Colorado’s electorate gave political masterminds a lot to think about on Nov. 5, when voters rejected ponying up tax money for education and transportation, while approving money for water projects by passing a tax on sports gambling. • Tax measures passed on the local level across the state, funding education, transportation and a raft of other needs, but where Colorado goes next on the issue as a whole still floats on political winds that are prone to change direction. • Proposition CC, the latest and greatest challenge to the Taxpayer’s Bill of Rights in the state constitution, was defeated by more than 135,000 votes.
The tax issue galvanized and motivated a Colorado conservative base still reeling from a pummeling in statewide races last year.
That raises new questions about whether those who would like to fully repeal TABOR — the exceedingly complicated measure that limits government spending — are willing to chance putting it on the ballot during next year’s presidential campaign, featuring a U.S. Senate race that could tip the balance of power in the nation’s capital.
“I have no idea,” said House Speaker KC Becker of Boulder, the chief architect of Proposition CC, when asked what happens next for those whose ultimate goal is to repeal TABOR. “You know, in Colorado any citizen can work to put something on the ballot. I don’t think you’ll see something like that out of the Legislature, at least not now.
“I know that there are groups and people that understand how badly we’re funding K-12 and higher-ed and roads, and they’re going to keep trying to solve that problem. So if this isn’t the solution, not raising taxes, if that’s not the solution, they’re going to keep proposing tax increases because this is an unsustainable path.”
Her counterpart in the House, Republican leader Patrick Neville from Castle Rock, said the opposition isn’t going anywhere.
“This sends a message,” Neville said, teeing up an oratory. “To those who threaten the rights of Colorado taxpayers: We will not fold. We will defend the Taxpayer Bill of Rights against socialist bureaucrats and politicians. Last year, the Colorado House Republican caucus took on Proposition CC head-on, with every member of the caucus voting in opposition.”
Pundits’ crystal ball
Colorado’s top pontificators — right, left and center — agreed that the road ahead is a curved path, given Nov. 5’s resounding defeat for Proposition CC and the narrow passage of Proposition DD, which established a tax that sports gamblers will pay to fund water needs every Coloradan depends on.
The X factor in the latest statewide ballot questions was one of passion, said independent political analyst Eric Sondermann, a Colorado Politics columnist.
That gave a puncher’s edge to Republicans, who were still smarting from last year’s midterm races and a progressive agenda at the state Capitol ever since.
The question is whether the right can sustain momentum and whether Democrats can regain their Colorado mojo.
Sondermann said Coloradans, however, vote differently on candidates than they do on taxes, favoring Democrats as officeholders while rejecting their ideas on more taxes for schools and roads.
“I think Colorado is a blue state these days, but light blue, not dark blue,” he said.
But voters routinely still support giving up their TABOR benefits for local projects, which makes the crystal ball on tax issues even more cloudy, however.
“Voters want to support their locality,” Sondermann said. “They don’t want to give it to the black hole of state government.”
Pollster Floyd Ciruli, the director of the University of Denver’s Crossley Center for Public Opinion Research and a 9News analyst, said the last off-year election with this kind of state turnout was 2013.
That was the year conservatives were impassioned by Democratic control of the legislature and the governor’s office, the same dynamic as this year — and next.
Voters in 2013 resoundingly rejected Amendment 66, which was a billion-dollar income tax for education, by a two-thirds majority. The next year, Republicans took the majority in the Senate, which they lost in 2018.
“There was a strategic issue here,” Ciruli said. “I think Republicans realized if they were ever going to come back from the debacle of 2018, it would be around a tax issue.”
Conservatives turned out voters, whereas Democrats — despite ample campaign cash — couldn’t stir up that kind of passion.
“Republicans just turned out,” Ciruli said. “I think it’s a setback for Democrats. I think they go into the 2020 election now a bit on the defense.”
Off-year for Democrats
Scott Wasserman, the director of the left-leaning Bell Policy Center who used to be a chief adviser to Gov. John Hickenlooper, was circumspect.
He certainly didn’t think Proposition CC rendered the final verdict on Colorado tax policy, when the needs are so enormous for schools and transportation.
“This was one election in an off year,” he said. “For Republicans this was clearly a proxy fight for their future in this state, and I think they used it for that. For them, this was a great opportunity to turn voters out.”
He said their message about protecting TABOR, though, was going to ring hollow soon enough.
“The needs that we have are not going to go away,” Wasserman said. “And at the end of the day, TABOR is a constitutional amendment that was passed by Doug Bruce in 1992, and if the rallying cry going into 2020 is protect TABOR versus care about your community, your schools and your roads, I think that’s a losing message for them.”
Owens, the former Republican governor, didn’t see the future the same way.
“This was the most vulnerable part of TABOR,” he said of the occasional rebates the growth limit provides. “The real popular side of TABOR is voting on every tax increase. This means my friends in the Democratic Party would be crazy to come back after this issue again.”
When Gov. Jared Polis weighed in on the outcome of the latest tax measure to lose statewide, he zeroed in on transportation and gave education a free ride.
The governor pointed out that voters had rejected taxes for transportation before, but made no mention of losses for the signature issue, education.
Polis is asking for $550 million from state lawmakers for transportation in the legislative session that begins in January.
Sandra Hagen Solin, who works for the coalition of civic and business groups called Fix Colorado Roads, said Proposition CC was a mild remedy to huge transportation needs across the state that aren’t going anywhere. An estimate by former Gov. John Hickenlooper’s highway department put the needs at $9 billion over the next decade.
