Introduction

Taking the Initiative

ore and more frequently, corporations — and groups that ostensibly represent the citizenry — can have dramatic impact on tax policy in a direct way: through ballot-box measures.

In the first half of the 20th century, many voter initiatives focused on new programs and increased spending. But in the last half of the century, the pendulum moved in the other direction. A study of voter behavior by Bill Piper, of the Initiative and Referendum Institute, shows that from 1978 to 1999 there were 130 tax initiatives on statewide ballots. Roughly two-thirds of them were anti-tax — cutting, eliminating or limiting taxes in some way. Of these, 41 passed. The numbers for more recent times are quite dramatic. A whopping 67 percent of all “anti-tax” initiatives on the ballot between 1996 and 1999 passed.

When citizens put their hands directly on the tax levers, it often gets much harder for states to pay the bills. California, whose Proposition 13 became the poster boy for hobbling ballot box measures, is just one name on a list of states that are choking on tax policies put in place by voters. Washington, Oregon and Colorado are just a few of the others confronted with adequacy problems thanks to these measures.

These maneuvers not only have been influential in changing individual taxes but also in paralyzing state legislatures and local governments. Fifteen states have passed initiatives or referendums that require “supermajorities” — more than 50 percent of the vote — on tax decisions made by legislatures. These aren’t easy to overcome. In Montana, where the supermajority is defined as three-quarters of the legislature, Montana state House Majority Leader Roy Brown saw that as a formidable obstacle. “We can’t even get a three-fourths majority vote to go to the bathroom,” he told the Billings Gazette in November.

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