3 States Bitterly Battle On Fiscal Ballot Items

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Initiatives calling for major tax cuts and future tax and spending limits in Utah, Colorado, and South Dakota would have a devastating impact on public schools if they are passed by voters next week, educators and opponents of the measures say.

They are among the most contentious of 50 education-related proposals nationwide whose fate will be decided by voters in 30 states on Nov. 8. (See related stories and chart on this page and following page.)

In Georgia, for example, voters are being asked to change the office of state school superintendent from an elected to an appointed post. Nebraskans and Hawaiians will decide whether to grant some 17-year-olds the right to vote, and voters in Idaho, Indiana, Kentucky, and Minnesota will decide whether to allow state lotteries.

Battle in Utah

One of the nation's fiercest ballot-proposal battles is being waged in Utah, where a trio of anti-tax measures has overshadowed the race for governor. Support for the initiatives was strong two months ago, but recent polls show that all three are now opposed by at least half of all voters.

Initiative A would limit property taxes to 0.75 percent of the fair market value of homes and to 1 percent of the value of all other land. It also would limit state spending and the amount of revenue that local governments could collect, and would require voter approval for all local nonproperty taxes.

Initiative B would roll back the state's tax rates on income, sales, gasoline, and cigarettes to their 1986 levels. The third measure, Initiative C, would provide income-tax credits to the parents of private-school students equal to 50 percent of state per-pupil spending for those in grades K-6 and 60 percent for those in grades 7-12.

The anti-tax movement was sparked by last year's record $166-million tax increase for schools. Gov. Norman H. Bangerter, who is expected to be turned out by voters next week, had backed the hike, saying it was needed to cover the cost of growing enrollment at a time when Utah's oil and mining revenues are declining.

The tax increases resulted in a $110-million budget surplus this year. Governor Bangerter persuaded lawmakers to rebate about $80 million to taxpayers, but that move apparently did little to placate voters.

"There is a growing suspicion that those tax rates are going to continue to generate surpluses," says Jack A. Olson, president of the Utah Taxpayers Association, one of two major groups supporting the initiatives. "The people are madder than hell because the majority did not agree those tax increases were necessary."

The initiatives are needed to send a message to legislators that Utah is losing its image among businesses as a tax-friendly state, adds Glen Parker Davis of the Tax Limitation Coalition. "If we don't take care of the tax base here in Utah, our tax burdens will multiply."

The initiatives are also backed by Mills Crenshaw, the controversial host of a Salt Lake City radio talk-show who urges their approval repeatedly during his daily three-hour program.

Both Governor Bangerter and Ted L. Wilson, the Democratic frontrunner in the gubernatorial race, oppose the measures. Merrill A. Cook, an independent candidate whose campaign is based on suppport for the initiatives, is running third.

An analysis by the state's office of legislative research found that the passage of Initiative A could reduce school-district and local-government revenues by up to $254 million. Initiative B would cut state revenues by $145.5 million, and Initiative C would shift $3.5 million in state funds from public schools to the families of the state's 5,000 private-school students.

"In a state of this size, that is a very big hit," said Cheryl May, of Taxpayers for Utah, the group formed by former Gov. Scott M. Matheson to oppose the initiatives.

"We have one of the largest class sizes in the nation, but the lowest expenditures per pupil," adds Darlene Gubler, president of the Utah pta "We have nowhere to go. We have a bare-bones education system right now."

In addition to launching a television-advertising campaign last week, the initiatives' opponents also sought to shore up their support among educators following the release of a poll showing that 40 percent of all teachers support the measures.

In several districts, the Utah Education Association has distributed flyers printed on half sheets of pink paper to teachers to symbolize the "pink slips" they could receive if the initiatives are approved.

In a related development, two civil-liberties groups have announced that they will file suit to block the implementation of the tax-credit initiative if it wins approval.

Spokesmen for the American Civil Liberties Union and Americans United for Separation of Church and State say the proposed law would violate the First Amendment because a disproportionate amount of the credits would be used to subsidize church-affiliated schools.

