Proposition 103 – 5-Year Tax Increase for Public Education

Prop 103 is a citizens’ initiative spearheaded by Rollie Heath, a state senator from Boulder. It proposes temporarily increasing the state income tax rate from 4.63% to 5% and the state sales and use tax from 2.9% to 3% for five years. Supporters point out that Prop 103 would restore tax rates to the levels in the late 1990s. The state would have to fund public education from preschool through college for the next five years using level of the 2011-12 school year plus the additional revenue from these tax increases.

Colorado is having a tough time balancing its books. The Colorado Fiscal Policy Institute bandied about some progressive tax proposals for consideration for this year’s ballot. They would have brought in more revenue than Prop 103, but the general feeling is that voters don’t have much of a stomach for a tax increase and that there will be plenty of opposition from organized groups. Colorado is the only state in the nation with a tax increase on its 2011 statewide ballot. Probably not coincidentally, Colorado is also the only state with all the strict requirements of TABOR.

Spending for education currently takes up half of the state’s general fund. The state is limited in how much it can cut some items, such as prisons and Medicare. Higher education in Colorado is not protected and has been hit particularly hard. Amendment 23, passed by the voters in 2000 was designed to ensure that K-12 education funding grew at the rate of inflation with an additional 1% for the first 10 years. For the state’s 2009-10 fiscal year the legislature redefined “base per pupil funding” so even Amendment 23 didn’t protect K-12 education.

This ballot measure would help some districts more than others. Boulder Valley School District voters have been generous with their dollars so BVSD doesn’t need the money as much as many other districts. (See the 2010 BVSD ballot issue 3A.) Proponents estimate that Prop 103 would restore $532 per student in BVSD versus $1,167 per student in Silverton School District.

Boulder would like to see a big, temporary increase in the University of Colorado’s funding if Prop 103 passes, but Prop 103 doesn’t specify how the new revenue would be divided among the various recipients.

A side note – Meanwhile, the state has been sued in Lobato v. State of Colorado. Plaintiffs claim that the system of education in CO is not “thorough and uniform” and therefore violates the state constitution. The case has been heard, and interested parties are awaiting the judge’s ruling.

Recommendation: yes

Education is an critical part of any successful nation and democracy. Prop 103 will not solve education problems in Colorado. Its supporters acknowledge that the proposal is only a temporary fix. The plan is to work hard toward a longer term fix to the state’s budget situation during the 5-year temporary tax increase. Otherwise we could see fights in Colorado similar to those that we are seeing nationally over the continuation of the Bush tax cuts.

Whether or not Prop 103 passes, the state needs to work on a long-term fix to its budget woes. Meanwhile, Prop 103 would help fund education in a state that is at or near the bottom of the nation in education funding.


Website for the Yes side (Support Schools for a Bright Colorado)
http://brightcolorado.com/

Websites for the No side
(Too Taxing for Colorado)
http://www.tootaxing.org/
(Save Colorado Jobs)
http://savecoloradojobs.org/


Proposition 103 (STATUTORY) (Approved Ballot Language)

