- - Wednesday, November 3, 2010

California voters decided not to legalize pot, but voters in other ballot initiatives across the country made clear Tuesday their distaste for tax hikes, voting to limit how their states can raise revenue and changing how some budget decisions are made.

California’s closely watched Proposition 19 would have made it the first state to legalize marijuana for recreational use. But it was losing by nearly 10 percentage points with the final votes being tallied Wednesday, amid warnings from GOP Gov. Arnold Schwarzenegger and top officials of both parties that it could bring legal chaos. If it had been approved, adults could possess up to an ounce of pot and consume it in nonpublic places.

Tim Rosales, who managed the “No on 19” campaign, said the initiative lost despite the fact that liberal candidates did relatively well in California’s midterm elections.

“This is a state that just bucked the national trend and went pretty hard on the Democratic side, but yet in the same vote opposed Prop 19,” Mr. Rosales told the Associated Press. “I think that says volumes as far as where California voters are on this issue.”

According to the Brookings Institution, there were nearly 100 statewide and 450 local tax measures on Tuesday’s ballots.

Economic issues dominated in other state ballot questions, and despite the tight-fisted mood, voters still worked to preserve education funding, approving billions of dollars in public debt for schools.

“I’m not surprised by that given the political period we’re in,” said Scott Pattison, executive director of the National Association of State Budget Officers. He added that voters were affected by a rough economy and low trust of government.

“We’re still in a very scarce resource environment for states, so they’re going to have make tough choices,” he said, referring to how states will handle limits on tax hikes. “They’ve already done a lot of cutting. Will they continue to cut?”

The longest economic recession since the end of World War II has left states scrambling to balance their budgets. All states except Vermont must finish their fiscal years with balanced budgets, and for two years legislators have been slashing spending and raising taxes to wipe out deficits.

Most notably Tuesday, a measure establishing an income tax in the state of Washington failed. The initiative would have levied the tax on individuals making more than $200,000 a year and couples earning more than $400,000 a year.

Washington voters then went a step further - tax increases now require a two-thirds “supermajority” vote in the legislature or a statewide ballot.

Voters in Montana barred new taxation on property transfers or sales, while Massachusetts voters repealed the state sales tax on alcohol. Indiana cemented its statutory property tax cap in the state constitution, and Missouri added limits to property taxes and city income taxes to the constitution.

Some limits on taxes, though, did not win over voters.

A trio of proposed constitutional amendments in Colorado that would have radically limited how the state could tax and borrow failed. Dubbed “Armageddon on Colorado Ballots” by the Denver Post’s editorial page, the measures would have cut the state income-tax rate, banned future state borrowing, required voter approval for local government borrowing and cut or reduced other taxes.

Massachusetts voters also rejected a drastic tax cut, voting down a measure to reduce the state sales tax to 3 percent from 6.25 percent, which would have cost the state $2.5 billion.

Many measures that succeeded Tuesday also limited government by changing states’ budget processes.

In California, where the state government regularly deadlocks over passing a budget for months, voters agreed to change the legislative vote requirement necessary to pass a budget from two-thirds to a simple majority.

The Golden State now also requires lawmakers to forfeit pay if they fail to pass a budget bill by June 15.

Hawaiians agreed to issue tax rebates when the state runs a budget surplus, while North Dakotans approved creating a reserve from taxes collected on oil and gas mining. South Carolina, Oklahoma, and Virginia all voted to expand their rainy-day funds.

Half of the nearly $16 billion in bond ballot measures in Tuesday’s elections were dedicated to schools, according to the Bond Buyer. More than 10 percent was for financing colleges and other educational purposes.

In some of the more unusual ballot questions, Oklahoma voters approved a constitutional amendment to forbid state courts from considering or citing Islamic-based “Shariah” law in reaching their decisions. Voters in Denver meanwhile overwhelmingly rejected a proposal to establish a “Commission for Extraterrestrial Affairs,” which supporters said was designed to interact with aliens should they make an appearance in the city.

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