Prop EE – Increase Taxes on Nicotine Products https://leg.colorado.gov/bills/hb20-1427
POSITION: SUPPORT WITH RESERVATIONS
This measure provides revenue for the Colorado Preschool Program, 3 years of additional funding for Colorado’s rural schools, and in its first 3 fiscal years deposits revenue to the State Education Fund. Additionally, by imposing a tax on e-cigarettes and vaping products, serves to discourage our youth from imbibing in either of these products.
While Prop EE would provide much needed funding for our public schools, it comes nowhere close to filling in the huge gap that already exists in funding our schools statewide – currently our schools are being shorted well over $1 Billion. This measure should not be seen as a panacea or solution to our devastatingly underfunded public education system in this state. Our reservation in supporting this measure is the concern that voters will incorrectly assume this addresses the severe underfunding of public schools in this state – not unlike the huge misconception about the marijuana sales tax that still exists today. The additional revenue is much needed, but neither the marijuana sales tax nor would this nicotine tax do an adequate job in filling the huge funding gap that currently exists.
Ballot Language: SHALL STATE TAXES BE INCREASED BY $294,000,000 ANNUALLY BY IMPOSING A TAX ON NICOTINE LIQUIDS USED IN E-CIGARETTES AND OTHER VAPING PRODUCTS THAT IS EQUAL TO THE TOTAL STATE TAX ON TOBACCO PRODUCTS WHEN FULLY PHASED IN, INCREMENTALLY INCREASING THE TOBACCO PRODUCTS TAX BY UP TO 22% OF THE MANUFACTURER’S LIST PRICE, INCREMENTALLY INCREASING THE CIGARETTE TAX BY UP TO 9 CENTS PER CIGARETTE, EXPANDING THE EXISTING CIGARETTE AND TOBACCO TAXES TO APPLY TO SALES TO CONSUMERS FROM OUTSIDE OF THE STATE, ESTABLISHING A MINIMUM TAX FOR MOIST SNUFF TOBACCO PRODUCTS, CREATING AN INVENTORY TAX THAT APPLIES FOR FUTURE CIGARETTE TAX INCREASES, AND INITIALLY USING THE TAX REVENUE PRIMARILY FOR PUBLIC SCHOOL FUNDING TO HELP OFFSET REVENUE THAT HAS BEEN LOST AS A RESULT OF THE ECONOMIC IMPACTS RELATED TO COVID-19 AND THEN FOR PROGRAMS THAT REDUCE THE USE OF TOBACCO AND NICOTINE PRODUCTS, ENHANCE THE VOLUNTARY COLORADO PRESCHOOL PROGRAM AND MAKE IT WIDELY AVAILABLE FOR FREE, AND MAINTAIN THE FUNDING FOR PROGRAMS THAT CURRENTLY RECEIVE REVENUE FROM TOBACCO TAXES, WITH THE STATE KEEPING AND SPENDING ALL OF THE NEW TAX REVENUE AS A VOTER-APPROVED REVENUE CHANGE?
Fiscal Impact Statement: https://leg.colorado.gov/sites/default/files/documents/2020A/bills/fn/2020a_hb1427_r1.pdf
- Rural Schools: Dollars for Rural Schools
- $25M (20/21)
- $30M (21/22)
- $35M (22/23)
- Preschool Program: Revenue in preschool program fund must be spent to provide at least 10 hours a week of free preschool to children year before they start kindergarten.
- State Education Fund: Any remaining revenue in the first 3 fiscal years deposited to the State Ed Fund. Can be spent for state share of total program funding or for other programs related to education, as determined by the General Assembly.
- These amounts are estimated to be:
- $49.2 million FY20/21
- $121.2 million FY21/22
- $115.1 million FY22/23