"Effectively, it's the same as the state collecting tax dollars and giving that money to parochial schools," said Robyn E. Blumner, executive director of the aclu of Utah.

Supporters counter that the ini4tiative would pass constitutional muster and would have the added benefit of saving the state money.

"If 13 percent of Utah's students went into private education, it would save the state $30 million," notes Mr. Davis of the Tax Limitation Coalition. Currently, about 1 percent of Utah students attend private schools.

New Tactics in Colorado

In Colorado, opponents of a tax-limitation initiative say they have given up their fight to block the measure in court in order to concentrate on getting their message across to the voters.

Amendment 6, the proposed "taxpayers' bill of rights," would reduce state income taxes to 90 percent of their 1987 levels; set property taxes at 1 percent of market value; and require voter approval for all future tax increases. Coloradans rejected a similar proposal two years ago.

Support for the measure has slipped recently but remains strong. An Oct. 24 poll by The Denver Post showed 51 percent of voters in favor of the measure and 37 percent opposed, compared with 60 percent in favor and 29 percent opposed on Oct. 6.

Opponents of the measure recently dropped a suit filed in state court that had sought to have a majority of the signatures on petititons to place the measure on the ballot declared invalid.

"We could not be certain we could keep [the initiative] off the ballot until the day before the election," exel10lplains Patrick C. Boyle of the Colorado Association of Commerce and Industry, one of several groups in the coalition that is battling the measure. "We feared it would pass, so we abandoned our legal action and started concentrating on a campaign."

Opponents of the initiative include Gov. Roy Romer, the state board of education, and most of Colorado's major education groups.

The initiative's chief supporter is Douglas Bruce, a Colorado Springs real-estate investor and a former Californian who worked on the successful 1978 campaign for Proposition 13, that state's landmark tax-rollback measure.

"This is not Proposition 13 junior," Mr. Bruce says of Amendment 6. "It takes the best features of tax measures all over the country. The heart of it is voter approval before raising taxes."

Opponents have estimated that the state's school districts could lose as much as $115 million in tax revenue next year and $230 million in 1990 if the measure is approved.

The Jefferson County district in suburban Denver, the state's largest with 75,000 students, might have to close for as many as 40 days should the measure pass, according to John B. Peper, the superintendent.

"Parents, faculty, and students are alarmed," Mr. Peper said. "Some believe that the consequences could never occur. They are astonished that an amendment like that would be on the ballot. When parents hear about it, many are angry."

Mr. Bruce, however, scoffs at such dire predictions.

"They're going around scaring schoolchildren, telling them they won't graduate if this passes," he says.

'Indirect' Tax Reform

In South Dakota, backers of a measure that would roll back property-tax rates are arguing that its approval would have the "indirect" benefit of forcing lawmakers to tackle the politically sensitive issue of creating a state income tax. Observers say voter sentiment on the measure appears equally divided.

Under Constitutional Amendment C, taxes on farms would be set at 1 percent of their 1984 values, and the tax on all other property would be set at 2.5 percent of its value that year. In addition, future tax increases would be limited to 2 percent annually.

A nearly identical amendment was rejected in 1980. That measure was placed on the ballot two years after lawmakers failed by one vote to pass an income tax. Most legislators who voted for the new tax were turned out of office in 1979.

Amendment C is being supported by the South Dakota Farmers Union and the state stockgrowers' association. They argue that the loss of revenue it would cause--estimated at $75 million annually for school districts--would force the legislature to reconsider an income tax.

"What the proponents have sold is a certainty of loss of revenue and an uncertainty of how to replace it," says George Bauder, president of the South Dakota Education Association, which opposes the amendment.

"There is a serious need for tax reform, but everyone knows darn well a direct effort to institute an income tax here would never pass," he adds.

Gov. George S. Mickelson, a majority of state legislators, and most education groups oppose the amendment.

Staff Writer Kirsten Goldberg contributed to this report.

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