After Gov. Jared Polis announced Saturday that he would allow petition-gathering by mail and email, the conservative Independence Institute think tank in Denver announced a petition drive Monday to ask voters in November to reduce the state income tax rate from 4.63% to 4.55%.
Initiative 306 is backed by a group called Energize our Economy, and it's more timely than ever, said proponent Jon Caldara, president of the Independence Institute (and a Colorado Politics contributing columnist). The coalition also includes Colorado Rising State Action, Unite for Colorado and Americans for Prosperity.
The measure runs counter to Initiative 271, which would lower the rate to 4.58% for those earning less than $250,000 and raise it to 7% on earnings above that up to $500,000.
The aim of No. 271, promoted by Carol Hedges of the Colorado Fiscal Institute, is to raise $2 billion a year to balance the state budget, post-pandemic
Supporters of both initiatives will have to collect 124,632 signatures from registered Colorado voters to qualify for the ballot in November.
“We think that a small tax cut for everyone makes a lot more sense than a $2 billion tax increase,” Michael Fields, executive director of Colorado Rising State Action, said in a statement. “And even if both pass, the tax cut only has to win by one vote over the tax hike to be implemented, so we like our chances.”
Caldara said Colorado's "on fire" economy could be attributed to the state constitution's Taxpayer’s Bill of Rights and Colorado's flat state income tax.
“We look forward to giving the voters a real choice between a progressive tax increase, which will be billed as a middle-class tax cut, and a real tax cut for every Coloradan," he stated. "Question is: which one is actually the tax cut? Hint: Not the ballot question that starts “Shall state taxes be increased $2 billion annually.”
State Sen. Jerry Sonnenberg, a Republican from Sterling, is a prime supporter of the measure to lower the income tax rate. Caldara and Sonnenberg officially filed the ballot measure paperwork with the Secretary of State's office last month.
“Small business owners all over Colorado are feeling the pain of these shutdowns, and their incomes have suffered as a result,” Sonnenberg said in a statement released by the Independence Institute on Monday. “In many rural communities, there are no big-box stores, just small businesses. An across-the-board income tax rate reduction will allow these business owners and their employees to keep and spend more of their own money.
"State government doesn’t need to increase its already bloated budget.”
Jesse Mallory, the state director of Americans for Prosperity, said, “The question is simple: who needs your money most right now, you or the government? Colorado voters should have that choice in November.”
The same coalition also is collecting signatures for ballot initiative to require fees to gain voter approval, the same way they do tax increases under the Taxpayer's Bill of Rights.
“For too long, politicians have used fees as a way to circumvent taxpayers and grow state government. Large fees pose the same threat to family budgets and our economy as significant tax hikes,” Unite for Colorado CEO Dustin Zvonek said in a statement. “Coloradans have the right to vote on new or higher taxes, we should have the same right when it comes to significant new fees.”
Initiative 295 would apply to new state enterprises of $100 million or more over its first five years.
Scott Wasserman, president of the Bill Policy Center think tank and a supporter of Initiative 271, pushed back on tax cuts that would benefit the wealthy.
"It's as though they were looking at looking at the giant funding hole our communities are bracing for and thought it needed to be $160 million deeper," he said. "Honestly, who does that? If this passed, the budget hit would be the equivalent of the state’s contribution to Adams 14, Westminster, Littleton and Mapleton school districts combined.
"This is a reckless tactic to try and confuse voters about the fact that we can 95% of Coloradans a tax cut, ask a little more from the wealthy, and actually repair our budget in the process. Coloradans don’t deserve to be trolled on the ballot like this."