How The 2022 Midterm Elections Could Affect Your Finances – Forbes Advisor


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As midterm elections draw near, voters in states across the country will face myriad issues that could impact their finances, ranging from tax changes to labor laws.

Some of these issues have been on the ballots before, like Washington D.C.’s proposed minimum wage hike for tipped employees. Voters favored it in 2018, but the city council ultimately nixed it. D.C. voters have another shot at pushing the proposal through on November 8.

New measures, such as Arizona’s Predatory Debt Collection Act, would cap annual interest rates on medical debt at 3%. If successful, it could present a model for other states considering similar moves.

Here are some issues that will most directly affect your finances at the state level, and what you need to know about voting this year.

State Guide to the 2022 Midterm Elections

Click on your state to see what personal finance-related issues are on the ballot.

Unions Are on the Ballot

The labor movement has been going strong during the pandemic as workers push for higher wages and better working conditions. Since the beginning of 2022, more than 300 strikes have been led by workers demanding safe working conditions, access to affordable healthcare and living wages.

This fall, voters in some states will decide what happens to unions in their states. While Illinois is voting on codifying union rights, Tennessee is voting on right-to-work laws—measures on the opposite end of the labor-issue spectrum.

Right-to-work laws give workers the choice to join a union in a unionized workplace, and it also gives them a choice of whether to pay dues if they join a union. While proponents of right-to-work laws argue they offer workers more freedom, critics say they weaken unions and workers’ ability to fight for better wages and benefits.

Illinois: Workers’ Rights Amendment

The only statewide ballot measure in Illinois is Amendment 1, known as the Workers’ Rights Amendment. This referendum would add Section 25 to the Bill of Rights Article of the Illinois Constitution, which would codify the fundamental right of workers to organize, collectively bargain and negotiate everything from wages to working conditions. If passed, Illinois would join New York, Hawaii, and Missouri in having state constitutional protections for unions.

This amendment would also prevent future laws from being made that would undermine worker rights.

Tennessee: Right-to-Work Amendment

Tennessee’s constitutional Amendment 1 would add a new section to the Tennessee Constitution, making it illegal for anyone or any organization to deny employment to someone based on their willingness to join a workplace union. Tennessee already has right-to-work laws, but this amendment would fortify the laws against pro-union groups or politicians in the future.

Wages And Pay

Amid stubborn inflation that continues to drive up the cost of everything from housing to gasoline, a couple of states and Washington, D.C. are pushing to help minimum wage workers  by placing minimum wage measures on the ballots.

Nevada: Minimum Wage Amendment

Nevada residents will vote on minimum wage on Election Day this November. Question 2 is a constitutional amendment that proposes to hike the minimum wage from $10.50 per hour ($9.50 per hour if your employer offers health insurance) to $12 per hour by July 1, 2024.

The measure would also:

  • Eliminate existing yearly inflation adjustments and replace them with the new minimum wage.
  • Give the state legislature the power to pass a law raising the minimum wage rate higher than the current constitutionally mandated minimum.
  • Remove the rule that allows employers to reduce hourly wages by $1 if they offer health benefits and replace it with a flat rate, regardless of health benefits.

Nebraska: Minimum Wage Increase Initiative

Nebraska is putting the minimum wage to voters via a state statute called Initiative 433, or the Minimum Wage Increase Initiative. If most voters approve, the minimum wage will be incrementally boosted from its current rate of $9 per hour to $15 an hour by 2026.

Passage of Initiative 443 means workers can expect the following wage hikes:

  • $9.00 per hour to $10.50 on January 1, 2023
  • $12.00 per hour on January 1, 2024
  • $13.50 on January 1, 2025
  • $15.00 per hour on January 1, 2026

The measure would also adjust the minimum wage every year using the cost of living as a guide.

Washington, D.C.: Tip Credit Elimination Act

Initiative 82 is a ballot measure that would raise the minimum wage for tipped employees to the prevailing minimum wage by 2027. As it stands, the district’s employers can pay tipped workers subminimum wage—or $5.35 an hour—as long as their tips make up the difference.

