Oct 312010
 
Authors: Jim Sojourner

Proponents of Colorado’s three major anti-tax amendments on this year’s ballot are facing what looks like an impossible battle on the eve of Election Day.

According to a Friday coloradopols.com release, more than 60 percent of state voters are either opposed to or leaning toward opposing Amendments 60, 61 and Proposition 101.

Though the polls are stacked against the measures, these three initiatives would have intense consequences for higher education funding, and when vote tallies are finalized later this week 60, 61 and 101 could decide the fate of universities in Colorado.

Each amendment affects state and local finances by reducing taxes and restricting borrowing. In concert, the three would drastically reduce state and local taxes and government revenues and would restructure how Colorado distributes its funds.

Proponents of the measures say lower taxes are important for creating jobs, reining in unnecessary government spending and putting money back in the hands of hard-working Coloradans. But opponents say their passage would effectively end state funding for higher education –– and other funding areas –– altogether. The CSU System Board of Governors opposes all three measures.

Although parts of each of the three measures are implemented over time, their impact on taxpayers and the state would grow over the years. But it’s the long-term forecast that CSU President Tony Frank said would be catastrophic for CSU.

According to Colorado’s Ballot Information Booklet, assuming all three measures passed, once fully implemented the measures would reduce state taxes and fees by an estimated $2.1 billion and would increase state spending on K-12 education by $1.6 billion.

Over time, the state would have to commit 99 percent of its general operating budget to pay for K-12 education as required by Amendment 60, leaving little to no funding for other budget areas that also rely on the general fund, including higher education.

“The simple fact is if these three pass, there isn’t any general fund for anything but K-12,” Frank said.

As state higher education funding has dwindled in recent years, CSU has raised base tuition costs at least 9 percent each year since 2007. Frank said if the three anti-tax measures were to pass, CSU would have to raise tuition an additional 9 percent annually just to make up for the loss of state funding.

The final result of the measures, he said, would be the defunding of higher education in Colorado and an end of state funding for CSU.

“If these three pass, CSU would essentially be privatized,” he said.

Amendment 60

Amendment 60 changes parts of the state’s property tax system to reduce property taxes paid to school districts, counties, special districts, cities and towns.

It gradually reduces school district property taxes over 10 years and requires the state to backfill the money school districts would lose as a result of the tax cuts.

When the measure is fully implemented, according to the state voter guide, the state’s obligation for funding K-12 education would increase by an estimated $1.5 billion. The average homeowner would pay $376 less in taxes per year, and the average business would pay $5,106 less per year.

In addition, Amendment 60 would repeal the current voter-approved authority of local governments to raise property taxes above their constitutional limits and would repeal local voter-approved tax increases across the state.

According to a letter from the National Taxpayers Union supporting the Colorado anti-tax group Colorado Tax Reforms, Amendment 60 would “enact common-sense reforms” by ending property tax hikes that violate voter-approval laws and allow citizens to petition their local governments for ballot issues to lower taxes.

Colorado Tax Reforms website states that Amendment 60 reduces tax burden and puts control of earned income back in the hands of taxpayers. In addition, it says K-12 education will not suffer as a result of the amendment since the government is required to replace 100 percent of the money schools would lose.

But opponents of the measure say that, in order to pay its eventual $1.5 billion commitment to K-12 education, the state will have to cut its funding lines to areas like transportation, prisons and higher education. The colossal backfill, they say, would ultimately defund other funding lines that depend on the state’s general fund.

Amendment 61

Amendment 61 would place new restrictions on the state and local government’s ability to borrow money.

According to the voter guide, governments currently borrow money for large public improvement projects for things like roads, buildings and airports. Beginning in 2011, Amendment 61 would prohibit all borrowing by the state government and put restrictions on borrowing by local governments by requiring voter approval for any borrowing.

It also requires that taxes be reduced by the amount of the average annual payment on certain borrowed money after that borrowed money is repaid in full.

The voter guide says that, assuming the tax-reduction requirement applies to current borrowing, once the measure is fully implemented state taxes will be reduced by $200 million. Local government taxes would see a reduction of $940 million when all borrowing is repaid, which could take up to 40 years.

Proponents of the measure argue that limits on borrowing are necessary because borrowing encourages fiscal irresponsibility and is expensive due to interest payments and fees. Limiting borrowing encourages fiscal restraint, makes the voters responsible for local borrowing and, ultimately, further reduces taxes.

“If someone stole your wallet, you’d yell, Stop, thief! If he ran up credit card debts, you would cancel the cards. Theft of credit is what politicians are doing to you now. You must act to stop them. Amendment 61 ends their unlimited access to your credit card,” Colorado Tax Reforms website says.

Opponents, meanwhile, argue that borrowing is critical for large-scale projects that benefit all citizens because borrowing is the only way governments can afford to maintain public infrastructure like roads, bridges and public buildings. In addition, they say Amendment 61 would cause serious financial disruption in programs like unemployment, where the government may be unable to pay unemployment benefits for periods of time if it cannot borrow to pay for those benefits.

Proposition 101

Proposition 101 would reduce the state income tax and eliminate or reduce vehicle fees and taxes, eliminate or reduce state and local telecommunication fees and taxes and require voter approval to create or increase fees on vehicles or telecommunication services.

The state’s income tax rate would drop from 4.63 percent to 4.5 percent in 2011 and down to 3.5 percent over time, dropping by 0.1 percent per year in years where state income tax collections grow by more than 6 percent, according to the voter guide.

The measure sets car registration fees at $10 and reduces an array of other vehicle fees and taxes including sales tax and specific ownership taxes.

Proposition 101 also eliminates state and local sales tax and other fees for any telecommunications service, except for existing 911 fees, which would be frozen at their 2009 level, the voter guide says.

Although in the first year the tax and fee reductions are expected to total 1.4 billion, once fully implement the measure is expected to reduce taxes and fee collection by $2.9 billion.

Proponents of Proposition 101 argue that allowing citizens and businesses to keep more of their earned money strengthens the economy and say that Proposition 101 requires state and local governments to eliminate unnecessary spending because the amount of money they bring in will be reduced.

Colorado recently increased vehicle registration fees by $220 million, the voter guide says, –– an average of about $44 per car –– circumventing existing laws requiring the government to get voter approval for tax increases. Proposition 101, proponents say, forces the government to seek voter approval rather than just increasing fees and simplifies fees across the state by reducing vehicle registration to a flat fee and ending taxes and fees on phone and cable bills.

Opponents argue that Coloradans depend on the services that state and local governments provide including education and transportation systems. They say the reduction in state revenue would force the state to reduce services like transportation system maintenance, public health and safety and higher education funding that have already seen cuts due to the economic recession.

Managing Editor Jim Sojourner can be reached at news@collegian.com.

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