Statewide ballot question Proposition CC could send millions of dollars in additional funding to K-12 schools, higher education and transportation, but it is unknown how much money could reach La Plata and Montezuma counties school districts, Fort Lewis College or regional highways.
Proposition CC asks voters to allow the state to keep all the tax revenue it collects after June 2019 that the state’s Taxpayer’s Bill of Rights would otherwise send back to residents as refunds.
TABOR limits the amount of revenue the state can collect to inflation plus population growth. When the state’s collection of taxes exceeds the TABOR limit, the state returns the surplus to residents. Individuals can receive money back from the state or pay less in taxes.
School districts, fire districts and other groups that collect taxes have taken the same step, often called de-Brucing, which refers to TABOR author Douglas Bruce. Proposition CC would not de-Bruce all special taxing districts in the state; rather, it would apply only to the state government.
The state ballot question would eliminate TABOR refunds in perpetuity beginning in the 2021 tax season.
If the measure passes, state projections show $264 million collected in the 2019-20 fiscal year could be divided evenly among K-12, higher education and transportation.
Residents would forgo an average of $27 in tax refunds when paying taxes in 2021 if the measure passes, said Elliot Goldbaum, spokesman for the Colorado Fiscal Institute.
Proposition CC could provide additional revenue to the state when times are good, but it would not provide enough funding to meet all the state’s transportation or education needs, Goldbaum said.
“It’s a step in the right direction in terms of solving some of those issues; it’s not going to be the magic bullet,” he said.
The money would likely have to be used for one-time investments, such as school computers and not ongoing costs such as salaries because it will not be constant, he said.
The Legislature would also have the power to change how the money is spent because Proposition CC is not a constitutional amendment, he said.
State Rep. Barbara McLachlan, D-Durango, said she backs the measure because it provides additional funding to schools and transportation, which are both in “dire” need of support and it does not increase tax rates.
“The money is there, let’s spend it wisely on Colorado,” McLachlan said. “I think it’s good governance.”
State Sen. Don Coram, R- Montrose, said he opposes the measure because TABOR’s revenue cap keeps the Legislature honest.
“If we are able to just go out and spend, spend, spend, I think we would be doing a lot of programs that I think, us, in rural Colorado, would probably never benefit from,” he said.
Instead of removing the revenue cap, Coram would like to see the Legislature address the conflicts among TABOR, the Gallagher Amendment and Amendment 23. The Gallagher Amendment lowers the assessed value of homes when the value of residential property increases faster than nonresidential properties. So as home values have grown faster than business values statewide, homeowners have paid proportionally lower taxes.
Amendment 23 sets the minimum funding levels for per-pupil education.
Fixing the conflicts between the three laws would likely require the Legislature to place a question before voters, but it could get to the root of the state’s revenue problems, Coram said.
Local education officials support Proposition CC, even though they don’t know how much money regional schools could receive.
The Durango School District 9-R board agreed this week to support Proposition CC and allow the superintendent to publicly support the measure, even though it is unknown how much the district would receive.
School board member Stephanie Moran said TABOR refunds tend to be fairly small on an individual level, but on a macro level, they can have a real impact on infrastructure and educational systems.
FLC’s Vice President for Finance and Administration Steve Schwartz is unsure how funding for higher education would be distributed or how much the college would receive.
However, the influx of millions of dollars in investment in the higher ed system is needed because colleges and universities across the state are aging and in need of upgrades. At FLC, the money would likely be invested in infrastructure and programs to encourage student success and job readiness, he said.
Colorado Department of Transportation spokesman Matthew Inzeo said it would be premature to say what projects in La Plata and Montezuma counties could be funded if Proposition CC passed.
“CDOT has unmet needs across the state,” he said in an email to The Durango Herald, “and additional resources are allocated to best meet all of our priorities and responsibilities.”