Colorado Sales and Income Tax Increase Initiative, Proposition 103 (2011)

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Tax Increase Initiative
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Type:State statute
State code:Colorado Statutes, Section 39
Referred by:Sen. Rollie Heath[1]
Topic:Taxes
Status:Defeated Defeatedd
The Colorado Tax Increase Initiative, also known as Proposition 103, appeared on the November 1, 2011 ballot in the state of Colorado as an initiated state statute, where it was defeated. Defeatedd

The measure would have increased the state income and sales tax. Specifically, it would have increased the state income tax to 5 percent and the sales tax to 3 percent. The state income tax before the proposal was 4.63 percent and the sales tax was 2.9 percent.

State Senator Rollie Heath and other supporters initiated the signature gathering process to place it on the ballot.

The revenue generated from the tax increase would have been used to help fund education in the state.[2][3][4] It was estimated that the measure would have generated about $3 billion, according to reports.[5]

According to Heath at the time of the proposal's introduction, "When people see what we’re doing to schools and classrooms, and closing schools and classrooms, and cutting back, they realize that this is reality and that education is economic development and jobs, and that we’re virtually last in the country for funding higher education and K-12, I’m hoping that people will understand that this cuts into the future, and regardless of how difficult the times, we need to invest in our kids"

However, opponents of the proposed ballot question, such as Jon Caldara, president of the libertarian Independence Institute, argued, "It is difficult to get something on the ballot purely with volunteers, especially something like this. It’s easier to get something on the ballot like abortion and gun control, something very easy to understand. This one’s not quite as easy."[2]

Because of the Taxpayer's Bill of Rights, any tax increase in the state must be approved by voters before implementation.[5]

Election results

The following are unofficial election results:

Proposition 103
ResultVotesPercentage
Defeatedd No611,90763.6%
Yes 349,746 36.3%

Text of measure

Ballot language

The ballot language that voters saw on the ballot read:[6]

State taxes shall 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.

Support

Supporters

The following were supporters of the measure:

Arguments

  • Rollie Heath stated, when he revealed his proposal: "Doing nothing in the face of these horrible budget cuts is just not an option."[7]
  • Heath argued that the impact of the measure “Will hopefully keep schools open, keep teachers on the job, keep librarians in place, allow for all the extra curricular activities, provide computers for kids. We’ve taken out over 500 million dollars the last two years, this would help replace that."[8]
  • According to Rollie Heath in September 2011: “We had an overwhelming response. People said, ‘It’s about time. We’ve gone too far.’”[9]
  • In October 2011, Heath stated: "I think the best headline that could be run on the morning after the election is, 'Colorado bucks the trend, decides to reinvest in jobs and kids and education'.I think that would be the greatest economic development headline the state could possibly have."[10]
  • Supporters claimed that an increase in state taxes would not hurt the economy in the state, but that cutbacks in education would hurt it.[11]
  • State Senator Angela Giron claimed: “It’s about education and jobs and I think that this is really a jobs and economic initiative. We need to be able to fund our education so that we can actually have an educated workforce."[8]
  • John Straayer, a political science professor at CSU, commented about state tax cuts and the proposed measure: "Some of our current budget mess is a product of those decisions which were, in my judgment, misguided. I would have signed the [proposed ballot measure] petition. I will vote ‘yes’ — I do hope it passes and turns out to be the first of several badly needed fixes to our state fiscal policy."[12]
  • According to Aurora Public Schools Superintendent John Barry: “We have lost $70 million over the last five years. We lost $17 million last year, and $25 million this year. That puts in perspective some of our needs. (This proposition) would mean somewhere in the $20 million to $30 million category. It certainly would help balance the books, so to speak, based on the loss of revenue."[13]
  • After a long silence, the Colorado Education Association stated its support for the measure. According to CEA president Beverly Ingle in a statement: "We're greatly encouraged to see that so many voters share our view that great economies start with great education. This wonderful coalition of concerned civic groups, businesses and families is tired of hearing that student growth isn't a budget priority. We stand with them to remind all Coloradans that the education of our children is the state's most pressing obligation and most critical investment."[14]
  • Former Grand Junction High School principal Kevin Schott was a backer of the initiative effort, stating that budget cuts had hurt education in the state. Schott stated: "In terms of the well rounded education that we've been able to offer in the past, that's where you see the budget cuts start to hit."[15]
  • The Colorado Association of School Boards and the Colorado Association of School Executives were both supporters of the measure. The Colorado Association of School Boards' deputy executive director Jane Urschel stated: "We saw that nobody else is doing anything. Sen. Heath is exactly right: The state is in tough shape, and let's see what the public wants to say about that."[16]
  • Paula Stephenson of the Colorado Rural Schools Caucus argued: "In rural Colorado, we haven’t just tinkered around the edges, we’ve cut to the core and are now struggling just to survive."[17]
  • St. Vrain school board president John Creighton stated: "This is the option we have right now. Are you for kids or not? Do you support education or not?"[18]
  • Pueblo City Schools teacher Joyce Marino thanked Senator Heath for placing the measure on the ballot, saying: "A long-term fix would be great but I thank you for sending in the ambulance...I've never seen anything as destitute as the situation is in our schools and it's only getting worse."[19]
  • Months before the election, supporters of the initiative near Aspen, Colorado claimed that if the measure was enacted, it would have likely brought $1.7 million to Aspen public schools, which would amount to about $697 per student in 2013. According to Carol Hedges, director of the Colorado Fiscal Policy Institute: “If this passes, we would be the only state in the nation to stop the cuts to public education and reinvest in our community. This is our chance to make a difference; to be leaders.”[20]