SHALL STATE TAXES BE INCREASED $536.1 MILLION ANNUALLY IN THE FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS ARE RAISED ANNUALLY THEREAFTER BY AMENDMENTS TO THE COLORADO REVISED STATUTES CONCERNING A TEMPORARY INCREASE IN CERTAIN STATE TAXES FOR ADDITIONAL PUBLIC EDUCATION FUNDING, AND, IN CONNECTION THEREWITH, INCREASING THE RATE OF THE STATE INCOME TAX IMPOSED ON ALL TAXPAYERS FROM 4.63% TO 5% FOR THE 2012 THROUGH 2016 INCOME TAX YEARS; INCREASING THE RATE OF THE STATE SALES AND USE TAX FROM 2.9% TO 3% FOR A PERIOD OF FIVE YEARS COMMENCING ON JANUARY 1, 2012; REQUIRING THAT THE ADDITIONAL REVENUES RESULTING FROM THESE INCREASED TAX RATES BE SPENT ONLY TO FUND PUBLIC EDUCATION FROM PRESCHOOL THROUGH TWELFTH GRADE AND PUBLIC POSTSECONDARY EDUCATION; SPECIFYING THAT THE APPROPRIATION OF THE ADDITIONAL TAX REVENUES BE IN ADDITION TO AND NOT SUBSTITUTED FOR MONEYS OTHERWISE APPROPRIATED FOR PUBLIC EDUCATION FROM PRESCHOOL THROUGH TWELFTH GRADE AND PUBLIC POSTSECONDARY EDUCATION FOR THE 2011‐12 FISCAL YEAR; AND ALLOWING THE ADDITIONAL TAX REVENUES TO BE COLLECTED, KEPT, AND SPENT NOTWITHSTANDING ANY LIMITATIONS PROVIDED BY LAW?
‐ Yes
‐ No

Amendment 50 Meets State’s Budget Woes -- Hickenlooper Replaces Gaming Commission

In most states casino tax rates are set by the legislature, but in Colorado the 5 members of the Colorado Limited Gaming Control Commission (or the voters of Colorado) approve tax rate changes. For instance, in May of 2008 the commission approved a targeted tax cut for casinos with revenues of less than 8 million dollars.

This year at the May 19 meeting the 4 attending commissioners approved a controversial across-the-board 5% cut in the casino tax rate to provide financial relief to the industry, despite some of the bigger casinos bringing in large profits. Casino tax rates are based on net revenue (officially called Adjusted Gross Proceeds equal to bets minus payouts); higher revenue determines a higher tax rates. On July 1 the top tax rate changed from 20% to 19%. The other tax rates went from 0.25% to 0.2375% (under 2 million dollars in AGP), 2% to 1.9% ($2M to $5M), 9% to 8.55% ($5M to $8M), 11% to 10.45% ($8M to $10M), and 16% to 15.2% ($10M to $13M).

On June 6 the 5 members of the commission unanimously rejected requests from the Colorado Community College System and History Colorado to reverse the impending tax cut. (Prior to Amendment 50 25% of the gaming tax revenue went to historic preservation. Passage of Amendment 50 in 2008 empowered local voters in gaming communities to increase the bet limit from $5 to $100 with 78% of the resulting increased tax revenue going to community colleges.)

Governor John Hickenlooper was unhappy with the casino tax rate cut, especially given the state's current budget woes. On July 6 he reminded us that the commission members serve “at the pleasure of the governor” with his decision to replace the entire commission. Hickenlooper was already due to replace two of the members whose terms expired in early July.

The rules for reversing the casino tax rate cut are unclear. It may be that the new commission can just vote to reverse it. It is clear, however, that Amendment 50 prohibits the commission from setting any tax rate ABOVE the previous level (in effect since July 1, 2008). A statewide vote of the electorate is required to increase casino tax rates above the July 1, 2008 level.

Boulder Valley School District 3A -- Mill Levy

Colorado attempts to provide an equitable amount of base funding for each student. Property tax mill levies fund a large portion of school districts. To achieve equity, the state supplements districts having low property values with more state funding. However, the state, by allowing districts to ask voters for extra money through a mill levy override, reverses some of its equalization efforts.

Until this year districts could ask for a specific dollar amount equivalent to up to 20% of the base funding, called total program funding. With inflation the requested amount, which originally might have equaled 20%, over time becomes a smaller percentage of the total program funding. The school district can then ask for another override for the difference. Currently, BVSD has 3 overrides in effect equaling about 16% of total program funding.

This year the legislature changed the law to allow districts to ask for up to 25% of total program funding. Unlike in the past, the district no longer needs to ask for a specific dollar amount. If the voters approve this measure, then each year BVSD can calculate 25% of its total program funding and set the mill levy override accordingly. If less funding is deemed necessary, BVSD is not required to impose the full override amount, but schools always want more money for education so asking for less money seems unlikely. The 2011 property tax on a $100,000 residential property would increase by about $37.

