Fiscal Ballot Measures: What Voters Passed in the 2022 Midterms.

• Author: Jimenez, Andrea

While much of the attention on the 2022 midterm elections revolved around the balance of power in Congress, voters across the country approved several new tax and budget initiatives. Many of these will have modest impact on state budgets, but some were estimated to reduce or increase revenues by tens to hundreds of millions of dollars.

Noteworthy Income Tax Changes

Colorado Proposition 121

Proposition 121 permanently reduces the income tax rate for individuals and corporations from 4.55% to 4.4%. The state temporarily reduced the income tax rate to 4.5% in 2020 because revenues exceeded limits set by the Taxpayer's Bill of Rights. The temporary reduction, which was intended to return excess revenues to taxpayers, was expected to last through 2024. Now, after passage of Prop 121, the income tax rate is further reduced to 4.4% for tax years beginning Jan. 1, 2022.

Tax collections are expected to decrease by $412.6 million in fiscal year 2023-24, which is a 2.4% reduction in general fund revenues.

Colorado Proposition FF

Prop FF raises taxes on people with incomes over $300,000 to create and fund the Healthy School Meals for All Program. Households with at least $300,000 in taxable income will be limited to $12,000 in state tax deductions for single filers and $16,000 for joint filers. State revenue is estimated to increase by $50.4 million in fiscal year 2022-23 and by $100.7 million in FY 2023-24. The program, with an estimated start-up cost of $212,289, will increase state spending between $71.4 million and $101.4 million in FY 2024-25 when it is fully in place. The proposition passed with 56.3% of voter support.

Massachusetts Question 1

In a year in which legislatures in at least 14 states passed measures to reduce income tax rates, Massachusetts approved a new 4% surcharge on individual taxpayers with incomes over $1 million. The constitutional amendment was referred to voters by the Legislature in 2021 and was approved with 52% of the vote. The measure is estimated to increase state tax collections by $2 billion. The revenues will be dedicated to education, road and bridge maintenance, and public transportation. Massachusetts joins New Jersey, New York and Washington, D.C., in having higher marginal rates for income over $1 million.

Cannabis Legalization

Maryland Question 4

By a nearly 30-point margin, Maryland voters approved the possession or use of cannabis for individuals 21 or older. The constitutional amendment was referred to...