Education proponents take swing at tax increase for school funding
October 15, 2018
In another statewide attempt to increase taxes for education, Amendment 73 would use a sliding scale to raise income taxes on individuals and corporations making more than $150,000 per year.
Based on past results for education spending, Colorado voters are hesitant to increase taxes for school measures. This is the third attempt in the past seven years, and the previous two lost in landslides.
If passed, Amendment 73 would be a $1.6 billion tax increase annually for pre-K through high school education, and the money would be put into a new fund called the "Quality Public Education Fund."
According to the initial fiscal impact statement by the state, the funds would go toward upping the statewide base for per-student funding to $7,300. The base for 2017-18 was $6,546.20, according to the 2018 school finance report. Currently, the state spends $7 billion on education.
Authors of the measure say more money also would be spent on special education; early-childhood education and full-day kindergarten; programs for gifted and talented students, and English language learners; and offer free and reduced lunches to more students by expanding the "at-risk" definition.
Critics — including some chambers of commerce and state associations for bankers, restaurants and Realtors — say the amendment is too vague in its language on how the money would be spent and would hurt businesses because of the tax increase.
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It is the longest question on the state ballot, and has a number of intricacies within — from how the tax scale works to how the money would be spent, and who would OK the spending.
Currently, the state has a flat tax rate of 4.63 percent for individuals and businesses. That number would stay the same for those making less than $150,000.
According to the ballot language, the scale would add to the flat tax for individuals and would use "four tax brackets starting at 0.37% for income above $150,000 and increasing to 3.62% for income above $500,000." That means the rate for more than $150,000 would start at 5 percent and go to 8.25 percent for those in the highest bracket.
"This initiative is the one thing that can actually raise revenue substantially, sustainable revenue for our teachers. It actually takes someone to have about $182,000 in income before they're going to have any kind of impact," said Susan Meek, communications director for Great Education Colorado, which put forth the measure. "Ninety-two percent of Coloradans would see no impact on their income taxes."
For businesses, the measure would increase the corporate income tax rate by 1.37 percent to make it 6 percent.
Luke Ragland, president of the conservative education group Ready Colorado and co-chair of the No on Amendment 73 campaign, says the proposed amendment is poorly written and would have unintended consequences.
"This is being sold as a tax on the rich and a tax on CEOs and that's just factually not true," Ragland said. "Overnight, we'd go from a very tax-friendly state to a very tax-unfriendly state. … The most important thing that worries me is that it puts us higher than Utah, Arizona and New Mexico instantly. We currently have a lower corporate tax rate than those three states and all of sudden we would have a higher corporate tax rate."
The two most recent attempts to increase spending for Colorado schools were landslide losses: Amendment 66 failed in 2013 (64.5 percent to 35.5 percent) and Proposition 103 in 2011 failed (63.2 percent to 36.8 percent).
Ragland said changes for educational funding need to be started at the state Legislature. He points to the School Finance Interim Committee, which has bipartisan membership, as the place to start because they are dedicated to improving education and understand these problems.
A super-majority of 55 percent is required for Amendment 73 to pass.