Here in Colorado, it's getting more and more frustrating to see the games political groups play with our ballot initiative process. It's even more frustrating that our state never seems to have the resources it needs to deliver the kinds of services we want or need. When we look at Proposition 116, a proposed tax cut on the 2020 ballot, we need to ask a simple question: Who exactly wins if this passes? Unless you are among the top 3% of earners in the state, the answer is not you.
By cutting our state income tax rate from 4.63% to 4.55%, an average Colorado taxpayer will see a $40 savings in their state tax bill while those who make $1 million will see $800 in tax breaks. In fact, out of the $154 million it will cost us to pay for this tax cut next year, 55% of it will go back to the wealthiest 3% of residents in our state. If a millionaire gets $800, just imagine how much a billionaire will get back.
If Proposition 116 passes, our elected legislators — who have already slashed 25% from our state budget due to the COVID-19 recession and must make similar levels of cuts next year — will have to figure out how to cut an additional $154 million from the things we all rely on. While this amount may sound small in the context of a multibillion-dollar budget, their options will add insult to injury for many of us. The additional amount they’ll need to cut is the same amount as it costs to pay for the Senior Homestead Exemption, a property tax relief program that helps many older Coloradans stay in their homes. It's two-thirds of what it costs us to provide full-day kindergarten. It's more than what Colorado Springs School District 11 receives from the state. It's more than enough to pay for a consistent stream of road projects, like the widening of I-25. All of these funding priorities were hotly debated and barely survived the chopping block last year.
In any of the scenarios our representatives choose if this measure passes, the lives of Coloradans — be they older adults, commuters, or children — will be disrupted and likely made even more expensive than they are now. And for what? So our tax code can be even more unfair than it is today and billionaires can reap bigger benefits we all agree they don’t need? So the people who need the most relief in this tumultuous time get the least?
We all know there is a bigger debate we must have about whether Colorado’s tax system is meeting our values and aspirations as a state. This is not that debate. Instead, this is a blind grab from our biggest area of public need to the benefit of our wealthiest residents for the purpose of scoring political points. Why else would you propose a tax cut, not say how you’ll pay for it, and force our elected leaders to make even more painful choices than they already have to? Our recovery from this economic crisis depends on us investing in one another, not 97% of us helping the wealthiest in our state grow their stock portfolios.
The backers of Proposition 116 are playing a very cynical game, believing the best way to shrink our government is to convince us that $40 more in our pockets is better than having schools, roads, and other services we can all be proud of. As voters, we have the power to say enough is enough. The wealthiest among us shouldn’t be getting a big tax cut at the expense of the community investments we all count on. Vote no on Proposition 116.
Scott Wasserman has 20 years of experience working on Colorado's public policy issues and is president of the Bell Policy Center.