As far as state tax policy is concerned, some things seem obvious from last week's elections.
First, state governments became more conservative. Republicans won the governorships in Massachusetts, Illinois, and Maryland -- the bluest of blue states. And except in Pennsylvania, the GOP defended all of its seats. More importantly, 10 legislative chambers flipped from Democratic to Republican control. The Republicans now control more state legislatures than any time since the Herbert Hoover administration. Neither the new GOP governors nor most of the new GOP legislators are right-wing fanatics. Insiders who follow state government are saying that the new GOP is likely to get a lot of things done even in blue states. Still, don't expect a lot of tax-raising in the coming years.
Second, in states where taxes were central to the election, the antitaxers won most of the time. Taxes mattered more in Kansas than anywhere else. Gov. Sam Brownback (R) won there comfortably. The tax cuts of Republican Govs. Rick Snyder in Michigan, Paul LePage in Maine, and Scott Walker in Wisconsin were the focus of opponents' campaigns, and those governors survived as well. The GOP challengers in Illinois, Maryland, and Massachusetts promised to either cut taxes or never raise them. They won. The message was clear: Tax cuts sell politically. One need not be Nate Silver to predict that state political leaders seeking to reduce tax burdens will be emboldened by this election.
Third, given a choice, people opted for tax limits on the ballot. Tennessee and Georgia voters chose to limit their states' ability to impose income taxes. Nevada voters overwhelmingly rejected the margins tax. Massachusetts citizens repealed the inflation adjustment on the gas tax. But there was one big exception: Illinois voters OK'd an advisory measure to increase income taxes.
Fourth, people like legalizing pot and are willing to tax its use. Citizens in Alaska, Oregon, and the District of Columbia legalized -- or in the district's case, drastically decriminalized -- marijuana. Voters indicated a willingness to tax those who will spend their extra money getting high. Florida voters rejected medical marijuana, but only because proponents didn't get the 60 percent victory they needed to change the state constitution. The pot victories were more about personal freedom than tax policy, although there are interests that are no doubt salivating over the prospect of more public money.
My liberal friends point to Connecticut Democratic Gov. Dan Malloy's victory as proof that all was not lost. Four very red states (Arkansas, Alaska, Nebraska, and South Dakota) voted to increase the minimum wage, and voters in Massachusetts, who voted for a Republican governor, approved a measure mandating that employers provide paid sick leave.
But whatever your political leanings, it is hard to argue against the significance of the state GOP victories. In the coming year, there will be many more efforts to reduce tax burdens. In the face of what appears to be public distrust of government, liberals will have to do a much better job connecting the value of public services to those taxes necessary to pay for them.
One last election thought: Citizens in Berkeley, California, overwhelmingly approved the soda tax. I'm glad I don't live there.
This is an excerpt of an article that will appear in State Tax Notes on November 17, 2014.