Passing this override means that BVSD voters would never vote on another override in the future (unless the state legislature increases the ceiling again or Amendment 60 passes).

Next school year's step increases (which correlate to experience) and cost-of-living increases for BVSD teachers are dependent upon the passage of this ballot issue (Camera, Aug 25). BVSD also hopes to fund more early childhood education programs to close the achievement gap. The new revenue goes into BVSD's general fund.

Resolution No. 10-25 to refer Ballot Issue 3A passed unanimously at the Aug 24, 2010 BVSD Board of Education meeting.

Recommendation: lean toward yes

This ballot issue is problematic. It takes away some school board accountability by no longer allowing voters to approve future overrides. Unlike Issue 1A, this ballot language provides no indication that BVSD might ever impose less than the maximum mill levy on property owners.

This is a tough time to ask for a permanent, "maximum" tax increase (and especially tough for the Fourmile Canyon folks who lost their homes). However, I'd like the school district to be able to focus on educating children rather than on fundraising. If we can be assured that the money will be spent well, the tax icrease will be a good investment.


Website for the Yes side
http://votechildrenfirst.org/

Website for the No side
No known website -- Info on an opposition website appreciated.


Approved Ballot Language

BOULDER VALLEY SCHOOL DISTRICT RE-2 BALLOT ISSUE 3A

SHALL BOULDER VALLEY SCHOOL DISTRICT RE 2 TAXES BE INCREASED BY $22,500,000 DOLLARS IN 2010 FOR COLLECTION IN THE 2011 CALENDAR YEAR, AND BY SUCH AMOUNTS AS MAY BE COLLECTED ANNUALLY THEREAFTER BY THE IMPOSITION OF A MILL LEVY WHICH GENERATES REVENUE, WHICH TOGETHER WITH THE REVENUES PRODUCED BY PREVIOUS VOTER AUTHORIZED TAX INCREASES OF THE DISTRICT UNDER 22-54-108, C.R.S., AS AMENDED, IS NOT GREATER THAN TWENTY-FIVE PERCENT OF THE DISTRICT’S TOTAL PROGRAM FUNDING PLUS SUPPLEMENTAL COST OF LIVING ADJUSTMENT, TO BE USED FOR GENERAL FUND PURPOSES, WHICH MAY INCLUDE BUT ARE NOT LIMITED TO:
· RESTORING CRITICAL BUDGET CUTS;
· MITIGATING FUTURE BUDGET CUTS;
· SUPPLEMENTING TEACHER AND STAFF COMPENSATION;
· FUNDING EARLY CHILDHOOD EDUCATION PROGRAMS;
AND SHALL SUCH INCREASE BE AN ADDITIONAL PROPERTY TAX MILL LEVY IN EXCESS OF THE LEVIES THE DISTRICT IS OTHERWISE AUTHORIZED BY LAW TO IMPOSE; AND SHALL THE DISTRICT BE AUTHORIZED TO COLLECT, RETAIN AND SPEND ALL REVENUES FROM SUCH TAXES AND THE EARNINGS FROM THE INVESTMENT OF SUCH REVENUES AS A VOTER APPROVED REVENUE CHANGE AND AN EXCEPTION TO THE LIMITS WHICH WOULD OTHERWISE APPLY UNDER ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?

YES _____ NO _____


See the last 9 pages of the Aug 24, 2010 BVSD Board of Directors meeting agenda for Resolution No. 10-25.
http://bvsd.org/boe/Pages/default.aspx

Amendment 50 -- Limited Gaming in Central City, Black Hawk, and Cripple Creek

In 1990 Colorado voters approved a constitutional amendment allowing limited gambling in three mountain communities. This ballot issue would allow the communities to raise the maximum single bet from $5 to $100 and allow expanded hours and gaming options. The expected tax revenue increase would go toward community colleges (78%) and the affected towns and counties (22%).

