SOME ANSWERS ABOUT PROP CC
Voters get a guide to help them understand TABOR measure on ballot
Voters have a valuable guide on the TABOR measure that will be on the November ballot.
It sounds like a straightforward question.
Do Colorado voters want to give up possible future tax refunds to provide more money to K-12 education, higher education and transportation? Or do they want somewhere between $20 and $248 back in their pockets over the next couple of years?
But the debate over Proposition CC, which is on the November ballot, is littered with claims from both sides that require voters to know how the budget process works, what happened to the money from a 14-year-old ballot measure and how a state constitutional amendment called the Taxpayer’s Bill of Rights impacts governments large and small across Colorado.
This is your guide to sorting it all out.
How much money are we talking about?
The short answer is it depends on which team of economists voters believe, the ones who work for Gov. Jared Polis or the ones who work for lawmakers.
The governor’s office is projecting refunds totaling $1.7 billion in the next three fiscal years. Legislative economists, however, predict it will be closer to $542 million — a difference of more than $1 billion.
That means individual Colorado taxpayers could be getting as little as $20 total back on their state tax returns for 2020, 2021 and 2022, or they could receive as much $248.
It’s a relatively small amount individually, House Speaker KC Becker, D-boulder, said after the launch of the Yes on Proposition CC campaign. But it’s also a relatively small amount for education and transportation.
“When you look at the transportation and education (ballot) measures from last year, those totaled over $2 billion,” Becker said. “Obviously, this isn’t that.”
If you divide $1.7 billion equally among transportation, higher ed and K-12 over three years, it works out to about $188 million apiece per year. That’s about 2.6% of the
$7 billion annual education budget, and the Colorado Department of Transportation estimates its project backlog at $9 billion.
Becker described it as a “good first step” toward funding areas “that need the money most” rather than a solution to the state’s education and transportation funding needs. But opponents such as Jesse Mallory, who runs Colorado’s state chapter of Americans For Prosperity, say $248 might be more important to a family’s budget than the state’s.
“I don’t appreciate when elected officials say, ‘It’s only this amount,’ ” Mallory said. “You don’t know someone’s financial situation. Maybe it is a big amount. You don’t know what that could mean to somebody.”
Is it a tax hike?
Proposition CC starts with the words “without raising taxes,” and supporters argue that’s the correct language because the measure wouldn’t increase any statewide tax rate. Coloradans would owe the same amount on their 2020 taxes regardless of whether the measure passes.
“Prop CC allows the state to keep the money it collects to invest in roads and bridges and education with very strict accountability provisions,” Polis said during the Yes campaign’s launch.
Opponents, however, call it a tax increase because relinquishing this tax refund means the government gets to give back less of the money it collects, and the technical term for this is an increase in a person’s tax liability (the total amount of tax debt owed by an individual).
Basically, Coloradans won’t pay the government more, but they will potentially get less back if CC passes.
How would the money be spent?
At the heart of the attack against Proposition CC are two questions: First, how was the money from the ballot measure’s predecessor, Referendum C, spent? Second, what protections are built into this legislative referral so voters can rest assured that lawmakers aren’t moving this money around?
Colorado voters passed a fiveyear timeout from the TABOR cap rules in 2005. That measure, Ref C, promised that most of the money would be spent on K-12 education, colleges and health care.
That is where the money went, according to annual reports from Colorado Legislative Council staff. But Republicans argue that general fund dollars for these areas were cut during that time — effectively keeping state spending level for education and health care.
“They always say this is going to be in addition to, and more times than not it becomes in replace of,” Mallory said. “It kept the baseline.”
Republicans at the time called it the “Ref C shuffle,” and one example they pointed to came from the Joint Budget Committee’s appropriations report from fiscal year 2006 to 2007. Higher education took a $271 million general fund cut and received a $253 million Ref C appropriation.
“Things that the voters pass, legislatures have bent over backwards to keep sacrosanct as long as they possibly can,” said Sen. Kevin Priola, a Republican from Henderson and co-sponsor of the bill that created Proposition CC. “And I honestly think education and transportation are the two largest needs the state has going forward in the next decade.”
Voters could also reverse or change Proposition CC through the petition process if they thought the money was mismanaged.
One big difference between the two TABOR ballot measures is that Referendum C followed the economic slowdown of the early 2000s and was in effect during the onset of the Great Recession, when lawmakers were trying to hold off across-the-board cuts to programs.
“Therefore, in many instances the Referendum C money that has been spent was not new money for programs, rather it maintained programs and prevented them from undergoing cuts,” according to the October 2014 report from legislative council staff.
What difference would this make for education and transportation?
TABOR tax refunds aren’t guaranteed every year. They depend on how well the economy is doing, and how many people move to the state each year. The last time all Coloradans received a TABOR refund was 2015, according to legislative council staff.
That uncertainty makes it hard to predict the long-term contribution to education and transportation. What we do know is supporters of Proposition CC say the money isn’t for ongoing costs such as reducing class sizes or raising teachers’ salaries, even though class sizes and teachers’ pay are cited by education advocates as reasons the state has trouble recruiting and retaining educators.
Lisa Weil, the executive director of Great Education Colorado, told supporters at the campaign launch that the money would be spent on things such as bonuses to attract and retain teachers, books and classroom technology.
Transportation funding is more straightforward because projects such as fixing a pothole or repaving a road are one-time expenditures. But there is a limit on how much can be spent for highway purposes or related capital improvements such as park-and-rides. It’s 85%.
Becker, Polis and other Prop CC supporters have been clear from the start that the measure wouldn’t bring in enough money to fund education the way they think Colorado should or to knock out CDOT’S entire project backlog. But after years of asking voters — so far in vain — for a dedicated funding source for both transportation and education, they decided it was time to ask a different question.