CFI’s 2020 Ballot Guide

(Note: This guide was updated on October 20 to reflect CFI’s stance on Proposition EE)

If there’s one thing we’ve learned about Coloradans over the last few elections, it’s that we love to vote. In 2018, Colorado lagged behind only Minnesota in a ranking of states with the highest voter turnout, and similar high turnout is expected this year.

Whether we mail our ballots back early enough to be received by 7:00 p.m. on Election Day, hand deliver them at a 24/7 ballot drop box, or even vote in person early or on Election Day (while following public health guidelines), Coloradans make a difference for our communities when we have our voices heard by voting. Visit GoVoteColorado.com today to check to make sure your registration is up to date or to get registered.

Having our voices heard by voting is especially important because, in addition to voting on candidates for federal, state, and local offices, we’re also usually asked to weigh in on important policy questions in the form of ballot measures. This year is no different with 11 statewide measures. If you’re looking for more information about all 11 measures, be sure to check out Count Me In, an effort that looks to empower and educate voters about those 11 measures without taking a position on them either way.

The Colorado Fiscal Institute has decided to weigh in on four of the 11 measures. This graphic lays out our positions if you need a quick reference:

If you’re looking for more information on why we came to the positions we did, be sure to read the following guide. Thank you for doing your part by voting and learning more about these critical issues that affect all of us—whether we’re Black or white, Asian or Latinx, native or newcomer.

Amendment B – Gallagher Amendment Repeal – Yes

Passed by voters in 1982, Colorado’s Gallagher Amendment required that no more than 45% of the assessed value of all property statewide come from residential property with the other 55% coming from non-residential property. It also set the statewide non-residential assessment rate at 29% and allowed the residential assessment rate to fluctuate to maintain that 45%-55% ratio.

If none of that made sense to you, take five minutes to watch our latest video that explains how the Gallagher Amendment works. Then come right back. We’ll wait since it’s only five minutes.

Up to speed now? Good.

The practical effect of the Gallagher Amendment has been to push down the statewide residential assessment rate. That’s the rate used to determine how much of a home’s value is subject to property taxes which, when multiplied by the value of a home and the local mill levies, is how property tax bills are determined. This is happening because statewide residential property values have risen much more quickly than the value of non-residential property.

In the 1980s and early 1990s, counties and local school districts could just increase their mill levies to make up for the drop in revenue that comes from reducing the residential assessment rate. That all changed in 1992 when voters passed TABOR. Ever since, scores of local mill levy increase ballot measures have been needed just to allow revenue to keep up with Gallagher’s mandated assessment rate decline.

Now, with the residential assessment rate expected to fall to 5.88% from the current 7.15% rate, Gallagher is threatening to force hundreds of millions of dollars in cuts to schools, libraries, fire departments, and other critical services Coloradans are relying on during the pandemic.

There are some tradeoffs. By repealing Gallagher without making any changes to TABOR, we risk opening the door to a situation where the legislature is pressured to lower the non-residential assessment rate while failing to pass a corresponding increase in the residential assessment rate at the ballot (assessment rate increases require voter approval under TABOR rules).

While we’re concerned about the potential for vital revenue going away while local government budgets are as tenuous as they’ve been in recent memory, we support Amendment B because without it we are guaranteed to see drastic cuts.

Proposition EE – Nicotine Taxes – No

(Note: for a more thorough explanation behind our position, please read this blog by CFI deputy director Kathy White.)

This was a tough one for us. Proposition EE is a well-intentioned measure referred by the legislature with two goals in mind: using the tax code to encourage people to quit using tobacco and other nicotine products, and funding preschool for all 4-year-old kids in Colorado.

We do think vaping, which is currently not taxed at the state level, should be subject to taxation. Nicotine products like vaping and cigarettes create poor health outcome for those who use them, and Colorado has the dubious status as the leading state when it comes to teen vaping in particular. Additionally, all kids — whether they’re Black, white, or Brown — should be have access to quality early childhood education.

Unfortunately, both the mechanism for taxing nicotine and the plan to fund preschool are done in a way that is racially inequitable and we are taking a position against this measure.

Tobacco taxes are inequitable in large part because the people who pay them tend to be folks who earn low incomes, a disproportionate number of whom are people of color. Historically racist marketing from tobacco companies also means Black, Indigenous, Latinx and other people of color are more likely to use nicotine products. The spending side of Prop EE is also inequitable because it doesn’t specify that free preschool should first be extended to kids from families who earn low incomes and families of color.

