This hasn’t been a good month for anti-tax crusaders. Voters in several elections sent a clear signal that they are willing to dig deeper to pay for government services.
A week ago, Colorado citizens suspended the nation’s showcase tax and spending limitation law, enriching state coffers by $4 billion over the next five years.
Yesterday, California voters rejected Governor Arnold Schwarzenegger’s spending limit initiative.
Three years after repealing the Washington State legislature’s attempt to raise gas taxes for road projects, voters there gave the thumbs up to a new 9.5-cent tax.
Perhaps most tellingly, architects of record-breaking tax increases paid no price at the polls. Mike Bloomberg took a second mayoral term in a landslide after engineering the largest property tax increase New York City has ever seen.
In Virginia, the threats made by the Club for Growth and other groups to unseat legislators who supported the commonwealth’s big tax package proved hollow. Lieutenant Governor Tim Kaine eked out a come-from-behind win in the governor’s race, running explicitly as the keeper of Governor Mark Warner’s policy flames--higher taxes and all.
"The Kaine victory is the exclamation point," says Larry Sabato, head of the University of Virginia’s Center for Politics. "Who would have believed that Virginia would ratify the largest tax increase in its history by electing the chosen successor of the governor who secured the tax hike?"
These elections turned on local concerns, but most had the same underlying political dynamics. Public employee unions were predictably in favor of greater revenues, but the generally anti-tax Republican Party found itself split in places, with prominent business groups supporting the tax hikes in question.
This particular group of tax increases were touted for specific purposes, such as roads or education. Supporters were careful to suggest that they weren’t increasing the size of government, just trying to pay the bills that were already there.
The theme of relative modesty was in keeping with the tax increases that have been reluctantly proposed in recent years by Republican governors such as Dirk Kempthorne of Idaho and Kenny Guinn of Nevada.
The Colorado measure, which will let the state hold onto more money, instead of offering refunds to taxpayers, "was definitely not cast as a tax increase--in fact, the first three words were 'without raising taxes,'" says Chris Kinnan, of Citizens for a Sound Economy. "It was a failure on our side to communicate that this was a tax increase."
If the puff seems to have gone out of anti-tax activists’ sails just now, they are confident that prevailing winds are still favorable.
Both candidates in the New Jersey governor’s race stressed their desire to lower chart-topping property taxes. Several governors standing for re-election next year, including some Democrats, plan to tout their success in filling billion-dollar deficits without having raised broad-based taxes. Despite the setbacks in Colorado and California, tax and spending limitation measures will be moving in several states, including Ohio, Oregon and Wisconsin.
But anti-tax fever appears to have cooled, for now. Voters never complain that their taxes are too low. But they can be convinced, by the right messengers operating in the right set of circumstances, that they will need to pay a little more.