What is Proposition 116 – State Income Tax Reduction – on this November’s Ballot
Proposition 116 asks voters to permanently reduce Colorado income tax rates from 4.63% to 4.55%. If Prop 116 is successful, while taxpayers will see a reduction in their state income taxes, the state will also see a significant decrease in its General Fund revenue.
Per 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).
Already having dealt with a $3.3 Billion shortfall this year, and a forecast of another $2 Billion shortfall next year, the projected reduction in revenue as a result of Prop 116 would setback our General Fund coffers by an additional $78+ million for FY2019-20; $158 million in FY2020-21; and $170 million in FY2021-22.
Reduced income tax collection is driving the decline in revenue. 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/
It’s scary for the state and downright terrifying for our schools. Stop and think about it. Is it worth 77 cents a week to you to defund public education?
While this measure did not require 2% of registered voters in each Senate District to sign a petition, the sponsors of this ballot measure, a coalition that partnered with Jon Caldara and the Independence Institute, and Michael Fields of Colorado Rising Action, Unite for Colorado (Dustin Zvonek CEO of Unite for Colorado & an AFP alumnus), and Americans for Prosperity (aka Koch Brothers), collected nearly two hundred thousand signatures. AND, because it does not require any change to the state constitution, it only requires 50 percent plus one to pass.
Here’s the Ballot Language from the Legislative Council’s Impact Statement:
Prop 116 Lowering of the Flat Tax Rate (Formerly Initiative #306)
State Income Tax Reduction
Ballot Language: Shall there be a change to the Colorado Revised Statutes reducing the state income tax rate from 4.63% to 4.55%?
“The measure reduces General Fund revenue by an estimated:
- $78.1 million in the current FY2019-20
- $158.4 million in FY 2020-21, and
- $169.8 million in FY 2021-22”
If passed, the measure reduces income tax rate for tax year 2020, and would be expected to reduce revenue for FY2019/20.