Read their lips: No new taxes

Colorado voters made one message clear this week — “Read our lips. No new taxes.”

In Tuesday’s election, voters across the state voted 2 to 1 against Proposition 109, a ballot measure that would have used higher tax rates to generated $3 billion for the school system, which has seen its budget slashed in recent years.

New taxes proposed by Colorado municipalities also failed, according to the Denver Post.

Aurora voters rejected a $114 million tax increase for recreation centers, Douglas County voters said “no” to school tax increases, Cañon City voters rejected a tax for library improvements and Boulder voters appeared to be approving the creation of a municipal electricity utility but wouldn’t pass a tax hike to fund it.

Wall Street Journal editorial page editor Paul Gigot characterized the ballot results as a blow to anti-Wall Street ideology.

If the income-redistribution sentiments of “Occupy Wall Street” are sweeping the nation, you wouldn’t know it from the election results in the presidential swing state of Colorado Tuesday night.

And he’s not the only one trying to apply the results to the national political landscape.

As Reuters reported, the ballot outcome “was being watched closely as an indication of voter sentiment on tax hikes in a key battleground state for the 2012 presidential election.”

To me, though, the bigger implication is for local and state governments trying to help fill their budget gaps with increased taxes.

Voters just aren’t going for it.

Tuesday’s results in Colorado bring to mind California two years ago when voters defeated a package of tax-hikes and other measures that Gov. Arnold Schwarzenegger had championed as a means to tackling the state’s budget disaster.

As the LA Times wrote at the time:

Anti-tax activists called the propositions’ rejection a defeat for what they characterized as the tax-and-spend status quo.

“People aren’t dancing in the street over this; they’re tired and disgusted over all that’s gone on,” said Jon Coupal of the Howard Jarvis Taxpayers Assn. “Maybe now our governor and Legislature will get the message.”

The message is clear. What’s less clear is how municipalities are going to dig themselves out of budget holes without hitting their residents with higher taxes.

Even if and when the economy recovers and sales and property tax revenues go up, many public agencies will likely be looking at budget gaps fueled by the increasing cost of pension and health benefits for public workers.

That means that if voters continue to refuse tax increases, even for typically sympathetic issues like schools, public agencies will have to get major union concessions, cut back on services or increase fees for services.

Any way you look at it, it’s not a pretty picture.

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