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State Government
Taxes and Fees. 7KLV\HDU¶VVWDWHEXGJHWVSHQGVRYHU ELOOLRQLQVWDWHIXQGV2YHU
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Jan 19 2022
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Taxes and Fees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urrent Requirements to Approve Taxes and Fees. 6WDWHODZUHTXLUHVLQFUHDVHVLQORFDO WD[HVWRUHFHLYHDSSURYDORIWKHORFDOJRYHUQLQJERG\²IRUH[DPSOHDFLW\FRXQFLORUFRXQW\ ERDUGRIVXSHUYLVRUV²DVZHOODVDSSURYDORIYRWHUVLQWKDWORFDOMXULVGLFWLRQ0RVWSURSRVHG WD[HVUHTXLUHDWZRWKLUGVYRWHRIWKHORFDOJRYHUQLQJERDUGEHIRUHEHLQJSUHVHQWHGWRWKHYRWHUV 6SHFLDOWD[HV
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Proposal
7KLVPHDVXUHDPHQGVWKH6WDWH&RQVWLWXWLRQWRFKDQJHWKHUXOHVIRUKRZWKHVWDWHDQGORFDO JRYHUQPHQWVFDQLPSRVHWD[HVIHHVDQGRWKHUFKDUJHV State and Local Government Taxes
Expands Definition of Tax. 7KHPHDVXUHDPHQGVWKH6WDWH&RQVWLWXWLRQWRH[SDQGWKH GHILQLWLRQRIWD[HVWRLQFOXGHVRPHFKDUJHVWKDWVWDWHDQGORFDOJRYHUQPHQWVFXUUHQWO\WUHDWDV IHHVDQGRWKHUFKDUJHV)RUH[DPSOHFHUWDLQFKDUJHVLPSRVHGIRUDEHQHILWRUSULYLOHJHJUDQWHGWR DSD\HUEXWQRWJUDQWHGWRWKRVHQRWFKDUJHGZRXOGQRORQJHUEHFRQVLGHUHGIHHV$VDUHVXOWWKH PHDVXUHFRXOGLQFUHDVHWKHQXPEHURIUHYHQXHSURSRVDOVVXEMHFWWRWKHKLJKHUVWDWHDQGORFDO YRWHUHTXLUHPHQWVIRUWD[HVGLVFXVVHGEHORZ
Requires Voter Approval for State Taxes.7KHPHDVXUHLQFUHDVHVWKHYRWHUHTXLUHPHQWVIRU LQFUHDVLQJVWDWHWD[HV6SHFLILFDOO\WKHPHDVXUHUHTXLUHVWKDWOHJLVODWLYHO\SURSRVHGWD[LQFUHDVHV UHFHLYHDSSURYDOE\WZRWKLUGVRIHDFKKRXVHandDPDMRULW\YRWHRIWKHVWDWHZLGHHOHFWRUDWH 9RWHUVZRXOGVWLOOEHDEOHWRLQFUHDVHWD[HVE\PDMRULW\YRWHRIWKHHOHFWRUDWHZLWKRXWOHJLVODWLYH DFWLRQKRZHYHU$Q\VWDWHWD[DSSURYHGEHWZHHQ-DQXDU\DQGWKHHIIHFWLYHGDWHRIWKLV PHDVXUHZRXOGEHQXOOLILHGXQOHVVLWIXOILOOVWKHUHTXLUHPHQWVRIWKHPHDVXUH Requirements for Approving Local Taxes:KHWKHUVRXJKWE\WKHORFDOJRYHUQLQJERG\RU WKHHOHFWRUDWHWKHPHDVXUHHVWDEOLVKHVWKHVDPHDSSURYDOUHTXLUHPHQWVIRULQFUHDVLQJORFDO +RQ5RE%RQWD -DQXDU\
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State and Local Government Fees
