Referring a law to a public vote is interesting, not only because it tests whether a bill the Legislature passed really reflects the will of the voters, but also because a successful referendum petition has the immediate effect of suspending a law that otherwise would have taken effect on July 1. Even if voters approve the referred law (remember: a vote Yes on a referendum lets the law take effect; a vote No kills the law), it won’t take effect until the following July.
So citizens, when you sign the petition to refer Senate Bill 245, the plan to use sales tax dollars to lower homeowner property taxes, you aren’t just putting the law to a vote; you are stopping that law from taking effect for an entire year.
But that suspension won’t affect all of SB 245. When House State Affairs hoghoused the previously empty vehicle bill on March 2, they included a provision enacting the sales-tax transfer on July 1, 2027. Referred or not, SB 245 won’t start putting sales dollars toward reducing homeowner property taxes until next year, when the state sales tax is scheduled to jump back up to 4.5% from the current 4.2%.
Also important to note: the increase in sales tax is triggered by the sunset clause passed in 2023, not by SB 245. So referring SB 245 does not change the sales tax rate: petition or not, you’ll pay 4.2% sales tax on your groceries on July 1, 2026, and you’ll start paying 4.5% on your groceries come July 1, 2027.
The referendum petition would suspend one important provision of SB 245. It would pause the creation of the homeowner property tax reduction fund, and it would delay the transfer of $55,896,576 from the state’s reserves into that fund that SB 245 schedules for July 1 of this year for an entire year.
Referring SB 245 would thus delay draining the reserves and reducing homeowner property taxes for at least one year.