This article, published by the BBC in 2002, reviews the results of Council Tax referendums. Not everyone wanted to pay less tax: in 1999 Milton Keynes voted to increase tax but other majorities chose the least expensive option. In subsequent years the idea of asking voters has been abandoned possibly due to the low turnouts and high admin costs. Croydon Council spent £150k on a referendum on two issues but to put that in perspective it costs about £60 million a year to run the House of Lords.
If Interactive Democracy were in place, utilising secure web sites, the cost of each referendum would be very small indeed. I wonder if ease of access would also boost voter involvement.