A new study released by the REMI Partnership finds that without any guarantees of improvement in student performance, the $1.6 billion tax increase proposed by Initiative 73 will negatively impact the Colorado economy, cost private sector jobs, and place a significant tax burden on Coloradans.
The study, “Amendment 73: The Economic Impacts of a $1.6 Billion Increase to Spend on Education,” evaluates the impacts of the tax and spending increases proposed by Amendment 73 as well as performance impacts and the net economic impact.
“I am very passionate about PK – 12 education as it is the single most important foundation for the future and an investment in our great state and country,” said Buz Koelbel, Vice-Chairman of the Common Sense Policy Roundtable Board of Director. “Unfortunately, Amendment 73 is not the answer. With no guarantee or defined expectation of improved student performance, this measure represents a massive tax increase, much of it on the backs of small businesses that will cost jobs and cause negative repercussions across our economy.”
Amendment 73 proposes a $1.6 billion tax increase to fund education. The initiative raises multiple concerns including changing Colorado’s flat individual income tax rate to a graduated income tax for income above $150,000, increases the corporate income tax rate, significantly changes residential and commercial property taxes, and locks this entire burden into our state’s constitution. The measure does not propose to deliver better results or outcomes for educational achievement or clearly define where the money will be spent.
“This measure would immediately move the top marginal rate from 37th lowest to 8th highest amongst states with an income tax, an enormous 80% increase from the existing rate,” continued Koelbel. “An increase of this size will have significant negative consequences while jeopardizing Colorado’s competitive advantage.”
According to the study, with no performance impacts, over the next 20 years the average annual loss of private-sector jobs is over 11,400. The average annual impact on state GDP is a loss of $850 million and disposable personal income is estimated to be lower by $1.8 billion on average annually.
“In addition to increasing the individual tax burden, Amendment 73 would also raise the corporate tax rate a staggering 30% from 4.63% to 6%,” said Mike Fitzgerald, President of the Denver South Economic Development Partnership. “This increase will stifle our economic growth. We know the overall tax burden of companies is a key driver in decisions surrounding where to locate, invest and hire.”
Read more about our latest study here.
About the REMI Partnership: Common Sense Policy Roundtable, Colorado Concern, Colorado Association of REALTORS, Colorado Bankers Association, and Denver South Economic Development Partnership have partnered to develop independent, fact-based analysis that quantifies the broader economic impacts associated with policy changes. The partnership has provided Colorado lawmakers, policy makers, business leaders, and citizens with greater insight into the economic impact of public policy decisions that face the state and surrounding regions. Read more about our latest study here.