Required CONSTITUTIONAL change -- CHANGES Section 9 of Article XVIII

Recommendation: lean no
I find it ridiculous that we have gaming limits spelled out in our state constitution. I’d vote in a minute to have the entire gaming portion of the constitution changed to statute. Meanwhile, community colleges in Colorado are underfunded, but, aside from the constitutional vs statutory question, I don’t like the proposed solution for the following reasons. During your education and especially if you study probability, you learn that gambling is a losing proposition. What kind of signal are we sending students by using gambling taxes to fund education? In addition, as long as bet limits are $5, one could argue that money spent in the gaming towns is more a form of entertainment than serious gambling. Some say that we should let grownups decide for themselves if they want to gamble (and they certainly can gamble any time on the stock market), but this proposal wouldn’t affect just individuals. It would affect whole communities. At least this proposal would allow the residents of the affected communities to determine their own fate.


Website for Yes side (Coloradans for Community Colleges)
http://sayyeson50.com/

Website for No side
http://keepvegasout.com/


Amendment 50 (Approved ballot title below)

Limited Gaming in Central City, Black Hawk, and Cripple Creek

SHALL THERE BE AN AMENDMENT TO THE COLORADO CONSTITUTION CONCERNING VOTER-APPROVED REVISIONS TO LIMITED GAMING, AND, IN CONNECTION THEREWITH, ALLOWING THE LOCAL VOTERS IN CENTRAL CITY, BLACK HAWK, AND CRIPPLE CREEK TO EXTEND CASINO HOURS OF OPERATION, APPROVED GAMES TO INCLUDE ROULETTE AND CRAPS OR BOTH, AND MAXIMUM SINGLE BETS UP TO $100; ADJUSTING DISTRIBUTIONS TO CURRENT GAMING FUND RECIPIENTS FOR GROWTH IN GAMING TAX REVENUE DUE TO VOTER-APPROVED REVISIONS IN GAMING; DISTRIBUTING 78% OF THE REMAINING GAMING TAX REVENUE FROM THIS AMENDMENT FOR STUDENT FINANCIAL AID AND CLASSROOM INSTRUCTION AT COMMUNITY COLLEGES ACCORDING TO THE PROPORTION OF THEIR RESPECTIVE STUDENT ENROLLMENTS, AND 22% FOR LOCAL GAMING IMPACTS IN GILPIN AND TELLER COUNTIES AND THE CITIES OF CENTRAL CITY, BLACK HAWK, AND CRIPPLE CREEK ACCORDING TO THE PROPORTION OF INCREASED TAX REVENUE FROM VOTER-APPROVED REVISIONS IN EACH CITY OR COUNTY; AND REQUIRING ANY INCREASE IN GAMING TAXES FROM THE LEVELS IMPOSED AS OF JULY 1, 2008 TO BE APPROVED AT A STATEWIDE ELECTION, IF LOCAL VOTERS IN ONE OR MORE CITIES HAVE APPROVED ANY REVISION TO LIMITED GAMING?

Yes ________________ No ________________


To see the full text of the proposed measure, click here, then click on “2008 State Ballot Information Booklet” at the top of the page.

Amendment 59 -- Education Funding and TABOR Rebates

This initiative would 1) set aside money up to a certain threshold in a savings account within the State Education Fund for preschool through 12th grade (P-12) education and limit when the savings account money can be spent, 2) allow certain transfers from the general fund to the State Education Fund after required transfers to the Highway Users Tax Fund are made, 3) eliminate the inflationary increase in P-12 education spending currently required by the Amendment 23 provision, and 4) eliminate TABOR rebates (when the state collects more money than is allowed) putting the money in the State Education Fund. The first two provisions listed above would take effect in the 2009-10 fiscal year, but the other provisions would only take effect in the 2011-12 fiscal year.

