Voters Weigh Tax-Raising Hurdle, Rideshares, Mobile Gambling (1)

November 02, 2019 07:17 AM
By Paul Stinson, Tripp Baltz, Joyce E. Cutler and Brenna Goth

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Rideshare tax to be considered in San Francisco
Sanctuary city measure on the ballot in Tucson

(Updates with scheduled San Mateo board vote on vaping in the penultimate paragraph.)

A state that already makes it tough to tax personal income is asking voters to decide whether to make it even more difficult.

A proposed constitutional amendment in Texas is among the tax questions on Nov. 5 ballots around the country. Some voters also are considering motor vehicle fees, the revenue that could come from legal gambling, and adding to the cost of an Uber ride.

The Texas ballot question, on the ballot as Proposition 4, asks voters if they want to amend the state Constitution to require a two-thirds supermajority vote of legislators—rather than the current simple majority—before any future personal income tax proposal is put to the electorate at large.

Critics dismissed the ballot issue as political theater, while the Texas Association of Business praised it as a way to minimize the possibility that a personal income tax will ever be enacted.

“The lack of a personal income tax has been key to Texas’ historical economic expansion,” James Hines, senior vice president of the business group, said in an email. “Businesses and families have relocated to Texas because individuals can keep anywhere from 5% to 10% more of their earnings,” Hines said in an emailed statement.

Dick Lavine, senior fiscal analyst at the Center for Public Policy Priorities, said the impact would hit “sometime in the future, when Texans of that time want to consider changing how they support schools and other public services.”

“Prop 4 would be an additional hurdle for them to overcome,” said Lavine. “Prop 4 is a political stunt that will have no immediate effect on Texas’ tax system, but gives legislators who support it something to put in their campaign literature.”

Some other ballot issues of note around the U.S.:

Gambling On The Go

Colorado ballots ask whether to legalize sports betting and immediately subject it to taxation.

The measure (Proposition DD) would legalize and regulate sports betting through online or mobile sports betting platforms operated by casinos in the state.

It would impose a 10% tax on casinos’ net sports betting proceeds.

Also on Colorado ballot is a measure (Proposition CC) that would let the state spend the money it would ordinarily be required to return to taxpayers under the state’s unique tax-and-spending limitation known as the Taxpayer Bill of Rights (TABOR).

If the ballot measure is approved, the state would be able to keep and spend about $264.3 million, according to a September economic forecast by Legislative Council.

Lyft-Uber Tax

Uber and Lyft passengers in San Francisco would get something extra on their rides starting New Year’s Day—a 1.5% or 3.25% tax under an initiative the rideshare companies support.

The proposed Traffic Congestion Mitigation Tax is a compromise reached with Uber Technologies Inc. and Lyft Inc. A handshake agreement last year sidestepped a more stringent proposal.

Solo riders would pay 3.25% and those in shared rides 1.5%.

The tax, opposed by the San Francisco Republican and San Francisco Taxi Workers Alliance, also would apply to any self-driving autonomous vehicle services introduced in the future. The projected $32 million in annual proceeds would fund transit improvements and bicycle and pedestrian safety.

If voters approve the measure by the necessary two-thirds margin, it would go into effect Jan. 1, 2020, and sunset in 2045.

Car Registration Revenue

Most Washington state motorists would only have to pay annual vehicle registration fees of $30 under an Initiative brought by anti-tax activist Tim Eyman.

Initiative 976 would cost state and local governments $4.24 billion in revenue over the next six years, taking a big bite out of funding for highway and road repair, bridge maintenance, sidewalks and local transit systems as well as Washington State Patrol operations.

The ballot measure has found some support among Republicans, but has been met with widespread opposition from a broad coalition including big business, organized labor, mass transit activists and newspaper editorial boards.

If passed, the measure would phase in beginning Dec. 5.

Affirmative Action

If Washington state voters approve Referendum Measure 88, it would reinstitute the use of affirmative action to increase diversity in public education, contracting and employment without the use of quotas.

Affirmative action had been in use until 1998 when voters passed a ballot measure prohibiting governments within the state from making decisions based on race, ethnicity, sex, national origin or color.

Cancer Funding

Texas voters will be asked if they want to provide an additional $3 billion to extend state research funding at the Cancer Prevention and Research Institute of Texas (CPRIT), which is on track to run out of grant money in 2021.

Voter approval of Proposition 6 would amend the Texas Constitution to authorize $3 billion in general obligation bonds.

The institute was established in 2007 as a central repository for cancer research in the state.

Immigrant `Sanctuary’

Tucson voters are considering whether to become Arizona’s first “sanctuary city.”

The question on the ballot there is whether to restrict interactions between local police and federal immigration enforcement.

The initiative, known as Proposition 205, would change city code to direct police not to participate in any enforcement with a purpose of determining immigration status.

Public Campaign Financing

Albuquerque voters will decide whether to boost public financing for city elections by giving residents coupons to spend on their chosen candidates.

The measure would start a “Democracy Dollars” program to provide voters $25 vouchers that can be redeemed by candidates who qualify for public financing.

Juul About-Face

Juul Labs Inc.’ support for a ballot initiative in San Francisco to prevent youth use of vaping went up in smoke with a new CEO.

However, by that time the company had already spent $18.6 million over the first-in-the-nation ban on e-cigarettes.

Proposition C is still on the ballot, and San Francisco and health officials are urging voters reject the measure.

Juul, which is part-owned by Marlboro maker Altria Group Inc., also dropped support for a similar initiative in suburban Livermore, Calif., that would’ve been on the March 2020 ballot.

Meanwhile, the San Mateo County, Calif., Board of Supervisors is scheduled to vote Nov. 5 on banning the sale of vaping products.

Michael Bloomberg contributed $6.5 million to the opposition campaign in San Francisco. Bloomberg, the former mayor of New York City, is the majority owner of Bloomberg Government’s parent company.