Opponents of ballot measures that would reduce Colorado’s state income tax rate and require voter approval of some state enterprises say the measures would hamstring what they say is already depleted revenue for state government.
Colorado voters will decide on Proposition 116, the State Income Tax Rate Reduction initiative, which would reduce the statewide income tax rate from 4.63 percent to 4.55 percent. They’ll also decide on Proposition 117, the Require Voter Approval of Certain New Enterprises Exempt from TABOR Initiative, which would require voter approval for any new state enterprises projected to collect over $100 million in fees or surcharges in their first five years.
The issues committee Protect Colorado’s Recovery, which opposes both measures, held a discussion Thursday detailing their opposition.
Sen. Dominick Moreno, D-Commerce City, who serves as vice chair on the General Assembly’s Joint Budget Committee, argued the ballot measures would “continue to make it even more difficult to respond to the needs of our communities,” noting that $3.3 billion was cut from the state’s budget because of the economic recession caused by COVID-19.
“They are designed to strangle the state government and not allow us to serve the communities that need it the most,” he added.
Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative, said both measures would put the state “in the other direction as far as health care goes.”
Fox also questioned the wording of Proposition 117, suggesting it could affect existing enterprises, something the measure’s backers deny.
“There are way too many unanswered questions about how Prop 117 is going to affect enterprises, especially those that already exist — and that is where it starts to really raise the risks for health care,” Fox said.
Lindsey Singer, spokesperson for the conservative advocacy group Colorado Rising State Action, which backs both measures, said Proposition 117 “won’t impact existing enterprises at all.”
“We’ve been clear that it’s only for NEW state enterprises from the very beginning, the ballot language makes that clear, the blue book makes that clear,” she said.
Legislation passed in 2009 required the state of Colorado to collect fees from hospitals, which were matched with federal funds then distributed back to hospitals for uninsured patients and those with Medicaid. In 2017, the legislature chose to reclassify the program as a state-run enterprise.
The ballot measure language asks voter approval for “any newly created or qualified state enterprise that is exempt from the Taxpayer’s Bill of Rights … if the projected or actual combined revenue from fees and surcharges of the enterprise, and all other enterprises created within the last five years that serve primarily the same purpose, is greater than $100 million within the first five fiscal years of the creation or qualification of the new enterprise?”
A state fiscal report on Proposition 116 estimates the state’s general fund would see a $158.4 million revenue reduction in fiscal year 2020-21, and a $169.8 million reduction in fiscal year 2021-22, if the measure were to pass.
“Our economy can’t start to recover until individuals and families feel secure again, and we think letting people keep more of the money they earn is a good step to make that happen,” Singer said of both ballot measures.