August 19, 2003

Putting Limits on the Taxin'

Robert Hawley sent along a link to this story in Sunday's Washington Post about some "tax activists" in two counties in Maryland who are pushing for a referendum to cap property taxes and, in one county, to roll back a recent increase in the county income tax. Yes, they have a county income tax there. Can you imagine such a thing? The WaPo story is dripping with bias against such tax-limitation efforts, portraying the anti-tax activists as "angry" and fiscally irresponsible while devoting numerous paragraphs to the views of government officials who warn of dark consequences if the referendums get on the ballot and are approved by voters. But it also has this encouraging news about grassroots activism against ever-rising taxes...

Ballot questions to limit taxes became popular in the 1970s, when voters in Prince George's and in California approved controversial caps on property-tax rates. Similar referendums surfaced across the country - including in several counties in Maryland - in the early 1990s, but the pace has since slowed in many states. Today, as more local officials look to raise revenue to bail out recession-strapped budgets, government experts predict the backlash will be another sustained push for voter-imposed tax limits.

"It is spiking back up, from what we can tell," said M. Dane Waters, president of the Initiative and Referendum Institute, a nonpartisan research organization that tracks ballot referendums. "The trend seems to be as the local governments start trying to get more money, some citizens say, 'We want to stop that.' "

Montgomery and Howard are two of the 13 Maryland counties that raised taxes this year. Nationwide, about 25 percent of cities planned to raise property taxes this year, according to a February survey by the National League of Cities. The increases are causing an uptick in the number of ballot initiatives seeking voter-imposed tax limits, including efforts in Wisconsin, Georgia and Tennessee. Waters said voters approve about half of tax referendums that make it onto the ballot.

"In our estimation, this could very well mark the third phase of the modern tax revolt," said Peter Sepp, a vice president of the National Taxpayers Union, who said the first two phases were California's Proposition 13 in 1978 and the anti-tax efforts of the early 1990s. "We are seeing this effort spring up on a county-by-county, city-by-city basis."

FYI: Sepp and the I&R Institute are among the many sources of information I relied on in writing this white paper about the Taxpayers Bill of Rights in Colorado and why a similar constitutional amendment would ensure fiscal discipline in Tennessee's state budget.