Proposition CC is Fatally Flawed; Lawmakers Should Try Again

The Denver Post won’t endorse Proposition CC. .

Editor’s note: This represents the opinion of , which is separate from the paper’s news operation.

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Colorado lawmakers can do better than Proposition CC. We recommend voters mark “no” on their ballots when they arrive in the mail next week and send this complex problem back to the General Assembly for another try.

The ballot question would allow the state, forevermore, to retain and spend revenue above the arbitrary cap set by the Taxpayer’s Bill of Rights. If the ballot measure fails, that money will be returned to taxpayers through a temporary reduction in the state’s income tax rate, which is at 4.63%.

According to the September revenue forecast, which could still change, those refunds are anticipated to be $274.1 million in the fiscal year 2018-19; $186 million in fiscal year 2019-20; and $383 million in fiscal year 2020-21. That money could do great things for this state if voters say yes to Proposition CC. However, we only get one shot at spending these dollars, and lawmakers simply missed the mark, especially given that this is going to be the plan for these dollars for the foreseeable future.

For example, a third of the funding will go to public schools, which sounds great. But the money does not go through the normal education funding formula. Instead, the money will be dolled out to school districts on a per-pupil basis, equally across all districts. That may sound fair, but it isn’t. Other state funding for schools is adjusted according to the financial needs of a district — school districts with large local tax bases and strong local revenue sources get less from the state than districts that might lack commercial or industrial taxpayers or that have depressed housing values.

Creating an ever-growing fund of money that is outside the formula will only increase existing disparities. As the funds set aside through Proposition CC grow, so will the distance between school districts that have resources and those that do not. That might be fine for roughly $90 million in 2020 but, barring a recession, it’ll grow year over year, until it’s $500 million and then $1 billion.

Money set aside for higher education also will not go through the typical funding formula for our state-owned universities and colleges. Instead, the money will be put in a separate pot to be allocated by Colorado lawmakers. We can only imagine the intense lobbying effort that will ensue as colleges vie for a share of the money. We fear it’ll be spent on pet projects instead of on reducing the cost of higher education for the next generation of Colorado students.

The final third of the money would go to roads, bridges and transit projects.

Had this proposal come with a sunset date, say five or 10 years from now, we’d be much more likely to support it. We’re frustrated because unlike other opponents, we support the general premise of the request. The state does need additional revenue and voters have repeatedly rejected other tax increase requests — income tax increases for education and a sales tax increases for transportation infrastructure. So it makes sense to ask voters if the state can simply retain money already collected under its existing tax rate but that exceeds the TABOR limit.

TABOR’s spending limit is based on a formula that accounts for population growth and inflation. However, it is not keeping up with the cost of providing services to Coloradans. For years, the state has deferred maintenance to roads and bridges due to inadequate funding, and now Colorado is trying to catch up. During the recession, lawmakers were forced to reduce education funding and despite our strong economy, districts haven’t yet been made whole. And our higher education system is one of the most poorly funded in the nation when it comes to taxpayer contributions.

Yes, the state does need this additional revenue. But it’s also critical that this money is spent like the limited resource it is given voters’ unwillingness to provide alternative revenue sources.

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