Major anti-tax measures fail

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- Voters in several states defeated major anti-tax measures on Tuesday, acknowledging that their financially-strapped governments need revenue to provide services.

A trio of controversial tax initiatives in Colorado failed, as did an effort to slash sales taxes in Massachusetts, according to the National Conference of State Legislatures. This comes amid a wave of anti-incumbent fervor that swept Republicans to victory in the U.S. House of Representatives.

"Voters are not willing to go so far as to start to disassemble state government," said Jennie Bowser, an elections analyst for the conference. "They recognized there are programs and services they benefit from and they want them to continue."

At the same time, voters were not eager to raise taxes. A high-profile bid to tax millionaires in Washington state failed.

More than a quarter of the 160 initiatives on Tuesday's ballots dealt with state tax hikes, debt levels and other revenue issues. In total, there were 44 measures that could have drastically changed the way states fund themselves or make decisions on their budgets.

Though anti-tax initiatives routinely appear on ballots, they would have had a deeper impact this year since most states have yet to recover from the Great Recession. State and local officials will likely have to raise taxes and slash services in 2011 -- the fourth year in a row -- in order to balance their budgets.

The Colorado measures would have cut property taxes in half over 10 years and then used state money to fund schools, as well as banned all state borrowing and restricted local debt issuance. Voters also turned back an effort to slash the state income tax rate to 3.5%, from 4.63%, and reduce or eliminate taxes and fees on cars and telecommunication services.

In Massachusetts, meanwhile, voters turned back an attempt to cut the sales tax to 3% from 6.25%.

Those who went to the polls Tuesday didn't seem in the mood to hike taxes, either.

Washington residents were poised to defeat one of the few revenue-raising ballot measures, which called for establishing an income tax of 5% on single taxpayers earning $200,000 or more and a 9% rate on income above $500,000. (The threshold would be doubled for married Washingtonians.) The initiative would also have reduced property taxes by 20% and lower certain business taxes.

To be sure, voters did approve certain smaller tax cuts. Massachusetts residents rolled back a recently-enacted sales tax on alcohol. And in Missouri, measures to prohibit real estate sales or transfer taxes, as well as to ban local governments from imposing earnings taxes, were expected to pass. To top of page

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