Why Proposition 116 Will Only Hurt Those Already Hurting

This Sept 10, 2020 Denver Post article One in Five Coloradans Worry About Affording Food, Rent during COVIC-19 Pandemic, Survey Finds  by Meg Wingerter speaks to the tremendous economic impact COVID has had on our state – and when we think economic impact, we’re not just talking about the business/commercial end of it, but of the ultimate human impact.

https://www.denverpost.com/2020/09/10/colorado-health-survey-rent-food-covid-pandemic/

Important findings from the survey:

“One in five Coloradans surveyed said they were worried about losing their homes or being unable to feed their families over the next year…”

Other results:

  • 18% surveyed said they already “struggled to pay for necessities like food”.  Pollsters said they were “confident that the actual percentage of the population struggling to afford the basics is between 15.2% and 20.8%”.
  • 13% had been laid off – due to COVID,  and 31% had hours cut.  And  “Lower-income households were more likely to report either of those problems, or that their financial situation had worsened…”
  • “…about one-third of households making more than $100,000 said their financial position was better than last year.”

These are important findings, especially since Colorado voters will be considering a ballot measure this November that will cut state income taxes, but 55% of those cuts will benefit the top 3% of Colorado taxpayers.

The survey highlights Colorado’s higher-earners are faring well –

  •  “…about one-third of households making more than $100,000 said their financial position was better than last year.”
  • Additionally, “there are also factors that are specific to the pandemic, … wealthier people are more likely to be able to work at home, while also benefiting from a strong housing market and resilient stock prices” according to the senior director of policy advocacy at the Colorado Health Foundation.

But the tax cut provided in Proposition 116 does nothing to help the one in five Coloradans worried about losing their homes or being unable to feed their families over the next year.

According to the Legislative Fiscal Analysis, if this measure passes, households making

  • $50,000 a year would pay $40 less in income taxes annually (that equates to 77 cents a week)
  • $100,000 would pay $80 less (equal to $1.54/ week) and
  • $250,000 would pay $200 less (equates to $3.84/week).

So essentially the folks who need the help the most, benefit the least.  For those who are losing their jobs or may be at risk of losing their homes, an additional 77 cents a week does nothing – it doesn’t even cover a purchase at the Dollar Store. 

What Proposition 116 does do is cut the amount of revenue in the State’s General Fund.

“Since income taxes are 61% of the General Fund, any time the state isn’t collecting as much of them it means we have less to invest in education, health care, transportation, and other priorities.  Even before the current crisis, those collections haven’t been enough to adequately fund our investments.” https://www.coloradofiscal.org/2020/05/may-2020-revenue-forecast-covid19-budget-cuts/

Put in simple terms, those folks who are suffering the greatest from the economic impact of COVID-19 and the drastic downturn in the economy will need to rely the most on those state provided services that will be slashed as a result of the drastic drop in revenue to the state brought about by a tax cut that benefits the top 3% earners/taxpayers.

#NoOn116

For more information on the damaging effects of  Proposition 116:  https://www.coloradofiscal.org/2020/09/proposition-116-benefits-wealthy/