proposals, which require a two-thirds vote in order to take effect. One special purpose tax measure – Proposition 21, which would have imposed a vehicle license surcharge to support state parks – appeared on the statewide ballot but failed to receive the required majority vote. CDIAC notes that nearly 80 percent of the special purpose tax measures on the November 2010 ballot received at least a simple majority of the votes cast, although only those that met the two-thirds threshold required for local measures took effect.

Some Californians were more willing than others to approve tax and bond measures, according to the report. Voters in the San Francisco Bay Area and in the Los Angeles region – Los Angeles, Orange, and Ventura counties – approved more than two-thirds of the measures that appeared on their local ballots (68.5 percent and 68.0 percent, respectively). In contrast, San Diego/Inland Empire voters approved slightly less than half (47.4 percent) of the measures on their local ballots. Voters in the Central Valley were the least receptive toward tax and bond proposals, approving just 39.4 percent of the measures on their local ballots.

One of the key sticking points in the 2011-12 state budget debate is whether to ask California voters to extend, for a few more years, temporary taxes enacted in 2009 that expire this year. Despite some regional differences, results from the November 2010 ballot suggest that voters are more willing to support revenues to help close the state’s remaining $9.6 billion budget gap than the debate playing out in the state Capitol would suggest.

— Scott Graves

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