Voters Decide on Key Tax and Economic Development Ballot Measures

While the results of the recent federal elections have garnered major national attention, voters also cast ballots in record numbers on November 3 for more than 6,000 state legislators, 36 governors and hundreds of ballot measures. While results in some states are still being counted, measures impacting businesses were decided in Arkansas, California, Colorado, Florida, Michigan, North Carolina, Tennessee and Washington. 

Key development and permitting reforms fall short

Measures intended to encourage economic development and improve project approval times were rejected by voters in Arkansas and California. In Arkansas, voters narrowly rejected Issue 3, a measure that would have amended the constitution to allow the legislature to create programs, including Economic Development Districts. While in California, Proposition 45, which would have shortened California Environmental Quality Act (CEQA) review for essential projects such as housing, water systems, and clean energy, also failed, with 56.2% voting no.

Mixed takeaways on taxing the wealthiest residents

Two West Coast states considered taxes on their wealthiest residents, with different results. California voters rejected Proposition 40, also known as the “Billionaire Wealth Tax,” with 52.8% voting no. The measure would have imposed a one-time 5% tax on the net worth of California residents worth more than $1 billion. 

Meanwhile, in Washington, voters rejected IP26-645, which would have repealed the state’s millionaires’ tax. The tax, enacted through SB 6346 and signed in March 2026, imposes a 9.9% tax on household income above $1 million. Although the tax survived the repeal effort, it still faces a pending constitutional challenge that could overturn it before it takes effect in 2028.  

California keeps its simple-majority approval for local special taxes

California voters also rejected Proposition 43, which would have required two-thirds voter approval for voter-proposed local special taxes beginning in 2027, with 57.2% voting no. As a result, those taxes can continue to pass by a simple majority. 

Colorado replaces its flat income tax with graduated rates and rejects natural gas protections

Colorado voters faced two competing options for the future of the state’s income tax. Voters approved Amendment 87 with 51.6% support, replacing the state’s 4.4% flat income tax with graduated rates ranging from 3.7% to 8.4%. The amendment strikes the Taxpayer's Bill of Rights’ (TABOR) uniform-rate requirement and directs the new revenue to education, healthcare and childcare. Voters rejected the competing initiative, Proposition 136, which would have capped individual and corporate income tax rates at 4.4%.

Voters also rejected Amendment 82, which would have established a constitutional right to buy and sell natural gas for homes and businesses. The measure was a response to state efforts to shift building codes and utilities away from gas. It failed to reach the required 55% supermajority, receiving only 46.3% support.

States expand property tax relief 

Property tax relief received strong voter support in the Southeast. Florida voters approved Amendment 3, clearing the 60% threshold requirement with 62% support. The amendment raises the homestead exemption from non-school property taxes to $150,000 in 2027 and $250,000 in 2028, with a schedule set by law for eliminating those taxes on homesteads. For non-homestead properties, it caps annual assessment increases at 5%. A separate measure, Amendment 1, which would have raised the cap on the state’s budget stabilization fund from 10% to 25% of net general revenue, failed.  

In North Carolina, voters approved a constitutional amendment directing the General Assembly to pass laws limiting how much local governments’ property tax levies may increase. The amendment sets no specific cap but obligates lawmakers to enact one. And in Tennessee, voters approved Amendment 2, which prohibits the state legislature from enacting taxes on property. Tennessee does not currently have a state property tax, but this measure now constitutionally bars any future legislature from imposing one. The amendment also met Tennessee’s additional requirement that yes votes exceed half of all votes cast in the governor’s race. 

For more information, contact Jim Hill at jhill@icsc.com.