How Various States Voted on Consumer Issues

In addition to the presidency, consumer issues were on the ballot this year across the country with referendums on matters like tax hikes and payday loans. 

Nebraska voters overwhelmingly supported Nebraska Initiative 428, with over 80 percent of voters approving the measure. The initiative established a cap on annual interest rates for payday loans at 36 percent. 

Before the measure was passed, payday lenders in Nebraska could charge up to $15 in fees for a $100 loan. These loans were capped at $500 and often need to be repaid within 34 days. 

Supporters of the initiative argue that this prevents borrowers from slipping into a “debt trap” or borrowing more money than they can payback. Opponents of the measure say that it will run lenders out of business, leading to unregulated borrowing. 

Initiative 428 limits the fee to $1.36.

Nebraska Financial Services Association told the Omaha World-Herald that it would be “considering all legal options this week,” opening the door to further legal challenges after attempts to keep the question off the ballot failed earlier this summer

Nebraskans for Responsible Lending, the organizers behind Initiative 428, collected 120,000 signatures to put the question on the ballot. 

Regulators in Washington encouraged larger banks, such as Bank of America and U.S. Bank, to offer smaller, short term loans to borrowers to discourage payday lending, especially amidst the coronavirus pandemic.

After failed efforts in late 2019, no significant actions on payday lending have taken place. President Donald Trump rolled back some protections on payday loan borrowers early in 2019 while Vice President Biden has avoided the subject on the campaign trail.

Nebraska joined several states that previously established payday caps, including South Dakota in 2016, Montana in 2010, and Colorado and New Hampshire in 2009. 

Meanwhile, smokers in Colorado and Oregon can expect the cost of cigarettes to rise sharply as anti-smoking activists expanded their efforts to include further excise tax hikes. 

In Colorado, Proposition EE passed with more than 68 percent of support, or 1.8 million votes. The measure will increase taxes on a pack of cigarettes from 84¢ to $2.67 per pack by 2027. Tobacco products will see a 22 percent tax increase on the manufacturer’s list price by the same year. Nicotine products will see a rise of 62 percent on the list price by the same year. 

Tax revenue will support public education efforts, including the state’s universal pre-K program and vaping cessation and education programs. Colorado teens are among the highest vape users in the country

Voters in Oregon approved a similar measure by 67 percent. Measure 108 increases cigarette taxes in the state by $2 per pack raising costs from $1.33 per pack to $3.33 per pack, bumps cigar tax cap to $1 per cigar, and issues a 65 percent tax on e-cigarettes and vaping products. Oregon previously did not tax e-cigarettes and vaping products. 

 The measure is expected to generate roughly $130 million and will support smoking prevention and cessation programs. This measure also places Oregon’s tobacco excise tax among the highest in the country and the most expensive outside the Northeast. 

Supporters of both initiatives, mostly anti-smoking groups, and teachers unions, argued that tobacco and nicotine companies should bear the cost of the harm caused by their products. Opponents argued that states should avoid passing tax increases amidst an ongoing pandemic. 

States also raised the issue of income tax, with various initiatives on ballots across the country.

Voters in Arizona approved Proposition 208 by 54 percent, which enacts a 3.5 percent income tax on top of the state’s existing flat income tax of 4.5 percent for earners making over $250,000 as single filers or $500,000 as joint filers. 

This measure’s revenue would support teacher and classroom support staff salaries, support services, career and technical education programs, and the state’s teachers academy. 

Supporters, most of whom are teachers unions, argue that this would further support the school system. Opponents, most notably the Arizona Chamber of Commerce and Industry, argue that this places the state among the highest income taxes in the country. 

In Illinois, voters rejected ”Illinois Allow for Graduated Income Tax Amendment,” which would have transitioned the state from a flat tax rate of 4.85 percent to a graduated income tax rate ranging from four to eight percent depending on income. The measure also would have increased property tax credit from five percent to six percent while creating a $100 per-child tax credit for joining filers earning less than $60,000 per year and singles earning less than $40,000 annually. The credit would decrease by $5 per child for every $2,000 of income over the threshold. 

The amendment received substantial support from Illinois Governor J.B. Pritzker, a Democrat, who projected that the amendment would bring in roughly $3.4 billion per year once fully enacted. 

55 percent of voters in Illinois voted “no” on the measure, according to the Wall Street Journal

In California, voters rejected a measure that would allow for commercial properties to get taxed at their fair market value rather than the value at the time when they were purchased. 

Proposition 15 would have required commercial and industrial properties, except those used for agricultural purposes, to pay taxes based on their market value instead of their purchase price. The measure would grant exceptions to business owners with $3 million or less in holdings and exempt tangible personal property and $500,000 in value for a non-small business’s tangible personal property. 

Residential properties in California would continue to be taxed based on purchase price.

According to the Los Angeles Times, independent estimates concluded that the measure would have generated an additional $11.5 billion in revenue by the time of full implementation in 2025. 

Supporters of the measure noted that additional revenue would go towards schools and local governments. At the same time, opponents argued that it would cause cost of living increases as businesses, especially commercial renters, pass costs to consumers. 

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