Olympia income tax and I-732 carbon tax rejected; Oregon voters veto business tax hike. Transit tax passing in Puget Sound region.

Yesterday’s elections decided a number of tax issues we’ve been following. (It did a lot more than that, of course, but we’ll leave punditry to others.) 

In Olympia, voters rejected the municipal income tax backers had hoped provided a vehicle for state Supreme Court reconsideration of the the ban on a state progressive income tax. 

Early election results show Olympia voters rejecting Initiative 1, which calls for creating a public college tuition fund that’s paid for by an income tax on the city’s wealthiest households.

In Tuesday’s count, about 54.8 percent of voters are saying no to the measure, according to the Thurston County Auditor’s Office.

Initiative 732 has also been defeated decisively. The Puget Sound Business Journal reports:

Washington state voters rejected the Initiative 732 proposal that would have created the first state carbon tax in the U.S.

About 59 percent of voters were rejecting the initiative, according to the latest vote tally.

…The initiative would have directly affected “every business manufacturer in the state,” said Brandon Houskeeper, government affairs director for the Association of Washington Business and sponsor of the No on 732 campaign. “Companies (would) have to look to efficiency gains and to divert these costs.”

The PSBJ notes the financial advantage went to the pro campaign.

Yes on 732 supporters out-raised the anti-carbon tax camp 2-to-1, with $2.8 million in contributions. No on 732 received just over $1.4 million.

We were also interested in Measure 97 in Oregon, a “massive” business tax increase that has been rejected by Oregon voters. The Oregonian editorial board writes that the defeat does not mark the end of tax hike discussions in the state. 

Voters’ rejection of the Measure 97 corporate tax proposal marked a victory for rational thinking amid fantastical claims. Despite the pro-97 campaign’s insistence that a massive tax on large companies’ sales was the magic bullet for fixing education funding, voters recognized the hit to consumers, the unfairness of the tax and the unanswered questions of where the money would go. While Oregonians may want desperately to reverse the disinvestment in education that began decades ago with the passage of anti-tax initiative Measure 5, the answer on Tuesday was emphatic: Not this way.

But the victory is a fleeting one. As flawed as Measure 97 was, Gov. Kate Brown and other elected leaders went all in for the tax proposal, whose expected $3 billion in yearly revenue would doubtlessly help the state confront an expected $1.35 billion budget shortfall in the coming biennium. With the measure’s defeat, however, the state has no plan in place for how it will handle the financial freight train barreling down the tracks and threatening to devastate funding for core services.

A major exception to the rejection of tax increases comes in the metropolitan Puget Sound region, which appears to be approving a major transit expansion

Voters appear ready to open their wallets Jan. 1 for a bigger transit future, by favoring a record tax increase to finance light-rail, commuter-train and bus-line extensions to rival some of the nation’s longest transit networks.

The $54 billion, 25-year Sound Transit Proposition 1 was leading with 55 percent overall approval, following Tuesday night counts in urban King, Snohomish and Pierce counties.

This is the revenue package.

ST3’s $53.8 billion in investments would be enabled by: (1) a sales tax of 0.5 percent ($.50 on a $100 purchase) in addition to the 0.9 percent currently collected; (2) a motor vehicle excise tax (MVET) of 0.8 percent ($80 annually per $10,000 of vehicle value) in addition to the 0.3 percent MVET Sound Transit is collecting through 2028; and (3) a property tax of 25 cents for each $1,000 of assessed valuation. Learn more on the ST3 Funding factsheet.

For readers interested in other results across the country, the Tax Foundation provides a quick rundown on major tax activity.