Twenty voters chosen to represent a cross section of the electorate voted 11-9 on Sunday to oppose Measure 92.
The Citizen Initiative Review panel heard arguments from both sides over several days.
It found that labeling foods that contain genetically modified ingredients would provide more information for consumers.
But the panelists say it would not require producers to disclose which ingredients are genetically engineered, nor would it require labels for meat and dairy products from animals fed genetically engineered feed.
Their findings will appear in the official voter's guide mailed to voters along with ballots in October.
State lawmakers sanctioned the citizen review process in 2011.