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$950M income tax increase proposed for Colorado schools

By: The Associated Press
June 26, 2013 Updated: June 26, 2013 at 12:44 pm
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DENVER — Colorado voters might be asked in November to approve an income tax hike that would raise an additional $950 million for schools to decrease class sizes, increase access to kindergarten and bolster special education programs.

As drafted, the proposed measure would tax income of more than $75,000 at a higher rate, which drew opposition from some people who argued for a flat tax increase. Supporters still must collect signatures of 86,105 registered Colorado voters by Aug. 5 to get the measure on the ballot.

"Our organization is on the record opposing a graduated tax. However, we haven't taken a position on the ballot measure," said Tamra Ward, president of Colorado Concern, a coalition of CEOs who advocate for business.

Ward said her organization will not decide whether to oppose, support or stay neutral on the measure until it is officially on the November ballot.

State Sen. Mike Johnston, D-Denver, who spent two years crafting the school finance legislation, said the ballot proposal is the best way to pay for needed changes.

"The flat-tax proposal would make Colorado the single-highest flat tax in the country, and it would represent twice as large an increase on the average taxpayer as the two-step proposal does," Johnston said.

Colorado's current income tax rate is a flat 4.63 percent for everyone, regardless of income. The proposed ballot measure, announced Tuesday, would set a flat-tax rate of 5 percent for all income of less than $75,000 a year. Higher earners would be taxed at a rate of 5 percent for income up to $75,000 annually and 5.9 percent for earnings above that level.

A person with an annual income of $45,000 would pay an additional $166.50 a year, while someone who earns $100,000 a year would contribute an extra $595 annually.

Gov. John Hickenlooper told The Denver Post that he would likely support a ballot measure, but he didn't pledge to campaign for it, a slight change from his earlier pronouncements.

The governor said it would be "crazy to put more money into the system unless you change the structure of the system."

Eric Brown, director of communications for Hickenlooper, did not directly respond to a question on whether the governor supports the two-tier tax proposal.

"We look forward to following the petition process and continuing to talk to the business community and other stakeholders about these reforms," Brown said.

According to an April analysis by the Colorado Legislative Council, state tax revenue would have to increase by $1.1 billion to pay for the school finance overhaul, which includes additional money for the reform measures and for at-risk students. Even if voters approve the $950 million tax proposal, lawmakers will have to figure out how to make up the shortfall.

The Colorado Education Association, the union that represents teachers, and Great Education Colorado, a nonpartisan organization that supports public education, will be among the groups helping collect signatures in support of the proposal.

"The last five years have been about cutting opportunities for kids, reducing individual attention, increasing fees on parents, really reducing the opportunities for kids, and this is the first step to really restoring the future for students," said Lisa Weil, director of policy and communications for Great Education Colorado.

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Information from: The Denver Post, http://www.denverpost.com

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