This means the revenue raised from taxing nicotine under Prop EE will be disproportionately paid by Black and Brown people and it will be used to benefit higher income people who are more likely to be white.

Additionally, because the tax is designed to discourage use of the product in the first place, we are concerned about the sustainability of using nicotine taxes to fund the ongoing expense of preschool.

While we support the ideas and goals behind Prop EE, we cannot support it. We hope that, in the future, lawmakers and advocates will center race equity and anti-racism in tax policy debates, while pushing tax policy changes that reflect those values.

Proposition 116 – Reduce Income Tax Rates – No

Prop 116 is the simplest of the four measures in this guide, but it will have drastic long-term effects. The measure would lower Colorado’s current single-rate income tax of 4.63% to 4.55%. It’s very similar to legislative proposals we opposed in each of the past few legislative sessions.

According to our analysis, fully two-thirds of the reduced taxes will go to tax filers making over $100,000 a year. Millionaires alone will get $22.4 million. Prop 116 is so lopsided to the wealthy that the top 1% will get the same dollar amount in reduced taxes as the bottom 70% of taxpayers combined.

We’ve long been opposed to across-the-board tax cuts like Prop 116 because they overwhelmingly benefit the wealthiest people in the state. Due to TABOR’s requirement that all income be taxed at a single rate, lowering income taxes for everyone—no matter how much they make—invariably ends up worsening tax inequities and gives most of the tax reduction to the wealthiest people.

Prop 116 also deepens the legacy of racism in Colorado’s tax code. The vast majority of people in the top 1% are white, and those who earn low incomes—who already pay a larger share in state and local taxes than the wealthy—are disproportionately Black and Latinx. With cuts to education and other critical services at the top of the list if Prop 116 passes, this measure will create more barriers to wealth for people of color.

Colorado has a long way to go before our tax code is fair and equitable. Prop 116 will take us in the exact opposite direction of that goal.

We urge you to vote no, and to join the effort against Prop 116 with Fair Tax Colorado. Start talking to friends and family members about why Prop 116 is wrong for Colorado. Fair Tax Colorado’s website and Facebook page are being updated regularly with new information, so please be sure to take a look and share with your friends and family!

Proposition 117 – Voter Approval of State Enterprises – No

This measure will require voter approval for any new state enterprises that expect to collect over $100 million in fees over the first five years and effectively empty Colorado’s fiscal policy toolbox. An enterprise is a state-run business authorized under TABOR that is not subject to state revenue limits. Some examples of enterprises include the Colorado State Fair Authority, Colorado Division of Wildlife, the Colorado Lottery, and many of our state colleges and universities.

Colorado already has the most restrictive state tax policies in the country. Tax rates can only be increased by voters at the ballot, and organic revenue growth during good economic times is limited by TABOR’s revenue limit formula. Prop 117 expands the restrictions on the state’s ability to support essential activities like education and health care.  We oppose Prop 117 because it removes one of the only tools available to lawmakers to find ways to pay for important public services.

Proposition 118 – Paid Family and Medical Leave Insurance – Yes

The United States is the only large country, and one of only a handful in the world, without any national paid family and medical leave program. Despite the lack of a federal law, some states have stepped up to provide these types of benefits to their residents. Despite these steps, only about 18% of workers across the country currently are eligible to take paid leave. Colorado could join those other states  in providing a basic employee benefit if they approve Prop 118.

Beginning in 2024, Colorado workers would be eligible to get up to 12 weeks off of work to care for themselves or a family member with a serious health condition, to bond with and care for a new child, to care for family in the event of a military deployment, or for safe leave from an abusive partner. An additional four weeks would be available to people dealing with complications from pregnancy or childbirth. Workers who earn the lowest incomes would receive the highest income replacement. The program will be funded with insurance premiums paid by both workers and employers, though small businesses with fewer than 10 employees would be exempt from the employer premium. The program would be run by the state labor and employment department.

We have strongly advocated for paid family and medical leave at the state capitol because we know how important access to paid leave is for equity and economic security over a lifetime. We support this ballot measure because it provides leave that is the most accessible, affordable, adequate, and equitable for all workers. We urge a yes vote. Visit the Yes On 118 campaign to learn more and fine ways to get involved.