This article originally appeared on heartland.org.
Colorado voters on Tuesday crushed Amendment 66, a ballot initiative that sought to raise the state’s income tax $1 billion a year to pour more money into grade schools and high schools.
The measure lost by a 66.2 percent to 33.8 percent margin.
“We congratulate Coloradans for having the common sense to reject this unnecessary and unjustified tax grab,” said Dustin Zvonek, the Colorado state director for Americans For Prosperity, in a statement. “Passing Amendment 66 would have gravely wounded the state’s economy and business climate, while rewarding a reform-resistant education system with an unearned windfall.”
He added, “Hopefully the governor and other leading liberals will take this as a clear message that Coloradans aren’t ready to see this great state Californianized. The debate over Amendment 66 erased any doubt that we have a typical tax-and-spend liberal in Gov. John Hickenlooper.”
Rejection of Progressive Taxation
Amendment 66 would have changed Colorado’s flat-rate income tax of 4.63 percent to a “progressive” two-tier system: 5 percent on the first $75,000 of income (an 8 percent rate increase) and a 5.9 percent tax on income above $75,000 (a 27 percent rate increase). Officials estimated the tax increases would have taken nearly $1 billion a year more from residents, making it the largest tax increase in Colorado history.
The initiative’s backers included some of the nation’s wealthiest individuals and politicians. These included billionaire Microsoft founder Bill Gates, who put $1 million into the Amendment 66 campaign, and New York’s outgoing mayor and billionaire news media mogul, Michael Bloomberg, who threw in another $1 million. Supporters of the failed measure outspent opponents more than 10 to 1.
Unforeseen Landslide Loss
“Selling a billion-dollar tax increase in Colorado was a tough task, but very few saw this kind of a landslide coming,” said Ben DeGrow, senior education policy analyst at the Colorado-based Independence Institute.
“Ten million dollars bought a lot of promises for education that supporters couldn’t keep, and some suburban voters undoubtedly were concerned that many of their tax dollars wouldn’t return to their local schools and classrooms,” DeGrow said. “The fact that the tax increase went down in flames also shows that Colorado voters understand the importance of TABOR [Taxpayers Bill of Rights] spending limits, and that peeling back constraints on the growth of government spending ultimately wasn’t good for the state’s children.”
DeGrow said the sound defeat of Amendment 66 gives people in Colorado a chance to start a serious conversation about real education reform.
“That means curbing the power of unions and bureaucrats, giving families more quality options, and raising expectations rather than raising taxes,” he said.
Redistribution Scheme’s Demise
Earlier this year Colorado legislators passed and the governor signed Senate Bill 213, which would have raised annual state spending on K-12 schools from about $3 billion to $4 billion, imposed full-day kindergarten, and implemented other changes in the public school system. But SB 213 needed approval of Amendment 66 for implementation.
Opponents argued SB 213 would have gutted local control of school districts and taken money from some school districts and sent it to other school districts, depending on their relative wealth. They also said it was little more than a sop to the entrenched government teachers unions. Much of the additional money would have gone to teacher pensions, teacher and other staff hiring, and pay raises to existing staff.
One of those opponents was Penn Pfiffner, chairman of Kids Before Unions. In an interview with Americans for Limited Government, Pfiffner said, “The voters saw through this very extreme and unwise measure,” and added, “Clearly, Colorado voters took a very common sense approach toward balancing government funding and family budgets.”
DeGrow said the Amendment 66 vote probably helped pro-reform school board candidates win in two of Colorado’s largest school districts: Douglas County and Jefferson County.
“Many fiscally conservative voters turned out in an off-year election to kill a large income tax hike and to support candidates who want to put kids before established interest groups,” he said.
Steve Stanek (email@example.com) is a research fellow at The Heartland Institute and managing editor of two Heartland publications, Budget & Tax News and FIRE Policy News. He has been writing and editing for Heartland since 2003.