The current minimum wage in D.C. is $16.10. If a worker makes less than that in a combination of wages and tips, the employer has to cover the difference; but if the worker makes equal to or more than the hourly minimum wage, the employer isn’t obligated to pay more.

This isn’t the first time D.C. voters have faced this issue. In 2018, voters were in favor of a related proposal, but it was overturned by the city council. According to a recent poll of councilmembers by the Washington City Paper, it’s unlikely the current D.C. City Council will seek to overturn the vote if it’s passed.

Interest Rates

How much interest you pay on your debt can take a toll on your financial health. Arizona is the lone state looking at a law that would limit the amount of interest debt collectors can charge on medical bills each year. This measure could set a precedent for other states to follow suit.

Arizona: Predatory Debt Collection Act

Arizona Proposition 209 would reduce interest rates on medical debt for Arizona residents to a maximum of 3% annually, down from the current limit of 10%.

This proposition would also decrease the amount of disposable income available for wage garnishment to a maximum of 10% from the current 25% of weekly income; it would also give courts the power to reduce that amount to 5% for people facing extreme economic hardship.

Finally, this measure would raise the value of certain assets protected from creditors, such as homes, cars and bank accounts.

Taxes

Taxes are one of the most popular issues in this year’s midterms. A handful of states are proposing either reductions or increases in taxes for various reasons.

Arizona: Property Tax Exemptions Amendment

Arizona Proposition 130 is a constitutional amendment that would allow the state legislature to determine the amount and qualifications of property tax exemptions for certain residents, including people with permanent disabilities, disabled veterans, and property used for trade and agriculture.

It would also reinstate a property tax exemption for honorably discharged veterans, which was previously ruled unconstitutional.

California: Proposition 30

California Proposition 30 would raise taxes by 1.75% for people who earn over $2 million annually. The tax revenue would fund zero-emission vehicle programs, including installing electric charging stations in the Golden State, as well as put money into wildfire response efforts and fire prevention programs.

Colorado

Amendment E: Homestead Exemption Amendment

Colorado Amendment E would extend property tax breaks to the surviving spouses of U.S. service members who died during combat or veterans who died due to military-related injuries or illnesses.

Currently, this tax exemption is only available to seniors and disabled veterans. To be eligible, the property for which you claim the exemption must be your primary residence.

Proposition 121: State Income Tax Rate Reduction

Coloradoans are voting on an issue impacting their take-home pay this November 8. Proposition 121 would reduce the state income tax rate from 4.55% of a person’s income to 4.40%. For instance, if you earned $75,000, your income tax liability would go from about $3,400 to around $3,300.

Florida

Florida Amendment 1: Disregard Flood Resistance Improvements in Property Value Assessments

Floridians are battling rising sea levels and intensifying natural disasters, so many homeowners are fortifying their homes.

Florida Amendment 1 is a constitutional amendment that would protect Florida homeowners from paying higher taxes due to increased assessed values when they make changes to their homes that help protect them during floods.

For example, if Amendment 1 passes, a homeowner who installs foundation vents or changes the grade of their lawn to help reduce the impact of flooding wouldn’t be subject to higher taxes because of any increased value of their home.

Florida Amendment 3: Additional Homestead Property Tax Exemption for Certain Public Service Workers

This constitutional amendment would give teachers, police officers, military personnel, correctional officers, emergency medical workers, child welfare service workers and the Florida National Guard an additional $50,000 exemption on the assessed value of their property.

Florida’s existing rule includes a $25,000 property tax exemption for the first $50,000 of the assessed value of your residence. To qualify, the property must be your primary, permanent residence and you must have owned the property by January 1 of the tax year.

Georgia: Allow Residents to Seek Declaratory Relief from Certain Laws

Peach State voters will have a chance to vote on a constitutional amendment that would give local governments the authority to grant temporary tax breaks for properties damaged by natural disasters.

Amendment 2 would help Georgia homeowners whose property is damaged or destroyed by extending temporary tax breaks, giving them a financial cushion as they rebuild their homes.