“Prop CC was never the fix for funding Colorado’s roads,” she said. “The outcome tells us we need to be mindful about how we address the very real challenge that exists on our roads. Coloradans are clearly expecting solutions from available resources and existing avenues. Let’s give it to them.”
Denver voters on Tuesday night overwhelmingly supported Referred Question 2A, which transforms the Department of Public Works into a Department of Transportation and Infrastructure and is key to Mayor Michael Hancock’s $2 billion Mobility Action Plan. The new department will be “better aligned to achieve the goals laid out in the plan,” mayor’s office spokesman Michael Strott said.
Specifically, the cabinet-level department is intended to help reduce single-occupancy vehicle commuters by encouraging shifts to alternative, cleaner modes of transportation; cut transportation-caused carbon pollution; encourage and increasing electric-vehicle usage; and make Denver’s transportation network safer.
“The new charter language better articulates our department’s responsibility for developing multimodal transportation networks, gives us the ability to complement and expand existing transit services, and more clearly emphasizes our role in supporting Denver’s Vision Zero program toward a safer transportation system for all users,” said Eulois Cleckley, the current head of Public Works, in a statement to Colorado Politics.
Cleckley was tasked with overseeing the transition and may become the new department’s director.
A trickle for the water plan
May 1, 2020. That’s the day eager Coloradans who want to bet on sporting events can start placing wagers.
Unofficial results show Proposition DD, which would legalize sports betting in the three towns that allow casino gambling, passing by a margin of just over 1.5%, or about 22,000 votes (as of Nov. 6).
And while Teller County, home to one of those three towns, voted against Prop DD, it was to no avail. Voters overwhelmingly approved separate municipal ballot measures in Cripple Creek, Central City and Blackhawk on Election Night that would allow their casinos to offer sports betting, including online games.
Colorado joins at least 19 other states that are in the gold rush toward sports betting since the U.S. Supreme Court ruled in 2018 that federal prohibitions against it weren’t legal. (Nevada has allowed it since 1949.)
It’s been lucrative. In New Jersey, which brought the legal case that led to the high court’s decision, monthly wagers have topped $385 million, with $16.8 million in tax revenue.
West Virginia began its sports betting last December, and taxes sports betting at 10%, the same rate Colorado plans to use. Its wagers have been as high as $42.6 million, which took place last December, and that generated $5.5 million in tax revenue. The state took in about $16 million in total tax revenue between Sept. 2018 and July 2019.
Colorado’s Prop DD limits annual tax collections to $29 million. House Majority Leader Alec Garnett of Denver, one of the sponsors of House Bill 19-1327, said that figure was chosen because it’s unlikely the state would gain any more tax revenue from that, at least for the foreseeable future.
The fiscal analysis for HB 19-1327 estimates up to $11.2 million in tax revenue from sports betting in 2020-21. Revenues in 2019-20 and 202-21 would first pay for the startup costs to the Division of Gaming. The next check would cover annual administrative expenses for the Division of Gaming, part of the Department of Revenue.
Six percent of the tax revenue goes into a “Hold Harmless Fund” intended to cover revenue losses that could come from bettors switching to sports betting versus casino games. Casino taxes provide funding to the community college system, the state historical fund and the three towns and two counties that rely upon tax revenue from the casinos.
An additional $130,000 would go to the Office of Behavioral Health within the state Department of Human Services, to pay for gambling addiction programs.
What’s left would go to the Water Plan Implementation Cash Fund, which would provide grants for water projects and would be administered by the Colorado Water Conservation Board. Proposition DD creates the first-ever “permanent, dedicated funding source for the water plan,” Ris said Wednesday.
It’s unlikely that any water projects tied to the water plan will see any of that money until 2021, according to Lauren Ris, CWCB’s deputy director. That’s because the state appropriations process still will play a role in determining when the money from DD will start flowing. Given that betting doesn’t start until nearly the end of the 2020 session, the tax revenues that come in won’t likely be appropriated until the following year, she explained.
The CWCB already has a grant fund for the water plan that’s been in existence for three years. Projects funded through that grant program are tied to an annual CWCB projects bill that is passed every year by the General Assembly.
A CWCB construction fund has been funneling money into the water plan, but that will come to an end with the funding from Proposition DD, Ris explained. That’s because the construction fund, which provides loans for water projects, was never intended to fund the projects identified in the water plan.
The amount of money is expected to start at around $6 million and when sports betting matures in a couple of years, up to $15 million. That will allow the CWCB to give grants for multi-year projects, since many of the major ones will need that level of funding.
“All of the criteria for the grants are spelled out” in an accompanying bill that also passed in the 2019 session, Senate Bill 19-212, a JBC-sponsored bill, Ris said. SB 212 says that grants would cover no more than 50% of the total cost of a project.
Sports betting alone won’t fill the need to fully fund the the water plan, said Democratic state Sen. Kerry Donovan of Vail, another sponsor of HB 1327.
“We tried to be clear that DD was a down payment,” she said. Donovan said the election results Tuesday showed the state’s funding challenges, and that those conversations will continue around big dollar projects in education, transportation and water.
But she hopes that the election also elevated the conversations.
“As a rancher and West Slope native, we’ve seen the impacts of climate change and growing population,” Donovan said. “The burden of supplying water for both will fall squarely on the shoulders of the western slope.” But the passage of Proposition DD “shows a willingness of the entire state to say ‘we will invest in water and believe it is a priority.’”