Tax measures are on the ballots in several state and local governments this year.
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Headed to the polls today? Tax measures are on the ballot for millions of taxpayers, but typically as local-level voting issues. Only a handful of states, notably Colorado, Texas, and Washington, face state-level ballot questions. Here’s a look.
Colorado
In Colorado, voters will decide on two statewide ballot measures related to funding for the “Healthy Meals For All” school meal program.
The first, Proposition LL, asks whether the state should be allowed to keep and spend $12.4 million in excess revenue generated under Proposition FF, which voters approved in 2022. Proposition FF created the Healthy Meals for All program, which provides free breakfast and lunch to every public school student in Colorado. The program is funded by limiting state income tax deductions for individuals earning more than $300,000 per year. However, the program has recently faced a funding shortfall. Lawmakers filled the gap last year, but that solution was temporary, forcing voters to now make a choice.
Proposition LL would permit the state to retain and use revenue that exceeded initial estimates from Proposition FF, rather than refunding it to roughly 194,000 high-income taxpayers. If voters reject the measure, about $12 million would be refunded to those taxpayers.
The second measure, Proposition MM, would increase income taxes on the same group of taxpayers—individuals earning more than $300,000 annually—to raise an estimated $95 million annually for school meal programs.
Taken together, voters will decide whether to sustain and potentially expand Colorado’s school meals program, or to scale back state funding.
Texas
In Texas, voters face a whopping 10 statewide ballot measures.
Proposition 2 would ban the state legislature from ever creating a capital gains tax, whether on profits people have already made from selling investments or on gains on paper that haven’t been cashed in yet. Texas doesn’t have this kind of tax today, and this proposal would make sure it stays that way. It’s similar to Propositions 6 and 8: Proposition 6 would block lawmakers from creating new taxes on securities (such as stocks and bonds) and would ban occupation taxes on brokers and dealers. At the same time, Proposition 8 would prevent the legislature from taxing estates or inheritances.
Some measures target specific groups. Proposition 7 would allow property tax breaks for the surviving spouses of U.S. veterans who died in connection with their military service (often referred to as “Gold Star families”), while Proposition 11 would expand school property tax exemptions for elderly and disabled homeowners. Proposition 10 would grant a property tax exemption to taxpayers whose homes were destroyed by fire. At the same time, Proposition 17 would create a property tax exemption for border security infrastructure, such as fencing, barriers, or surveillance systems built on private property.
Inventories are also on the ballot. Proposition 5 would exempt animal feed from property taxes when it is stored as inventory for sale, while Proposition 9 would let small businesses exclude up to $125,000 of inventory from local property taxes.
Proposition 13 would impact most homeowners in the state by raising the statewide school property tax exemption from $100,000 to $140,000.
Washington
Voters in Washington will vote on Senate Joint Resolution 8201, which authorizes the state’s long-term care insurance fund to invest in stocks and other equities, rather than being limited to bonds and other fixed-income securities.
Other States
Voters in Alabama, Arkansas, California, Florida, Idaho, Iowa, Michigan, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Utah, and Virginia will be asked to decide on local measures primarily involving state and local bonds and property taxes.
State Bond Measures
State bond measures are a relatively painless way for governments to quickly fund major public projects, such as schools and roads, by selling bonds to investors. In most cases, when it comes to bonds, the state must ask voters for permission to issue them, since bonds create obligations on taxpayers. That’s because bonds are essentially loans that will be repaid over time—typically 20-30 years—with interest using public funds, often from taxes.
(If bonds are to be repaid from specific revenue streams like tolls, issuing bonds may not need voter approval.)
In most cases, local bond measures function the same way.
Investors like bonds because they offer steady, predictable income (typically, the interest rates are fixed). It’s particularly attractive to investors seeking reliability rather than growth, since bonds are generally considered safer than stocks. The “safety” feature comes from the fact that most government bonds are guaranteed. U.S. Treasury bonds, for instance, are backed by the full faith and credit of the federal government, meaning they carry a low risk of default. Municipal or state bonds can also be low-risk, depending on the particular government’s credit rating.
Also appealing? Some bond interest is tax-free, which makes them especially appealing to higher-income investors. And municipal bonds (issued by states or cities) are often exempt from federal income tax and sometimes from state and local taxes, too.
Property Taxes
Property taxes are a significant source of funding for local governments in the U.S. In many states, property taxes are the largest source of funding for public services such as schools, fire and police departments, libraries, and parks.
Property taxes are based on the value of real estate, including the land and any buildings, and are paid annually by property owners. The amount a property owner owes is determined by multiplying the property’s assessed value by the tax rate. The assessed value can be a key point of disagreement—the local tax assessor’s estimate of how much a property is worth (based on factors like size, location, age, and improvements) may be lower than recent sales of similar properties in the area, but higher than the homeowner believes it is worth for tax purposes.
How often property values are reassessed can also be a source of frustration. Some areas automatically reassess those values every year, while others may not reassess for several years—the time gap can be frustrating when property values fluctuate. For example, during the pandemic, housing prices were very high in some areas and dropped dramatically the following year. In a locality heavily impacted by swings in property values, the timing of the reassessment could mean the difference between paying thousands of dollars more (or less) in property taxes.
To counter swings in value, some localities offer exemptions that reduce the property’s taxable value. That can look like a homestead exemption that lowers the taxable value of primary residences (like those in California and Maine) for property tax purposes. It could also be an exemption or freeze for senior citizens, veterans, and disabled homeowners—more than half of all states offer property tax exemptions or tax credits for qualifying seniors.
Because local governments depend heavily on property taxes, the amount collected can influence the quality and availability of public services. For example, New Jersey, which leads the country in property tax collections, is also consistently recognized as having some of the best public schools, while states like South Carolina and West Virginia, which tout low property taxes, are typically near the bottom of public school rankings.
Property taxes are particularly an issue for federal income tax purposes. Before 2017, taxpayers who itemized could deduct the full value of their state and local taxes on Schedule A—a benefit for taxpayers in high-tax states. As part of the Tax Cuts and Jobs Act, the deduction was significantly reduced to a cap of $10,000, limiting the total amount of deductible state and local taxes to $10,000. (The average local property tax bill in New Jersey was a record-high $10,095.)
The One Big Beautiful Bill Act (OBBBA) changed the SALT deduction again. Now, under OBBBA, if you itemize your deductions, you can deduct state and local income taxes or sales taxes, plus state and local property taxes up to a total of $40,000, often referred to as the SALT cap. That’s per return, not per taxpayer, so it’s the same amount for married taxpayers filing jointly and single filers (you don’t get a bigger deduction if you’re married). However, if you file as married filing separately, the deduction is cut in half to $20,000 per return.
(The boost is only temporary. In 2030, the cap returns to $10,000.)
What’s Next
As voters in these states make their choices, the results could signal how Americans feel about tax policy and spending. Measures like those in Colorado, Texas, and Washington show the balance many states are trying to strike—keeping taxes low while ensuring funding for schools and essential services. The outcomes could affect not only how these states and local governments spend their money, but also how taxpayers feel overall about paying for services—an issue that Congress is facing now as the government shutdown rolls on.
