2023’s State and Local Tax Ballot Measures: Voters to Weigh in on Property Taxes, Wealth Taxes, and More

This blog was updated on November 8, 2023 to include the unofficial results for each of the ballot questions below. 

While November’s off-year elections are relatively quiet, there are a number of important tax questions on state and local ballots. Voters from Ohio to Texas will weigh in on everything from wealth taxes to property taxes next month. Here’s a quick rundown of the major tax initiatives on tap:

Texas could prohibit a wealth tax

With Proposition 3, Texas voters will consider banning wealth taxes. On top of the state’s existing prohibition on personal income taxes, this new ban, if approved, would make it much harder for the Lone Star State to create an equitable tax code and raise the revenue it needs to create thriving communities. Concentrated wealth is a pressing social problem, and many states are pursuing tax policies to better tax the wealth that escapes taxation entirely and exacerbates economic and racial inequities. In Texas, like in most other states, extreme wealth – defined by ITEP as the wealth held by households with net worths of $30 million or more – is held mostly by those at the very top. The wealthiest 5 percent of Texans hold 74 percent of the extreme wealth while the middle 20 percent hold just 2.5 percent.

Update (11/8/23):This measure passed with about 68 percent of the vote.

Texas could approve wide-ranging property tax cuts

With Proposition 4, Texas voters will consider signing off on several components of a property tax cut plan passed in a special legislative session in July. If approved, the measure would lead to a wide range of tax changes, including increasing the state’s homestead property tax exemption from $40,000 to $100,000, exempting the state’s spending on property tax cuts from counting against its constitutional spending limit, and temporarily capping appraisals on commercial property and certain residential property like second homes or rented homes. The total package approved by the legislature this summer will lead to a revenue loss of $12.7 billion over two years, and lawmakers did not pursue any revenue-raising offsets. As noted above, voters will also be deciding on a new amendment that would tie future lawmakers’ hands even more.

Update (11/8/23):This measure passed with about 84 percent of the vote.

Colorado could cut property taxes and backfill local revenue with state funds

In Colorado, voters will consider Proposition HH, which would cut residential property taxes and allow the state to backfill that lost revenue to local governments and schools. If approved, the measure would reduce property tax rates statewide while raising the cap on the state’s damaging revenue limitation program (known as TABOR) to protect schools and local governments from the property tax cuts. The measure would also create a $20 million a year relief fund for renters, institute a local property tax cap (which could be exceeded with a public hearing and vote to exceed it), and allow some seniors to take their homestead exemption property tax benefit with them when they move. While Colorado would be better off exploring deeper reforms, including ending TABOR, this measure itself would be a mixed bag in terms of revenue and tax fairness. The researchers at the Colorado Fiscal Institute have concluded that it is nonetheless a net benefit to the state. Polling conducted this summer by Magellan Strategies found voters split pretty evenly on the initiative.

Update (11/8/23):This measure failed with about 60 percent of the vote.

Ohio could legalize and tax cannabis

Issue 2 in Ohio will allow voters to weigh in on whether to legalize adult-use cannabis for people 21 and over, and implement a 10 percent tax on all cannabis sales. The tax is projected to raise between $276 and $403 million a year by year five, according to The Ohio State University Drug Enforcement and Policy Center. That money would be used to create a cannabis social equity and jobs program to help those disproportionately affected by past marijuana-related law enforcement enter and succeed in the state’s new cannabis industry. Recent polling by Baldwin Wallace University finds that more than 57 percent of voters favor the measure while only 35 percent oppose it. If approved, Ohio would become the 21^st state to legalize the sale of adult-use cannabis.

Update (11/8/23):This measure passed with about 57 percent of the vote.

Cincinnati could raise its income tax

Cincinnati, Ohio, voters could take step one of a two-step ballot process that could raise the city income tax from 1.8 to 2.1 percent to fund affordable housing. Issue 24 would raise an estimated $40-50 million a year, according to advocates. The revenue would go into an affordable-housing construction fund aimed at people making 80 percent or less of the area’s median income, with the bulk of the funding going to housing for very low-income families (at or below 30 percent of area median income). The November ballot would create the fund, and then voters would need to come back next November to approve the tax increase.

Update (11/8/23):This measure failed with about 69 percent of the vote.

Santa Fe could enact a tax on high-dollar home sales

Voters in the city of Santa Fe, New Mexico, will consider a 3 percent excise tax on the value of homes sold for more than $1 million to fund affordable housing. The so-called “mansion tax” would apply only to dollar amounts over $1 million, and that threshold would be indexed to inflation. If approved, the new tax is projected to raise about $4.5 million a year for the Santa Fe Affordable Housing Trust Fund. Polling released by initiative proponents last month shows strong support for the measure.

Update (11/8/23): This measure passed with about 73 percent of the vote.

Even in this slow year for candidate elections, the decisions that voters in states and cities make could strengthen or weaken revenue for needs in their communities and could change how taxes are distributed across the income spectrum. In the places where tax fairness is on the ballot, much is at stake.

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