Voters in three states Tuesday approved ballot initiatives to expand Medicaid coverage while anti-tax measures prevailed in two Southeast states.
The measures were among dozens around the country that will impact budgets and credit quality.
Idaho, Nebraska and Utah said yes to the Medicaid expansion made available to states under the Affordable Care Act.
“Their decision is credit positive for the 33 states that had already moved to broaden their Medicaid programs,” Moody’s Investors Service wrote in a comment Wednesday. “As more states take advantage of increased federal Medicaid funding under the ACA to close gaps in medical coverage, support for the expanded coverage law grows more bipartisan, reducing the risk of federal efforts to undermine or repeal it.”
“The Affordable Care Act “continues to be a hot-button issue as the cost and availability of insurance continues to move in a negative direction away from the consumer,” Joseph Krist, a partner with Court Street Group Research LLC, wrote in a report. “This generated a level of voter interest and involvement, which led to successful placement of Medicaid ballot initiatives in four red states.”
The Idaho and Nebraska initiatives do not include funding mechanisms for the state's share of the costs. The Utah initiative provides for funding with a sales tax increase.
“Expansion generates significant additional federal funds for a state’s healthcare system, while also requiring some additional state funding,” Fitch Ratings wrote in a commentary before the election. “Medicaid expansion has proven to be a positive credit factor for healthcare providers in expansion states.”
Montana currently participates in Medicaid expansion. Voters in unofficial returns appear to have rejected a ballot measure that would raise tobacco taxes to fund the program and extend it beyond its current June 30 sunset date.
Voters in two triple-A rated Southeast states approved limits on increasing future taxes and fees despite analysts’ warnings that they could stifle fiscal flexibility during economic downturns.
In Florida, nearly 66% of voters passed constitutional amendment 5 requiring a supermajority vote by each chamber of the Legislature – instead of a simple majority - to authorize or raise any state tax or fee. The measure required 60% for passage.
In North Carolina, where a simple majority is required to amend the state constitution, 57.4% of voters enshrined an income tax cap in the constitution, lowering the maximum allowable state personal and corporate income tax rates to 7% from 10%.
It has no immediate budget impact, because current rates are lower than the new cap, but analysts have said that it would reduce the state’s flexibility.
Transportation measures met a mixed fate. In California, a Republican-led effort to repeal a recently enacted gas tax increase failed.
If Proposition 6 had succeeded, it could have halted thousands of transportation projects already underway in the state. SB 1, the gas tax increase state lawmakers approved in 2017, is expected to raise $5.4 billion annually for 10 years for transportation projects.
Missouri voters rejected a hike in the state’s gasoline tax to provide an infusion of new funding state Department of Transportation officials have warned is needed to ensure the safety of roads and roads.
Proposition D would have enacted a gradual 10 cent increase in the state's 17-cent-per-gallon tax. Republicans who control the legislature sent the measure to the ballot and it had the endorsement of Gov. Mike Parsons.
Oregon voters approved a ballot measure that removes restriction that required affordable housing projects funded by city and county bonds to be government owned
Colorado voters rejected a sales tax hike that would have backed $6 billion in bonds. They also rejected a competing transportation measure to authorize $3.5 billion of bonds for transportation without new revenue to fund it.
Connecticut voters handily approved a “lockbox” measure for transportation funds.
In Arizona, voters rejected expanding a school voucher program that redirects public tax dollars to private schools, home schools and other uses. The vote kills SB 1431 that was signed by Gov. Doug Ducey on April 6, 2017 but maintains the existing law on use of vouchers for some students.
Arizona voters also banned state sales taxes on personal and business services and rejected plans to require utilities to obtain 50% of their power from renewable sources by 2030. A measure to modify state pension funding also passed.
Nevada voters approved a renewable-power mandate.
In Arkansas, voters approved Issue 5, which increases the state’s minimum wage to $11 per hour by 2021, indirectly affecting state tax revenues.
Coloradans rejected Amendment 73, which would have created a graduated income tax and increased income taxes on incomes above $150,000 for education funding.
Oklahoma voters rejected State Question 800, which would have set aside 5% of the state's oil and gas revenue into the Oklahoma Vision Fund designed to protect the energy-dependent state from the wild swings in revenue in recent years. Oklahomans also rejected State Question 801, which would have allowed school districts to use their building funds that support bonds for operational purposes.
Washington state voters were asked to approve a carbon tax. It appeared to be on its way to defeat, according to early returns.
Michigan voters passed legislation to legalize marijuana for adult recreational use. The Michigan initiative sets a 10% excise tax projected to generate $129 million in tax revenue annually once the market matures. Commercially available sales of marijuana would begin in 2020.
In North Dakota a measure to legalize marijuana failed with voters overwhelmingly. Utah and Missouri voted for legalize medicinal marijuana.
In Indiana, voters approved an amendment to the state constitution requiring lawmakers to pass balanced budgets unless two-thirds of the members of both chambers vote to suspend the requirement.
Critics of the bill said that the constitution already largely bans the state from taking on debt, except in times of war, and that legislators from both parties have been producing balanced budgets for years.
Yvette Shields, Keeley Webster, Richard Williamson, Shelly Sigo and Nora Colomer contributed to this story.