Campaign contributions

The following were contributions made in support of the measure:

Donor Amount
Support Schools for a Bright Colorado $419,960.87
Total $419,960.87

Opposition

Opponents of the proposed tax increase argued that although the tax may generate an estimated $3 billion in new taxes if enacted, it would cost the state 119,000 jobs after five years. Additionally, opponents argued that despite budget cuts, education was not in need of the additional revenue that would be generated by the proposed measure. "K-12 is not lacking funding. K-12 is lacking structural reform," said former state Rep. Victor Mitchell, who headed Save Colorado Jobs, a group in opposition of the proposal.[21]

Opponents

The following were opponents of the measure:

Arguments

  • According to Compass Colorado, the main campaign against the measure, Prop 103's impacts would have:[25]
Raised Colorado’s income tax–for individuals and employers–to 5 percent
Raised Colorado’s sales tax to 3 percent
Wiped out tens of thousands of jobs
Chased away $218 million in taxable income
Coloradans making under $50,000 a year would have picked up nearly a quarter of the tax burden
  • State Senate Minority Leader Mike Kopp, commented on Heath's proposal: "Colorado has a revenue problem due to one simple fact: Families and businesses are having a revenue problem. This Democrat proposal to raise taxes will only hinder economic recovery and put added financial stress on already struggling families."[7]
  • Opponents said that the measure would cost the state 119,000 jobs after five years, Also, it would deal a “crushing blow” to the state’s economy, which was already struggling, opponents claimed.[11]
  • Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association in California, stated: “If they’re honest and straightforward and just say it’s a tax increase, we think it has no chance.”[5]
  • Speaker of the House Frank McNulty was quoted in a statement saying: “Colorado’s hard-working families and job creators are struggling to survive in this recession. The last thing they need right now is Democrats pushing another state tax increase.[13]
  • Tyler Q. Houlton, president of Compass Colorado, argued: “I still think people are going to reject Proposition 103, because it is a $3 billion tax increase in the middle of a recession."[17]
  • Colorado Progressive Coalition economic justice director Corrine Fowler argued against the measure: “From CPC’s mission statement standpoint, we can’t support an increase of the flat tax because it is totally inequitable. It creates more regressivity in the tax structure than what already exists. We think it is bad policy to raise the flat tax when a graduated income tax would raise twice as much money as a flat tax, would only raise taxes on a small portion of the population and would more evenly distribute the tax responsibility.”[22]
  • Victor Mitchell, former former state lawmaker, stated: “K-12 education is not lacking funding, it is lacking structural reform...We are up against the Colorado Education Association.”[23]
    • Mitchell also stated: “Proposition 103, if passed, would be one of the largest tax increases in Colorado history. Unfortunately, it could not happen at a more inopportune time.”[11]
  • According to John Caldara, president of the think tank Independence Institute, who opposed the measure: “The economy is growing at perhaps 1 percent. I think it’s a pretty fair question to ask why the state government should get an 8 percent increase in its revenues on this slow growth...Why an 8 percent increase in taxes when our anemic economy is only growing at 1 percent?"[24]

Campaign contributions

Total campaign cash Campaign Finance Ballotpedia.png
Category:Ballot measure endorsements Support: $419,960.87
Circle thumbs down.png Opposition: $12,092.00

The following were contributions made in opposition of the measure.

