May 21, 2006

Nashville Voters May Get More Control Over Property Tax Increases

The Tennessean profiles the effort by Tennessee Tax Revolt to amend Nashville's city charter to require referendums on property tax increases. The paper also includes audio of Gov. Phil Bredesen, a Nashville resident, opposing the proposed charter change. Gov. Bredesen raised Nashville's property taxes three times while serving as mayor of Nashville. Gov. Bredesen also opposes Senate Joint Resolution 629, state Sen. Jim Bryson's proposal to make it tougher for the state legislature to exceed the state constitution's cap on the annual growth of the state budget. Gov. Bredesen wants to continue the spending spree. SJR 629 is on the agenda of the Senate Finance, Ways & Means committe on Monday. It has been deferred several times.

In a sidebar to the Tennessean's story, some public and officials fret that, if given the right to vote on property tax increases, voters will never say "yes" to higher taxes, but other public policy officials disagree.

Tennessee State University public policy professor Rodney Stanley said voter distaste for "taxation of any kind" would keep tax rates flat even as public needs grow.

But Vanderbilt University's James W. Guthrie said putting property tax increases to the people doesn't reduce or increase spending for schools. Guthrie is director of the Center for Education Policy at Peabody College of Vanderbilt.

"We can't find that it does anything bad or good for education funding. If the issue is, 'Will it reduce the amount of money, or increase the amount of money,' our experience in other states doesn't display that it does either," Guthrie said. "New York citizens in effect approve the budget and pass a tax rate, and New York's one of the highest-spending states there is."

The key to passing tax increases is linking them to popular programs, said California researcher John Matsusaka, who added they tend to like local programs over state programs and parks over welfare.

Matsusaka is president of the Initiative and Referendum Institute at the University of Southern California.

"People sometimes think if voters have this right, they'll never approve taxes for anything, and that's not true. Voters are willing to pay for things they like, like schools, like police, like a park."

Colorado's constitution gives voters there the right to vote on ALL tax increases at the local and county level. They also vote on any proposed increase in government debt, and on spending surplus tax revenue.

As I explained in this research paper published three years ago and extensively updated in September 2005, from November 1993 through November 2004 Colorado voters at the local and county level have faced more than a thousand ballot questions asking their approval for tax increases, debt increases, new taxes and permission to let the government keep and spend surplus revenue. Anyone who thinks requring voter approval on tax increases and higher government spending automatically means a "no" vote every time is .. uninformed. In more than a thousand such referenda, Colorado voters said "yes" to higher taxes and more spending more than half of the time.

According to the Colorado Municipal League, voters approved 248 of 459 ballot questions to allow tax increases or new taxes, and rejected 211, a 54 percent approval rate for higher taxes. They also approved debt increases (bond issues) 68 percent of the time, and approved allowing government to spend surplus tax revenue, rather than rebate it to taxpayers, 88 percent of the time.