Few ballot items have a more immediate impact on your life as a referendum. Pioneered during the American progressive era, referendums allow Americans to initiate and vote on new laws directly. They don’t get quite the attention that presidential and gubernatorial elections do. However, they’re very straightforward: There’s no question of whether or not a referendum will be renege on its promise. The 2012 election features a number of state initiatives pertaining directly to your wealth. If one of these five is in your state, you may want to read up on them before heading to the polls next week.
California “Paycheck Protection” Initiative
The California “Paycheck Protection” Initiative is Proposition 32 on the California ballot. Its name is not exactly straightforward. The bill bans three things:
- Contributions by unions and corporations to local and state candidates.
- Automatic paycheck deductions for politics, whether they be done by corporations, unions or the government.
- Contributions from government contractors to state employees overseeing their contracts.
Only one provision really has anything to do with your paycheck. Few could oppose automatic paycheck deductions for political purposes. But the law does not allow for deductions to be made even voluntarily. Further, it’s not clear if this will apply to union dues generally: How will a distinction be made between the part of dues that goes toward administrative costs and what goes toward financing political candidates? Lastly, the bill will increase costs for local, county and state governments (estimated only at “over $1 million annually”). A similar proposition was on the 2005 ballot and failed.
Property Tax Limitations (Arizona, Florida, Louisiana, Oklahoma)
There are no fewer than four different property tax limiting referendums on the ballot for 2012. The laws vary from one state to another:
- Arizona’s Property Tax Assessed Valuation Amendment (Proposition 117) limits the degree to which your property can increase in value from one year to the next to five percent. It does nothing to cap local school district tax overrides.
- Florida has four different tax referendums on the ballot, all of which relate to property tax. Amendment 2 offers discounts on property taxes for disabled vets by the percentage they are classified as disabled. Amendment 4 bars assessed property tax increases on homes that have decreased in value, a clear nod to the housing crisis. The bill further caps assessment increases at 3 percent. Amendment 9 allows the state government to cut or eliminate property taxes for survivors of American servicemen and first responders who died in the line of duty. Amendment 10 exempts from property tax all property valued between $25,000 and $50,000.
- Louisiana boasts three property tax limitation laws, one of which relate to personal finance. Amendment 4 allows for a $75,000 exemption for certain veterans’ spouses and widows on top of the homestead exemption from local property taxes.
- Oklahoma’s property tax referendum is State Question 758. It limits the amount that local property taxes can be increased to three percent per year.
How these laws will affect your finances largely depends on how much property you own and if you are a veteran or spouse of a veteran. Limiting property taxes is also a complicated issue: It can easily lead to decreased services, new taxes such as local sales taxes. You might have more money in your pocket in the short term. In the long run, you might take a hit.
Massachusetts “Right To Repair” Initiative
Massachusetts Question One, popularly known as the “Right to Repair” initiative, requires manufacturers to offer certain diagnostic information directly to consumers. Manufacturers must also furnish safety information directly. Proponents believe that this will make for a more competitive service center market and a more level playing field when looking for the right mechanic. The law would do this by allowing independent service shops to access non-proprietary information, lowering consumer diagnostic costs.
A compromise was reached in Massachusetts General Court on the last day of the session. Both sides of the issue are now urging a “no” vote, as the compromise bill is seen as more attractive by the proponents of the original referendum.
Illinois Public Pension Amendment
The Public Pension Amendment in Illinois is another salvo in the political war over public employee pensions. If the amendment passes, any increase in public employee pensions will have to receive a 3/5ths majority in the General Assembly, as well as on any relevant city councils or school committees. The bill does not affect any current pensions. Still, current state and municipal employees may be loath to hand over any control of their pension to the electorate and its representatives. On the other hand, those concerned with rising state deficits could see this as a way to cap them.
So which way should you vote? The choice is up to you, but remember, when the ballot impacts your bottom line, it’s worth looking into!
Nicholas Pell is a Credit Sesame contributor and freelance financial writer whose work has appeared on Mint Life and Business Insider. His writing teaches people how to carefully consider debt, stay in the good graces of the IRS, retire in luxury and find affordable college educations. Pell lives in Hollywood, CA with his bulldog, Lulu.