One of the leading credit rating companies has held Colorado’s appraisal steady despite a series of ballot measures passed this year that affected taxes and spending.
Fitch Ratings noted that Amendment B, which repealed the Gallagher Amendment, would prevent the state from having to backfill $247 million in spending to school districts due to otherwise lowered residential property tax rates. In addition, Proposition EE similarly resulted in a net revenue increase to the state, imposing a new tax on nicotine vaping products and increasing tobacco taxes. The income from the measure will amount to approximately $175.6 million in the next fiscal year, primarily for K-12 education.
However, at the same time, voters approved a decrease to the state income tax rate, costing Colorado nearly $170 million in fiscal year 2021.
“Taxes were on the ballot in a number of states in the 2020 election, and the outcome of these statewide ballot initiatives will have a modest effect on state budgets for the most part,” the company explained. “Voters split in their support of taxes against a backdrop of weakening state revenues.”
Colorado’s rating for the School Credit Enhancement Program is AA/Stable, and the Colorado Charter School Moral Obligation Program remains at AA-/Stable.
While voters in a handful of other states rejected tax increases this year, Arizonans approved an $827 million tax increase for K-12 schools and Arkansans extended a sales tax increase for transportation.