Voters are once again deciding whether to raise income tax rates to fund public education in Colorado — the third such ballot measure in the tax-averse state since 2011.
Amendment 73 will increase the state individual income tax rate for people who earn more than $150,000 a year and raise the corporate income tax rate to fund preschool through 12th grade.
Supporters of the proposal, which is expected to raise an additional $1.6 billion annually for schools, hope the political landscape and the state’s priorities have changed since voters rejected similar measures in 2011 and 2013 by 2-1 margins. They argue the state needs a sustainable source of income after funding was cut following the 2008 recession, forcing some school districts to resort to a four-day school week, limit teacher salaries, narrow course offerings and increase class sizes.
“It’s going to provide some definitely needed funds for schools all across the state,” said Lisa Weil with the group Great Education Colorado. “The way it does that is by dealing with what is right now an upside down tax structure” that benefits the wealthy.
Colorado currently spends about $9.7 billion a year on education, with $6.6 billion going to school districts through a formula in state law.
The measure will set a graduated individual income tax rate for people who earn more than $150,000, affecting about 8 percent of individual and joint filers. Those who earn $150,000 or less a year will not be affected.
“It’s a fair way to raise taxes, and the dollars are going to be spent on things that are high priorities,” Weil said. “This is going to be a game changer. This is going to change the lives of hundreds of thousands of kids.”
The measure will raise the current flat tax rate from 4.63 percent to 6 percent for corporations and will set new assessment rates for property taxes levied by school districts.
The non-residential assessment rate will be reduced from 29 percent to 24 percent, and the residential rate will be reduced from 7.2 percent to 7 percent. But critics say the new fixed residential rate amounts to a tax increase because the rate was projected to fall to 6.1 percent next year.
They also argue that the measure will be bad for small businesses and the economy.
Leading up to Tuesday’s vote, opponents painted the amendment as a $1.6 million blank check that doesn’t guarantee increased teacher salaries or improved academic performance.
Katie Kruger, co-chair of the “No on 73” campaign, said the measure “triggers a tax increase on thousands of small businesses, farms and dual-income families.”
A similar amendment that was soundly defeated in 2013 would have raised $950 million for K-12 education by also increasing the 4.63 flat tax rate. Under that measure, the first $75,000 of taxable income would have been taxed at 5 percent, and income above that would have been taxed at 5.9 percent.
In 2011, Colorado voters overwhelmingly rejected a proposition to raise $2.9 billion for schools by increasing the 4.63 flat tax rate for households and businesses to 5 percent for five years and raising the state’s sales tax from 2.9 percent to 3 percent.
But this year’s initiative comes after a series of nationwide protests that highlighted low teacher salaries and underfunded schools.