Not So Special Elections (Aaron Newell Commentary)

by Aaron Newell  on Monday, Mar. 11, 2019 12:00 am   3 min read

A generation ago Arkansans paid a sales tax of just 3 percent on the goods they purchased. Today, the state average is more than triple that. A few cities are over 12 percent. What happened?

Part of the answer is that in 1981, the General Assembly gave local governments the option to increase their sales tax rates. Cities and counties across the state took advantage of this new power. Some imposed multiple new taxes. The Legislature has also raised the general sales tax multiple times since then. Arkansans now pay on average 9.43 percent in sales taxes, the third-highest rate in the country. For a “conservative state” with citizens who generally oppose raising taxes, this outcome might seem strange.

A major reason for the change is the use of special elections. These are held at a different time than a primary or general election, often just addressing one issue. How common are these elections? Research from the Arkansas Center for Research in Economics by Jeremy Horpedahl, an assistant professor of economics at the University of Central Arkansas, and UCA Schedler Honors College graduate Alexandria Tatem shows 967 sales tax votes have been held since 1981 and 83 percent weren’t on a primary or general election ballot.

Why does this matter? Because special elections often have extremely low voter turnout. When sales tax votes are held at the same time as a general election, voter turnout is higher — about 44 percent on average. When elections are held at “special” times, voter turnout averages less than 19 percent.

The pass rate for sales tax increases is 76 percent in special elections but only 46 percent in general elections and 61 percent in primary elections.

One argument for special elections is that they are needed to address time-sensitive problems. A local jail may be overcrowded and proponents argue that a year is too long to wait to vote on a sales tax increase to fund the construction of a new jail. Other times the vote is for a permanent increase, a renewal of previous increases or general economic improvement. Many of these could have waited, and cities and counties can and should be prudent about upcoming expenses.

Special elections, on average, are held only 145 days away from either a general or primary election. Jails don’t go from empty to full in a year, let alone 145 days. Road wear is also a regular, predictable expense. Of the 900 special elections since 1981, 60 were held within one month and 118 were held within two months of either a general or primary election.

You might think that just constraining counties to holding special elections at a time familiar to voters — like a Tuesday in November — could be enough to slow down the increases. Unfortunately, holding special elections in May or November in years without a general or primary election doesn’t have much impact on voter turnout.

These special elections have roughly the same voter turnout as all other special elections. Out of the 900 special elections, 140 were held in May or November in off years and the average turnout for these elections is the same as all special elections (19 percent). The pass rate was lower (68 percent instead of 76 percent) but still higher than general or primary elections.

One example close to my home shows the low voter turnout issue with special elections: the 2017 special election in Conway that increased the city sales tax for road improvements. City officials stated that the roads were already in such poor condition that the city could not wait six months for the next primary election or 12 months for the next general election. Only 4 percent of the voting-age population voted in favor of the tax increase, but it passed, because voter turnout was only 7 percent.

In 2017, the Arkansas Legislature nearly passed a bill limiting the timing of special elections to mostly be held during primary or general elections. A similar bill has been proposed during the 2019 session. Legislators worried about Arkansas tax rates should understand that special elections have contributed to Arkansas having the third-highest sales tax rate in the country.

Our state motto is Regnat Populus, which means “the people rule.” But do “the people” of Arkansas want taxes to be continually increased by special elections with 7 percent voter turnout and 4 percent of voters approving?


Aaron Newell is a research and program assistant at the Arkansas Center for Research in Economics at the University of Central Arkansas. The views expressed are the author’s and do not necessarily reflect those of UCA. Email him at ANewell2@UCA.edu.

 

 

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