Joseph Krist
Publisher
If nothing else, last week’s election results let us know where people stand on issues. Florida excluded, voters largely chose not to take a meat ax to many policies they did not like. While there were several specific limits on taxing ability or rates which passed, they largely preserved the status quo in those states. Voters do like to have a voice as they clearly rejected orchestrated efforts to limit initiative rights. And clearly, voters hate data centers. We are not surprised.
The primary impact we expect to see is a real effort to fight the Medicaid cuts coming in January. That and an effort to reinstate the various subsidies which made coverage under the ACA manageable (if not completely affordable) would limit further impacts on hospitals as they navigate an already difficult environment. Efforts will also be made to relieve the ideological pressure on higher education which has hurt funding but also driven many scientists away.
Overall, we see the results as generally neutral for muni credits. What would be even more useful would be changes in policies in sectors like transportation and renewable energy. Those would bring a level of certainty to funding and planning which has been sorely lacking leading to local economic disruption which is totally avoidable.
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DATA CENTERS
Some 33 ballot measures to restrict data centers were passed by voters or were leading in ongoing vote counts, according to the tracking website Data Centers on the Ballot. Roughly a dozen similar measures were on the ballot in communities where vote totals had not yet been announced. The measures included outright prohibitions, temporary moratoriums, limitations on energy use, mandating voter approval before construction and advisory measures urging local officials to restrict data centers. In nearly every result so far, voters overwhelmingly backed new restrictions or declined to approve measures that affirmed the buildout of such facilities.
AMENDMENT 3
Well, they did it! Florida voters approved Amendment 3, the proposal to significantly limit property taxes. It got the 60% supermajority required for it to pass. Now, local governments will be challenged to fund services. An increased reliance on sales taxes and fees – both highly regressive – is an inevitable near-term outcome.
CALIFORNIA
Prop 40, the wealth tax failed. Prop 2 passed increasing the potential size of the Budget Stabilization Fund. Prop 3 passed which continues income tax increases to support education. Prop. 43 would have established a two thirds supermajority vote for increases in property taxes. It was defeated.
ARIZONA
No pictures, please! At least that’s what Arizona voters said. Prop. 319 – a ballot measure banning the state from using photo enforcement systems to catch traffic violators has passed. The measure bans the government from installing or using new photo enforcement systems to identify people who violate traffic laws. For municipalities that are already using photo systems, the measure requires the local government to get local voters’ approval before continuing to use the systems.
Proposition 316 would prohibit local government from imposing or increasing a tax on the sale of food items without voter approval and cap the tax rate at 2%. It passed.
TAXES
Washington voters rejected an amendment which would have repealed the “millionaire tax” approved by voters last year. Colorado voters passed an amendment to establish a graduated income tax rate structure. An amendment to limit the maximum corporate tax rate failed. North Carolina voters approved both tax limitation items on the ballot. Wyoming voters rejected a homestead valuation reduction proposal. Tennessee voters banned the state from imposing a property tax. Iowa established a legislative two thirds supermajority requirement to increase taxes. Idaho voters rejected a proposal to allow the legislature to limit initiative rights on the issue of cannabis. Massachusetts voters rejected repeal of legalized cannabis.
PUBLIC POWER
The latest effort to establish a public power utility fell a bit short when Ann Arbor, MI voters defeated Proposal E. Proposal E would have established a municipal electric utility on paper and set up a process for electing and appointing a nine-member board for it in 2028. City Council formally opposed the ballot proposal and the city challenged it in court.
INITIATIVE RIGHTS
Voters rejected bids to establish 60% supermajority requirements to pass ballot initiatives in the three states that saw them on the ballot – North and South Dakota and Utah. Montana voters added the power of initiative and referendum to the state’s Declaration of Rights.
Missouri voters passed Amendment 6 which prohibits the legislature from repealing or amending a citizen initiative unless at least 80% of both the House and Senate vote to refer a proposed change to the ballot, and voters then approve the change, prohibit the legislature from making changes to the citizen initiative and referendum process, among other changes. Those same voters rejected the creation of a public endowment fund to replace taxes.
CLIMATE ON THE BALLOT
The proposal to create a Eugene Clean Energy Fund was approved with 58% of the vote in Eugene, OR. Measure 20-388 would require some large retailers and banks to pay a new annual licensing fee, equal to 2% of their gross profits in the city. The resulting revenue would be spent on clean energy projects. The fee requirement would take effect in 2029.
TRANSIT ON THE BALLOT
Voters in the Bay Area passed the regional transit measure (RTM) that will provide crucial funding to Bay Area transit agencies. Approximately $980 million will be generated annually for 14 years to support public transit agencies in the Bay Area counties of Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara. The money will be generated from a 0.5% sales tax increase in four. For San Francisco residents, it will be a 1% sales tax increase. Those taxes will go into effect in April of 2027.
Seattle voters extended a 0.3% sales tax will provide about $138 million annually over 10 years to fund transportation projects and programs. In a number of localities, voters were asked to approve a range of sales and other taxes to fund mass transit projects. The localities range in size and location. Issues were approved in Kansas, South Carolina, California and North Carolina. In primary and special elections prior to the general, transit ballot measures had an 89% pass rate.
NASHVILLE AIRPORT TAKEOVER
In 2023, state legislation removed the mayor of Nashville’s authority to appoint all seven members of the board that runs Nashville International Airport. Instead, the board now consists of eight members, and the mayor, the speaker of the House, the speaker of the Senate and the governor all have two appointments.
In April of this year, Senate Bill 2473 amended the previous law to apply to all regional and metropolitan airport authorities rather than just appearing to target Metro. This updated language allowed the state to bypass the part of the state constitution’s Home Rule provisions that protected local governments from targeted action from the state legislature. The bill also vacated the present board of commissioners for each airport authority in Tennessee.
State leaders installed a new airport authority board for Nashville, while Mayor Freddie O’Connell and Metro continued to recognize the old board, which continued to meet in parallel with the newly appointed board. The mayor had refused to appoint representatives to the state-controlled board.
CHICAGO TRANSIT FUNDING
The Northern Illinois Transit Authority (NITA) proposed a 2027 operating budget of $5.02 billion, about 16.7% higher than this year’s $4.3 billion budget. It is the first budget proposed by the new agency which was created by the Illinois legislature. The agency replaced the Regional Transportation Authority in September. The budget would add all-night bus service, more frequent trains and over 200 new electric or hybrid buses — all without raising fares.
NITA attributes much of its new spending power to an expected $1.3 billion in additional revenue next year, drawn from an expanded regional sales tax and the redirection of some state sales tax on gas. Press reports indicate NITA is funding a Chicago Transit Authority pilot of high-barrier gates early next year specifically aimed at combating fare evasion. Ridership has been climbing — the region’s fixed-route system logged 373.5 million rides in 2025, up 12.3 million over 2024. That should generate increased marginal with improved fare collection measures.
DALLAS ARENA VOTE
Unofficial results from Tuesday’s vote in the city of Plano showed 54.6 per cent of the more than 102,000 votes cast were against the single ballot proposal to authorize taxes on tickets, parking, car rentals, hotel rooms and the professional teams that would use the arena. Those taxes were to help the city pay off up to $700 million in bonds it has committed to the proposed $3 billion mixed-use development that would include the new arena.
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