Fiscal impact statement
| Initiative law|
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local ballot measures
Fiscal impact statements can differ from state to state. Mainly, they differ as to who is responsible for preparing them. In some states, partisan officials, like the Secretary of State, are responsible. In others, nonpartisan legislative services offices are tasked with estimating fiscal impact. Lawsuits are often filed if supporters or opponents believe that the fiscal impact statement does not accurately reflect the likely costs of the measure.
States also differ as to where the statement is printed. Three typical locations are the petition, the ballot, and the voter information pamphlet. It is not uncommon for the statement to be printed in multiple places. In total, six states require the statement to be published on the petition form itself--Alaska, California, Maine, Missouri, Montana, and Utah.
- Single-subject rule
- Laws governing the initiative process
- Features of official voter guides, compared by state
- National Conference of State Legislatures-Fiscal Offices page
- National Conference of State Legislatures-Research Offices page
Single subject rules by state
Each petition includes a statement of the cost of reviewing and certifying the petition as well as "an estimate of the cost to the state of implementing the proposed law." This summary is prepared by the Alaska Lieutenant Governor.
See law: Alaska Statutes, Sec. 15.45.090 (4)
After certification, the Joint Legislative Budget Committee must prepare a fiscal analysis of the proposed measure. This analysis is presented at public hearings on the measure organized by the Secretary of State and included on an informational pamphlet produced by the state.
If the measure will have a fiscal impact, a fiscal estimate is drafted jointly by the Department of Finance and the Joint Legislative Budget Committee. This estimate is included along with the summary and circulating title.
- A list of recent measures cleared for circulation can be found here. (Includes fiscal estimates)
Prior to the election, the Director of Research for the Legislative Council of the General Assembly prepares a fiscal impact statement detailing any effect a measure will have on revenue, expenditures, taxes, and liabilities. For tax measures, Colorado law also directs the Director to include an estimate of the measure's impact on the average taxpayer. The statement is available to the public upon request and an abstract of the findings are included in the state's ballot information booklet.
Proposed measures are only analysed after sponsors collect 10% of the required signatures across the state and 10% in each of one-eighth of the state's Congressional districts. After preliminary signatures have been collected and proponents have submitted a ballot title and summary, the Secretary of State must submit the proposal to the Financial Impact Estimating Conference. The Conference, after allowing for public input, must draft a concise statement of the effect of the proposed measure on revenue and expenditures. The Conference must also draft a more detailed financial statement of the measure's predicted effects and the methods used in the analysis.
If a financial impact statement is successfully challenged in court, only the Conference is permitted to revise it. If Conference leadership fails to agree on a statement (or revisions to a statement), a notice will appear on the ballot stating, "The financial impact of this measure, if any, cannot be reasonably determined at this time."
The Office of Fiscal and Program Review prepares a fiscal impact statement for each ballot measure. The statement must summarize the impact of the measure on state funds (General Fund, Highway Fund, etc...). In addition, it must summarize the amount transferred from state to local governments. Each signature sheet must contain this summary.
In Mississippi, only ballot measures with a legislative alternative receive a fiscal review. The chief legislative budget officer creates a fiscal impact statement for each measure and its legislative alternative. These statements are included on the ballot and voters pamphlet for purposes of comparison.
Once the State Auditor has received the petition, he or she prepares a fiscal note and a fiscal note summary (less than 50 words). The Attorney General reviews the fiscal note and summary for fairness and legal content then either approves or rejects them. Once approved, the fiscal note summary is included on petitions.
- Note: On March 1, 2012, the Missouri Circuit Judge Jon Beetem ruled that the state's fiscal review process for ballot measures violates the Missouri Constitution. The state constitution requires that, "No duty shall be imposed on [the state auditor] by law which is not related to the supervising and auditing of the receipt and expenditure of public funds." Since evaluating proposed measures concerns potential impacts, Beetem ruled that the task falls outside the auditor's supervisory role. In addition, he ordered the statement to be removed from the ballot title in question. A similar ruling in 1996 found that the Joint Committee on Legislative Research could not evaluate proposed initiatives.
- On July 31, 2012, after multiple appeals, the Missouri Supreme Court ruled that the state auditor does have the constitutional right to prepare the financial summaries of proposed citizen-initiated measures.
- The ruling ended what was a tangled web in the state initiative process that began with a simple legal challenge to a potential 2012 tobacco tax initiative.
During the Attorney General's review, he or she must determine if the bill affects state revenues or expenditures. If so, the budget director must prepare a short fiscal note for inclusion on the petition and ballot.
The Fiscal Analysis Division analyzes the proposed measure to gauge its impact on state and local budgets. If this determination can be made, a fiscal note is drafted explaining this impact. Both the suggested revisions, the fiscal note, and the petition itself are then published on the Secretary of State's website.
The North Dakota Legislative Council prepares a fiscal analysis of each measure after certification and prior to the election. This information is made available to the public by the Secretary of State. According to a bill passed in 2013, if the fiscal impact of an initiated ballot measure is deemed "significant", it must be put on a general election ballot.
After the Secretary of State receives the approved proposal, he or she transfers the measure to the Office of Budget and Management (and/or Tax Commissioner if the measure involves a tax). The office (and/or commissioner) then estimates the fiscal impact of the measure. This estimate (or joint estimate) is ultimately posted on the Secretary of State's website 30 days prior to the election.
In Oregon, each measure that affects revenue, expenditure, or indebtedness by more than $100,000 receives an estimate of financial impact. This estimate is included in the voters' pamphlet and on the ballot. If necessary, a longer "statement of financial impact" can also be written explaining the estimate in the voters' pamphlet. The financial estimate committee is responsible for creating these estimates. The committee includes the Secretary of State, the State Treasurer, the Director of the Oregon Department of Administrative Services, the Director of the Department of Revenue, and a local representative (selected by the other members) with expertise in local government finance.
- An example of a financial estimate can be found here.
Once the Governor's Office of Planning and Budget has received the proposed measure, it must prepare an "unbiased, good faith estimate of the fiscal impact" of the measure. This estimate should also list any funding sources for the measure and the effect of the proposal on public indebtedness. It may also contain a caveat concerning the reliability of the estimate if the effects of the measure are difficult to predict. The estimate is included on the petition, in the voter information pamphlet, and on the ballot.
Once a measure has been certified for the ballot, the Office of Financial Management drafts a fiscal impact statement describing the "projected increase or decrease in revenues, costs, expenditures, or indebtedness" created by the measure. It is made available online or in the state's voter pamphlet.
If the Secretary of State believes that the measure will have a fiscal impact on the state, a fiscal impact statement is also prepared during the review process. The estimate does not consider local finances and may be modified if sponsors provide evidence convincing the Secretary that the estimate is in error. However, if in their final estimates the Secretary and sponsors remain more than $25,000 apart, both estimates must be reflected on the ballot as a range.
Voter guides with fiscal impact statements
States that have a fiscal impact statement within the official ballot measure voter guide include:
- Alaska (partial)
- Arizona (partial)
- North Dakota (partial)
- Rhode Island
- Alaska (partial)
- Arizona (partial)
- Rhode Island
- KMBC, "Court Strikes Mo. Auditor's Power On Initiatives," March 1, 2012
- Ballot Access News, "Missouri Statewide Initiative Process in Disarray, Following State Court Opinion," March 2, 2012
- Fiscal information in Rhode Island in 2012 is only given in relation to borrowing and bond financing.