Donor Amount
Colorado Union of Taxpayers $12,092.00
Total $12,092.00

Other perspectives

Taxes on the ballot in 2011
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  • In a column published by The Denver Post, Mark L. Fermanich, a research analyst at the School of Public Affairs at the University of Colorado Denver, stated that money wasn't the only way to improve education in the state. While Fermanich did not state his support or opposition in his column, Fermanich stated in his writing: "...an aggregate fiscal measure such as total spending per student is not an appropriate metric when coupled with a narrowly defined outcome such as math or reading test scores." In concluding his statements, Fermanich stated: "...state and district policymakers should also keep in mind that additional revenues for education will not by themselves guarantee better student outcomes. To ensure that these resources are used effectively will require a greater emphasis on strategic thinking around resource use, better data systems, more training in using data to assess student needs and identify and evaluate promising instructional strategies, and greater capacity for supporting districts."[26]

Media endorsements

See also: Endorsements of Colorado ballot measures, 2011

Support

  • The Daily Camera stated: "State spending on education has been gutted in recent years -- by $700 million in the last four years alone, with more cuts on the table next year. Current students and the future workforce of Colorado deserve better. We support Proposition 103."[27]
  • The Durango Herald commented in an editorial: "Proposition 103 will not solve all the problems facing education in Colorado. It will, however, ensure that educators and students do not face choices that erode the underpinnings of education in the state. Taxpayers will not have to sacrifice much to ensure that outcome, but failing to do so will force a great sacrifice, indeed."[28]

Opposition

  • The Denver Post opposed the meausure in an editorial: "These are not unreasonable increases, and the $3 billion raised would go toward K-12 education and higher education. But they come at a time when even modest hikes could damage too many businesses and individuals whose financial situation is precarious. The big problem with Proposition 103 is that it falls woefully short in addressing the state's financial troubles and finding a long-term solution to education funding.[29]
  • The Journal Advocate stated: "While anyone who is willing and able to pay a higher tax bill for the next five years is welcome to vote in favor of this proposal, we think it is a band-aid solution to a problem that requires more invasive treatment. We say "no" to Proposition 103, because it just won't cure Colorado's school funding ills."[30]

Path to the ballot

See also: Laws governing the initiative process in Colorado

Supporters were required to collect at least 85,853 signatures from registered state voters by the August 1, 2011 petition drive deadline in order for the measure to make the ballot.

On June 21, 2011, supporters turned in 108 petitions with 4,100 signatures to the campaign, according the grassroots effort. According to Laura McDonald of Grassroots St. Vrain, the group gathering the signatures: "At this point, we're just trying to get signatures...This has not bee a tough sell."[31]

On July 7, 2011 supporters stated that they had collected about 67,000 signatures.[8]

When contacted by Ballotpedia on July 27, the Colorado Secretary of State's office stated that Senator Rollie Heath verbally committed to submitting signatures for his proposal by the August 1 deadline.

On the day of the deadline, Heath and supporters submitted 142,160 signatures, more than the 86,105 valid signatures needed to place the measure on the ballot. The Secretary of State then checked signatures in order to deem the initiative worthy of ballot access.[32]

On August 24, Colorado Secretary of State Scott Gessler certified the ballot measure after confirming that enough signatures were gathered in order to include it in the November 1, 2011 general election.[33]

Filed complaint

Opponents filed a complaint with the secretary of state's office stating that a signature gatherer for the initiative broke the law with "false and misleading statements" about the measure. The complaint was filed by Jon Caldara, president of the Independence Institute, citing a video in which that signature gatherer states the ballot proposal would not raise taxes. The video was taken by Kelly Maher when the conservative blogger went undercover to find circulation gatherers. No action to remove the measure from the ballot was taken.[34]