Idaho: Income and Corporate Tax Changes and Education Funding Question

Idaho voters will weigh in on a non-binding advisory question that asks voters for their opinion on three issues that would support the passage of House Bill 1, which would have a meaningful impact on income tax.

The advisory question asks voters if they support the following:

  • Changing the income and corporate tax rates to one flat tax rate of 5.8%
  • Providing either a 10% tax rebate or $600 for joint filers and $300 for single filers–the greater of the two would be issued
  • Setting aside $410 million of sales tax revenue for the public school income fund and the in-demand careers fund.

Advisory questions won’t lead to any immediate changes but are a way for the state legislature to gauge voters’ opinions on certain issues.

Louisiana: Property Tax Exemptions for Certain Disabled Veterans and Spouses Measure

Louisiana’s Amendment 2 would exempt military veterans who are disabled from property taxes and add new exemptions for veterans with varying degrees of injuries. It’s a constitutional amendment that would provide several property tax exemptions for eligible Louisiana veterans.

  • Veterans with a service-related disability rating of at least 50% but less than 70% would get an extra $2,500 exemption after the first $7,500 homestead property tax exemption
  • Veterans with a service-related disability rating of at least 70% but less than 100% would get an extra $4,500 exemption after the first $7,500 homestead property tax exemption
  • Veterans that are entirely disabled or that are 100% unemployable are exempt from all property taxes

These benefits would extend to the surviving spouse of a deceased, disabled veteran regardless of whether the exemption was claimed on the property before the veteran’s death.

Massachusetts: Additional Tax on Income Over One Million Dollars

Massachusetts Question 1 is a constitutional amendment that would increase taxes on people who earn more than $1 million. Known as both the “fair share amendment”  and the “millionaires’ tax,” depending on what side of the vote you’re on, this amendment would add 4% more in state income tax (in addition to the flat-rate income tax of 5%) to people earning over $1 million annually, but only to the portion of income in excess of $1 million.

Revenues from these proposed tax hikes would go to education and transportation in the Bay State.

West Virginia: Authorize Tax Exemptions for Vehicles and Personal Property Used for Business Amendment

Amendment 2 would amend Article X of the West Virginia Constitution to give tax exemptions to tangible personal property used for business, such as heavy machinery, tools and inventory. =

It would also exempt personal property tax on motor vehicles from ad valorem property taxes. Ad valorem property taxes are taxes based on the value of the property.

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How to Prepare for the Midterm Elections

Election Day is November 8, so it’s that time to make sure you’re registered to vote, familiarize yourself with your ballot and find out where to vote.

Make Sure You’re Registered to Vote

First, make sure you’re registered to vote. States have varying voter registration deadlines, so check your state’s deadline if you haven’t yet registered. Arkansas, for instance, requires residents to register 30 days before Election Day, whereas Massachusetts only requires you to register 10 days prior to an election.

Review Your Voting Options and Make a Plan

You can check your voter registration status on the National Association of Secretaries of State website, in a section called “Can I Vote.”

Next, decide how you’re going to vote. Each state has its own voting laws, so check your state for the rules. Websites like USA.gov offer voter rules and information for each state.

Most states allow early in-person voting; only four states—Alabama, Connecticut, Mississippi and New Hampshire—don’t have early in-person voting options.

More than half the states and Washington, D.C., have “no-excuse” absentee voting, so voters cast an absentee (or mail-in) ballot, without offering a reason.

Eight states—California, Colorado, Hawaii, Nevada, Oregon, Utah, Vermont and Washington—offer mail-in voting. Voters in these states will automatically get a ballot by mail which must be postmarked by the individual state’s deadline.

Check Voting Deadlines

Voting deadlines differ by state, so be sure to check out the deadlines in your state. Keep in mind, voting deadlines may also differ by type of ballot. For instance, Minnesota’s deadline for receipt of absentee ballots is the close of polls on Election Day, and hand-delivered ballots must be received by 3 p.m. on Election Day.

Learn About Your Ballot

Familiarize yourself with the ballot in your city and state. The more prepared you are before you enter the voting booth, the more confident you will feel about your vote. You can find your sample ballots for state issues at USA.gov.



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