Proposition 101 – Motor Vehicle, Income, and Telecommunications Taxes and Fees

Proposition 101 would eliminate most telecommunications fees and vehicle rental and lease fees, and drastically reduce the state income tax rate, vehicle ownership taxes, and vehicle registration fees. Taxpayers would notice a reduction in taxes while loss of government revenue is expected to be $1.4 billion for the first year and $2.9 billion (current dollars) at final implementation.

Unlike most of the other changes in Proposition 101 and Amendments 60 and 61, the elimination of rental and lease fees would take effect immediately. The CO constitution allocates vehicle fees for road safety, construction and maintenance.

Since CO must balance its budget every year, legislators would have to make some painful decisions about closing community colleges, allowing roads to fall into disrepair, forgoing federal matching dollars for programs and much more. At the local level, scenarios include overcrowded schools, closing libraries and reducing fire protection services. The one saving grace of this ballot issue is that, since it is a proposition, the state legislature could vote to override its provisions.

This initiative seems to be a response to the state legislature’s increasing fees rather than asking voters for a tax increase.

Colorado ballot issues are supposedly limited to a single subject, but this proposition seems to have bypassed that restriction.

Recommendation: NO

This proposition would cause major cuts in state and local spending. So what cuts would the proponents of this proposition like to see? Their website says that state spending is too high, but I couldn’t find any specific recommended spending cuts.

Let’s not bankrupt Colorado’s economy.


Website for the Yes side (CO Tax Reforms)
http://cotaxreform.com/

Website for the No side (Coloradans for Responsible Reform)
http://www.donthurtcolorado.com/


Approved Ballot Language

Proposition 101 (STATUTORY)

Shall there be an amendment to the Colorado Revised Statutes concerning limits on government charges, and, in connection therewith, reducing vehicle ownership taxes over four years to nominal amounts; ending taxes on vehicle rentals and leases; phasing in over four years a $10,000 vehicle sale price tax exemption; setting total yearly registration, license, and title charges at $10 per vehicle; repealing other specific vehicle charges; lowering the state income tax rate to 4.5% and phasing in a further reduction in the rate to 3.5%; ending state and local taxes and charges, except 911 charges, on telecommunication service customer accounts; and stating that, with certain specified exceptions, any added charges on vehicles and telecommunication service customer accounts shall be tax increases?

Yes _____ No _____


Full text of Proposition 101
Colorado Revised Statutes, Title 39, Article 25
Reducing government charges
(Replaces the previously repealed “Gift Tax” section)
http://www.sos.state.co.us/pubs/elections/Initiatives/filings/09-10/Original10-0910.pdf