Timeline

Calendar.png

The following is a timeline of events surrounding the measure:

Event Date Developments
Petition circulation June 21, 2011 Supporters turned in 108 petitions with 4,100 signatures to the campaign
Petition circulation July 7, 2011 Supporters stated that they had collected about 67,000 signatures
Petitions submitted August 1, 2011 Supporters submitted a total of 142,160 signatures
Certification August 24, 2011 Colorado Secretary of State Scott Gessler certified the ballot measure

See also

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Suggest a link

Additional reading

References

  1. Heath referred measure as a citizen.
  2. 2.0 2.1 The Denver Daily News, "Tax hike proposal unveiled," May 16, 2011
  3. Colorado Secretary of State, "Initiative 25," accessed May 16, 2011
  4. Denver Post, "Tax increase for education will be on Colorado ballot in November," August 25, 2011
  5. 5.0 5.1 5.2 Stateline.org, "Tax supporters turn to the ballot box," August 29, 2011
  6. Colorado Secretary of State, "Proposed Ballot Measure Deemed Sufficient," August 24, 2011
  7. 7.0 7.1 Denver Post, "Heath reveals ballot proposal to raise taxes for schools," May 17, 2011
  8. 8.0 8.1 8.2 KKTV.com, "Senator Seeks Support for Tax Initiative in Southern Colorado," July 9, 2011
  9. Bloomberg.com, "Colorado Voters May Raise Taxes by $3 Billion to Aid Schools," September 11, 2011
  10. KWGN.com, "Sponsor claims momentum behind proposed tax hike to fund schools," October 19, 2011
  11. 11.0 11.1 11.2 Colorado Statesman, "Prop 103 foes roll out campaign," September 19, 2011
  12. Collegian, "Sen. Rollie Heath campaigns for education funding," August 6, 2011
  13. 13.0 13.1 13.2 Aurora Sentinel, "State school tax hike getting mixed reviews in Aurora," August 30, 2011
  14. The Denver Post, "Colorado Education Association gets behind ballot proposal to hike taxes for education," August 16, 2011
  15. KJCT8.com, "Initiative 25: Increased Taxes For Funding Education," July 12, 2011
  16. Denver Post, "Major education groups in Colorado back proposed state tax hike for K-12," August 3, 2011
  17. 17.0 17.1 The Durango Herald, "Prop 103 pushes toward finish," October 27, 2011
  18. Times Call, "SVVSD leaders support Initiative 25, tax increases to fund schools," August 8, 2011
  19. Chieftain.com, "Proposition 103 supporters rally," September 30, 2011
  20. Aspen Times, "Supporters: Colorado's Prop 103 worth $1.17M," October 17, 2011
  21. 21.0 21.1 The Colorado Statesman, "Prop 103 foes roll out campaign," September 19, 2011
  22. 22.0 22.1 The Colorado Independent, "Education initiative draws lukewarm response from some due to effect of tax on poor," August 1, 2011
  23. 23.0 23.1 Ednewscolorado.org, "Prop. 103 battle joined," September 15, 2011
  24. 24.0 24.1 Boulder Weekly, "Sinking Ship," September 15, 2011
  25. Compass Colorado, "Proposition 103 Facts," accessed October 19, 2011
  26. Denver Post, "In education, money isn't all," August 31, 2011
  27. Daily Camera, "Yes on funds for schools," October 12, 2011
  28. "Yes on Prop. 103," October 19, 2011
  29. The Denver Post, "Editorial: Proposition 103 misses its mark," October 16, 2011
  30. Journal Advocate, "Prop 103 would treat symptoms, not disease," October 21, 2011
  31. Times Call, "Grassroots group wants tax measure on ballot," June 21, 2011
  32. Business Journal, "Sen. Heath turns in signatures for education tax boost," August 1, 2011
  33. Denver Post, "Tax increase for education will be on Colorado ballot in November," August 25, 2011
  34. Denver Post, "Foes of Colorado education-funding initiative file complaint over petition worker's tactics," September 14, 2011