A coalition that includes the state teachers’ union on Tuesday launched a campaign for a ballot proposal that would reduce more than $1 billion in taxpayer refunds and spend the money on education.

The measure is among several campaigns taking shape this year over state revenue. Broadly speaking, one side has long sought to raise more money, arguing what the state collects is insufficient to pay for services and programs. The other side counters that current revenues are sufficient but used unwisely, and what policymakers need is fiscal discipline.

Referred to the ballot by the state legislature via Senate Bill 135, the average Colorado taxpayer would lose about $7,300 in TABOR refunds between the 2026-27 and 2036-37 fiscal years if the proposal is approved at the ballot box, according to a nonpartisan analysis.

Educators, teachers and parents gathered at Denver West High School on Friday to announce the campaign’s launch for the measure, which would allow the state to retain revenue above what’s called the Referendum C cap.

Currently, those dollars are refunded to taxpayers.

First, the retained revenue will be used to reimburse local governments for lost revenue as a result of the homestead property tax exemption. Then, the money would be used for K-12 education and other programs that support children. Specifically, for K-12 education, the money must be directed toward teacher pay hikes and retention, smaller class sizes and disability services.

If approved, it would reduce TABOR refunds by $136.1 million in Fiscal Year 2026-27 and by $969.7 million in Fiscal Year 2027-28. The amounts will vary in succeeding years, according to the legislature’s analysis.

“This measure is about fostering a public education system that works for all Coloradans — a system that prepares our children for success, strengthens our workforce, and builds healthier, more prosperous communities across Colorado. We believe voters will choose to invest in our kids, our families, and our future by voting Yes on Proposition NN,” Colorado Education Association President Kevin Vick said in a statement.

Colorado Association of School Boards Vice President Nancy Hopper said the state’s chronic underfunding of education is making it increasingly difficult for school districts to ensure every student in Colorado has access to a high-quality education.

“Proposition NN gives districts the resources to better recruit and retain outstanding teachers, reducing turnover and providing students with the consistency they need to succeed,” Hopper said, adding that education is one of “the smartest long-term investments Colorado can make.”

Sen. Jeff Bridges, D-Greenwood Village, who chairs the legislature’s Joint Budget Committee and was a prime sponsor of the bill, earlier argued that, without it, the state would have had to cut billions of dollars from its budget, including K-12 education.

Opponents of the measure countered it could permanently end TABOR refunds. A report by the think tank Advance Colorado called the measure’s language misleading, arguing it obscures the long-term impact on TABOR refunds and overall government spending authority.

“Once voters authorize the state to retain excess revenue, those
refunds are effectively eliminated indefinitely, not just during that initial ten-year window, due to the open-ended nature of the measure,” wrote Elizabeth Caven, the organization’s outreach director and policy analyst.

A nonpartisan analysis requested by Sen. Barbara Kirkmeyer, R-Brighton, who sits on the Joint Budget Committee, found that about 75% of TABOR refunds wouldn’t actually go to schools under Proposition NN. Instead, they would go to the state’s general fund — to be used by lawmakers for whatever purpose they choose.

Kirkmeyer also alleged that under the measure, lawmakers could more than double the amount of fees that exist now as long as revenues remain below the proposed cap.

“So much for affordability in the state of Colorado,” she said.

Bridges countered Kirkmeyer’s allegations, saying the nonpartisan analysis is a “best-case” scenario and doesn’t show what would occur in case of a recession, something state economists say has about a 50-50 chance of taking place in the next couple of years.

If lawmakers do nothing, he said, the state will not be able to fully fund education under the school finance formula, which they approved in 2024.

“We do not have the funds to increase K-12 funding,” he said.

Proposition NN will appear on the ballot in November.

Marianne Goodland contributed to this story.