Referenda C and D

 Uncategorized
Sep 062005
 
Authors: Chris Kampfe

Finally backed into a corner, state legislators have taken a dilemma to the voters: What to do about the Taxpayer's Bill of Rights (TABOR), a device worked into the state constitution that restricts tax increases.

Many attribute the dire financial state of higher education in Colorado to TABOR. Referenda C and D were designed specifically to offer some monetary relief to this and other government services.

Though designed to be a Band-Aid of sorts to TABOR, passage of Referendum C would not structurally change it or the state constitution. Referendum C is a motion to allow the state to retain some tax refunds from Colorado taxpayers.

The funds collected will go primarily to K-12 education, health care and higher education. While the referendum is asking people to forego some tax refunds, they are not inherently raising taxes.

Over the next five years, Referendum C would collect roughly $3.1 billion in tax refunds, as well as an additional estimated $100 million for a sixth year.

Referendum D hinges on the passage of Referendum C and would allow the money collected to be distributed to different public services in the form of bonds. The main funding recipients from Referendum D include schools, bridges and highways, health care and police and firefighter retirement plans.

If the referenda are passed, some of the surplus from taxes will be used to finance a tax refund beginning in 2011. In 2011 the income tax rate will be lowered from 4.63 percent to 4.5 percent.

If passed, the referenda will take effect in 2006 and remain effective through 2010.

Information from:

The Colorado Municipal League

The Colorado Fiscal Policy Institute

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