Election 2019

Yes or no on Prop CC: Arguments for and against

Ballot question asks whether state can keep tax money that goes above TABOR limits

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The most controversial choice on voters' ballots this November may not be over a politician — it could be over Proposition CC.

That's a measure that asks Colorado voters to allow the state government to keep tax revenue that it currently must give back to taxpayers on an annual basis.

Proponents say it's a small start to catching Colorado's budget up from dire shortfalls in funding for education and roads and bridges. But opponents say taxpayers can't be sure the money will be spent the way it's promised.

Here's a breakdown of what Prop CC does, the arguments for and against it, and how it relates to TABOR, one of Colorado's most beloved — and infamous — laws.

What is TABOR?

Colorado voters in 1992 passed the Taxpayer's Bill of Rights, or TABOR, which limits the amount of money that the state government can collect and spend, or save, each year.

The limit is adjusted each year based on inflation, population growth, and voter-approved changes to the limit, according to the 2019 state ballot information booklet, or “blue book.” TABOR is an amendment to the Colorado Constitution.

Currently, about one-third of the money Colorado collects is subject to the limit, including most taxes and some fees. The other two-thirds of state funds includes money from voter-approved tax increases, government-owned businesses and the federal government.

Under TABOR, money collected above the limit must be refunded to taxpayers. Part of the money returns to people in property tax benefits from local governments, and part of it comes back through state income tax returns.

How much is at stake?

Proposition CC would eliminate future TABOR refunds and instead use that money for K-12 education, higher education and transportation projects.

Just how much money the refunds are worth is unclear. The Legislative Council Staff — the state Legislature's nonpartisan research arm — estimates TABOR refunds would total $542 million from fiscal year 2019 to 2022. The Governor's Office of State Planning and Budgeting put the figure at $1.7 billion for the same time period. Earlier this year, the Legislative Council estimated a $652 million refund from fiscal year 2019 to 2021 alone.

What this means for individual taxpayers is that, depending on their yearly income, a TABOR refund in one year could be as low as $20 or as high as $79. Joint filers would get twice as much.

If the governor's office's higher projections hold, on average, individuals' one-year refunds could be about $125, and joint filers could get $323, for 2022-23.

Where would it all go?

If Proposition CC passes and TABOR refunds cease, the money would be split into equal thirds for public schools, higher education and transportation projects.

Public schools would receive money on a per-pupil basis — depending on how many students they have — and only for non-recurring expenses, meaning the money can't go to teacher salaries. It could go to initiatives to improve teacher training, books and technology for students, and other assistance to teachers.

Transportation money would be split 60% to the State Highway Fund, 22% to counties and 18% to municipalities.

Of the State Highway Fund share, no more than 85% could be spent for highway-related projects, and at least 15% would go to transit-related projects.

Higher education spending appears not to be limited to specific criteria, based on the text of state House Bill 19-1258, the technical language related to Proposition CC that goes into effect if it succeeds.

For or against

Prop CC supporters say that despite Colorado's high ranking for median household income, it ranks in the bottom third of states in per-student public spending on K-12 education and lags behind in higher education, too. Colorado road quality continues to drop while the costs of improvements increase, they say.

Opponents say there's nothing stopping the Legislature from changing Prop CC's one-third-split formula or replacing current funds with the new Prop CC funds and moving the current money to other matters. Supporters argue that because Prop CC requires an annual audit of how the money is spent, voters can scrutinize where it ends up, but opponents are skeptical.

Detractors, such as the No on CC Coalition, also emphasize the proposition can't benefit teacher salaries. Supporters, such as the CC Yes! campaign, say the money could go to help teachers pay student loans, toward bonuses and to incentives to work in rural districts.

Perhaps the most philosophical argument is whether Prop CC is the first step toward dismantling TABOR as a whole — opponents characterize it as a slippery slope. Supporters note that Prop CC wouldn't change citizens' right to vote on any new state taxes and tax rate increases, which is arguably the core of TABOR's spirit.

Opponents argue it's the first blank check on a road toward more changes to tax policy, and that the state's budget has already grown widely in the last decade.

Other bits to know

Colorado law includes a property tax “homestead" exemption for seniors and a disabled veteran exemption, which are first funded by refunds from TABOR surpluses.

Proposition CC is not expected to affect the exemption amounts available to these taxpayers, according to the Legislative Council Staff.

Since 1992, Colorado has had revenue above the TABOR limit in nine of 26 budget years.

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