Required CONSTITUTIONAL change -- CHANGES Section 17 of Article IX and ADDS a subsection to Section 20 of Article X

Recommendation: yes
Amendment 23 and the TABOR rebates have handcuffed the general assembly in its ability to budget for our state. This amendment would get rid of both of those handcuffs. It also allows the state to set aside money for education in an economic downturn. Because P-12 education is the biggest chunk of the state budget and we are taking away Amendment 23’s provisions of guaranteed funding, it is reasonable for the TABOR rebates to go into the State Education Fund. Although taxpayers might be unhappy about not getting future rebates, revenue collection (e.g. taxes) is still constrained by TABOR. Meanwhile, the hope is that the P-12 education system in our state will improve.


Website for Yes side (Savings Account for Education Initiative)
http://www.coloradosafe.org/

Website for No side (Strike a Better Balance)
http://www.strikeabetterbalance.com/


Amendment 59 (Approved ballot title below)

Education Funding and TABOR Rebates

SHALL THERE BE AN AMENDMENT TO THE COLORADO CONSTITUTION CONCERNING THE MANNER IN WHICH THE STATE FUNDS PUBLIC EDUCATION FROM PRESCHOOL THROUGH THE TWELFTH GRADE, AND, IN CONNECTION THEREWITH, FOR THE 2010-11 STATE FISCAL YEAR AND EACH STATE FISCAL YEAR THEREAFTER, REQUIRING THAT ANY REVENUE THAT THE STATE WOULD OTHERWISE BE REQUIRED TO REFUND PURSUANT TO THE CONSTITUTIONAL LIMIT ON STATE FISCAL YEAR SPENDING BE TRANSFERRED INSTEAD TO THE STATE EDUCATION FUND; ELIMINATING THE REQUIREMENT THAT, FOR THE 2011-12 STATE FISCAL YEAR AND EACH STATE FISCAL YEAR THEREAFTER, THE STATEWIDE BASE PER PUPIL FUNDING FOR PUBLIC EDUCATION FROM PRESCHOOL THROUGH THE TWELFTH GRADE AND THE TOTAL STATE FUNDING FOR ALL CATEGORICAL PROGRAMS INCREASE ANNUALLY BY AT LEAST THE RATE OF INFLATION; CREATING A SAVINGS ACCOUNT IN THE STATE EDUCATION FUND; REQUIRING THAT A PORTION OF THE STATE INCOME TAX REVENUE THAT IS DEPOSITED IN THE STATE EDUCATION FUND BE CREDITED TO THE SAVINGS ACCOUNT IN CERTAIN CIRCUMSTANCES; REQUIRING EITHER A TWO-THIRDS MAJORITY VOTE OF EACH HOUSE OF THE GENERAL ASSEMBLY OR, IN ANY STATE FISCAL YEAR IN WHICH COLORADO PERSONAL INCOME GROWS LESS THAN SIX PERCENT BETWEEN THE TWO PREVIOUS CALENDAR YEARS, A SIMPLE MAJORITY VOTE OF THE GENERAL ASSEMBLY TO USE THE MONEYS IN THE SAVINGS ACCOUNT; ESTABLISHING THE PURPOSES FOR WHICH MONEYS IN THE SAVINGS ACCOUNT MAY BE SPENT; ESTABLISHING A MAXIMUM AMOUNT THAT MAY BE IN THE SAVINGS ACCOUNT IN ANY STATE FISCAL YEAR; AND ALLOWING THE GENERAL ASSEMBLY TO TRANSFER MONEYS FROM THE GENERAL FUND TO THE STATE EDUCATION FUND, SO LONG AS CERTAIN OBLIGATIONS FOR TRANSPORTATION FUNDING ARE MET?

Yes ________________ No ________________


To see the full text of the proposed measure, click here, then click on “2008 State Ballot Information Booklet” at the top of the page.