Requires the Legislature and Local Government Bodies to Impose State and Local Fees. )HHVZRXOGKDYHWREHLPSRVHGE\DPDMRULW\YRWHRIERWKKRXVHVRIWKH/HJLVODWXUHRUORFDO JRYHUQLQJERGLHV7KHPHDVXUHZRXOGUHVWULFWWKHDELOLW\RIVWDWHDQGORFDOJRYHUQPHQWVWR GHOHJDWHIHHFKDQJHVWRDGPLQLVWUDWLYHHQWLWLHV7KHH[WHQWRIWKHVHUHVWULFWLRQVZRXOGGHSHQGRQ IXWXUHFRXUWGHFLVLRQV$Q\IHHDSSURYHGEHWZHHQ-DQXDU\DQGWKHHIIHFWLYHGDWHRIWKLV PHDVXUHZRXOGEHQXOOLILHGXQOHVVLWIXOILOOVWKHUHTXLUHPHQWVRIWKHPHDVXUH Some New State and Local Fees Could Not Exceed Actual Costs. )RUVRPHFDWHJRULHVRI IHHVLIWKH/HJLVODWXUHRUDORFDOJRYHUQLQJERG\ZLVKHGWRLPSRVHDQHZIHHRUPDNHFKDQJHVWR DQH[LVWLQJIHHWKHPHDVXUHJHQHUDOO\ZRXOGUHTXLUHWKDWWKHFKDUJHEHERWKUHDVRQDEOHDQG UHIOHFWWKHDFWXDOFRVWVWRWKHVWDWHRUORFDOJRYHUQPHQWRISURYLGLQJWKHVHUYLFH7KHPHDVXUH DOVRVSHFLILHVWKDWDFWXDOFRVWVKRXOGQRWH[FHHG³WKHPLQLPXPDPRXQWQHFHVVDU\´,QPDQ\ FDVHVH[LVWLQJIHHVDOUHDG\UHIOHFWWKHJRYHUQPHQW¶VDFWXDOFRVWV,QRWKHUFDVHVVRPHIHHVZRXOG KDYHWRPRUHFORVHO\DSSUR[LPDWHWKHSD\HU¶VDFWXDOFRVWVLQRUGHUWRUHPDLQIHHV,IDIHHSD\HU FKDOOHQJHGWKHFKDUJHWKHVWDWHRUORFDOJRYHUQPHQWZRXOGQHHGWRSURYLGHFOHDUDQGFRQYLQFLQJ HYLGHQFHWKDWWKHIHHPHHWVWKLVWKUHVKROG6WDWHDQGORFDOJRYHUQPHQWVDOVRZRXOGEHDUWKH EXUGHQRISURYLGLQJFOHDUDQGFRQYLQFLQJHYLGHQFHWKDWWKHOHY\LVDIHH²ZKLFKLVQRWVXEMHFWWR DYRWHE\WKHHOHFWRUDWH²DQGQRWDWD[XQGHUWKHQHZGHILQLWLRQ Fiscal Effects
Lower State Tax and Fee Revenue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ower Local Government Tax and Fee Revenue. &RPSDUHGWRWKHVWDWHORFDOJRYHUQPHQWV JHQHUDOO\IDFHJUHDWHUUHVWULFWLRQVWRUDLVLQJUHYHQXH%\H[SDQGLQJWKHGHILQLWLRQRIWD[HVDQG UHVWULFWLQJDGPLQLVWUDWLYHFKDQJHVWRIHHVWKHPHDVXUHZRXOGPDNHLWVRPHZKDWKDUGHUIRUORFDO JRYHUQPHQWVWRUDLVHUHYHQXH&RQVHTXHQWO\IXWXUHORFDOWD[DQGIHHUHYHQXHFRXOGEHORZHU WKDQWKH\ZRXOGEHRWKHUZLVH7KHH[WHQWWRZKLFKUHYHQXHVZRXOGEHORZHULVXQNQRZQEXW +RQ5RE%RQWD -DQXDU\
IHHVFRXOGEHPRUHLPSDFWHG7KHDFWXDOLPSDFWRQORFDOJRYHUQPHQWUHYHQXHZRXOGGHSHQGRQ YDULRXVIDFWRUVLQFOXGLQJIXWXUHGHFLVLRQVE\WKHFRXUWVORFDOJRYHUQLQJERGLHVDQGYRWHUV Possible Increased State and Local Administrative Costs to Change Some Fee Levels. ,Q VRPHFDVHVVWDWHDQGORFDOGHSDUWPHQWVZRXOGQHHGWRGHYHORSPHWKRGVIRUVHWWLQJIHHVWRUHIOHFW DFWXDOFRVWVLIWKH/HJLVODWXUHRUORFDOJRYHUQLQJERGLHVZDQWHGWRFKDQJHWKRVHIHHVLQWKH IXWXUH(VWLPDWLQJDFWXDOFRVWVE\SURJUDPDQGIHHVRXUFHFRXOGLQYROYHVRPHDGGHGZRUNORDG IRUWKRVHVWDWHDQGORFDOGHSDUWPHQWVZKLFKOLNHO\ZRXOGEHVXSSRUWHGE\IHHUHYHQXH7KH H[WHQW RIWKHVHDGPLQLVWUDWLYHFRVWVZRXOGGHSHQGRQ
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