Are State and Local Governments Nearing a New Tax Revolt?
Sponsored by the Urban Institute and the Urban-Brookings Tax Policy Center
Tuesday, October 7, 2008 12:00–1:30 p.m. EDT
(Lunch will be available at 11:45 and the event will begin promptly at noon)
Katharine Graham Conference Center, Urban Institute
- David Brunori (moderator), research professor of public policy, George Washington University; executive vice president, editorial operations, Tax Analysts; author, State Tax Policy: A Political Perspective
- Chris Edwards, director of tax policy studies, Cato Institute
- Tracy Gordon, assistant professor, University of Maryland School of Public Policy
- Nick Johnson, director, State Fiscal Project, Center on Budget and Policy Priorities
- Kim Rueben, senior research associate, Urban Institute and Tax Policy Center
Thirty years after Proposition 13 passed, some signs point to another tax revolt. Officially known as the "People's Initiative to Limit Property Taxation," California’s ground-shifting Proposition 13 was widely heralded in 1978 as a model for citizen-driven regulation of state and local taxes. In fact, while Proposition 13 stabilized property tax bills, it shifted power from local governments to the state. The initiative also set rules that contribute to California repeatedly missing its budget deadline, including this year’s delay of almost three months.
With the current economic downturn, both state coffers and individual pocketbooks are hurting. Taxpayers are demanding that states, counties, and municipalities do more with less. This November, Massachusetts voters will decide whether to eliminate the state income tax and North Dakota ns will vote on a strict tax limit measure. At the same time, Colorado voters may consider putting a long-term hold on elements of the "Taxpayer’s Bill of Rights," their state’s tough-as-nails limit. Tax relief and tax limits were discussed and either delayed or thrown off the ballot in other states, including Arizona, Florida, and Nevada.
With state budget gaps this year forecasted to total about $50 billion and continued dour financial situations expected next year, are we on the cusp of a new round of tax limitations? What is the prognosis for state and local budgets? At its 30th anniversary, what is Proposition 13's legacy for sound tax and budget policy? And what are these measures' upsides and downsides?