2025 Governors and Legislatures (Projected)
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Key Takeaways:

  • This year’s election results largely maintained the political status quo in the states. However, there are some key election updates that we think will have tax policy implications in the coming year.
  • Gubernatorial reelections in Kentucky and Mississippi could have tangible tax policy results. Because Kentucky incumbent Democrat Andy Beshear won reelection, we may see some of the legislature’s conservative proposals slightly tempered since Beshear will result in a weak check on their agenda. On the flip side, Mississippi incumbent Republican Tate Reeves reelection could see renewed political capital for his push to eliminate the personal income tax.
  • On the legislative side, Democrats gained full control of the legislature in Virginia, but they can’t override the Republican governor on their own – but they will have more leverage and it likely signals the death of the governor’s income tax reduction plans. In New Jersey, Democrats retained control of the legislature and have promised to push for property tax relief.
  • Finally, two key tax ballot measures in Colorado and Texas have major policy implications going forward — the protection of TABOR in Colorado and a wealth tax prohibition and property tax relief in Texas.


As we noted in our recent election analysis, this year’s election results largely maintained the state political status quo. Since there is always a specific tax and fiscal policy angle to any story, however, it is worth taking a closer look at the results to see what we can learn about how states might approach these issues in the coming legislative sessions. Here are some key election updates that we think will have tax policy implications in the coming year.  


Governors

Kentucky

Governor Andy Beshear (D) won reelection in Kentucky, and his retention of the governor's mansion will probably maintain the policymaking status quo for next session as Republicans will keep their veto-proof majorities in both chambers. If AG Cameron (R) had won it might have emboldened the GOP to pursue more aggressive versions of their preferred policies, but as it stands Governor Beshear is a relatively weak check on their agenda. 

Mississippi

Governor Tate Reeves (R) also won reelection for another term in office, though the 52%-47% vote margin was closer than might otherwise have been expected. A big question going forward is whether Governor Reeves resumes his push to eliminate the personal income tax. He was preparing for a legislative push earlier this year before his scandal allegations emerged. We will be watching to see if he uses the political capital from his win to renew those plans. 


Legislatures

Virginia 

Democrats in Virginia have gained full legislative control. Democrats flipped the Virginia House of Delegates and held their majority in the State Senate. Results show Democrats winning at least 51 seats in the lower chamber and 21 in the upper. These slim majorities will not allow Democrats to overpower Governor Glenn Youngkin (R), but they will allow for more leverage during next year's budget negotiations and likely signal the death of the governor's drive for income tax reductions. 

New Jersey

New Jersey remained in Democratic hands. Democrats have maintained their majority in the State Senate and widened their majority in the Assembly. Garden State Republicans always had long odds of flipping the state government, but they had hoped that the political conditions were right for an upset. They turned out to be incorrect and Democrats will maintain trifecta control of the agenda and have promised to push for property tax relief. 


Ballot Measures

Colorado 

Voters in Colorado protected the Taxpayer Bill of Rights (TABOR). Governor Jared Polis (D) and Democratic leaders spent a lot of time, money, and political capital on Proposition HH, but voters still rejected it with a clear majority (currently 60%-40%). While Colorado has been trending blue in recent years, TABOR evidently still has majority support. The defeat of Proposition HH could also bolster efforts to pass similar TABOR-like protections in other states.

Texas

Texas voters approved a wealth tax prohibition and property tax relief. Texans approved both Proposition 3 and Proposition 4 with clear majorities (currently 68%-32% and 83%-17%, respectively). These are not surprising results coming out of a Republican-controlled state, but it is interesting that property tax relief did significantly better than the wealth tax prohibition.