The biggest tsunami in Colorado’s midterm election may be the passage of Amendment 87 and Proposition NN. Amendment 87 squeaked by with 51.6% YES to 48.4% NO, while NN sailed through with 57% YES to 43% NO. These two results took Colorado’s 34-year-old TABOR system to the woodshed. Amendment 87 replaced the state’s nearly 40-year-old flat income tax with a graduated income tax, while NN allows the state to retain some of the “excess” revenue that otherwise would be refunded to taxpayers. Together, they fundamentally change Colorado’s fiscal landscape.
Some wealthy individuals and highly profitable businesses may be unhappy with this economic wave. But parents seeking affordable childcare, low-income Coloradans needing medical support and students wanting better-resourced public schools can applaud.
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Members of the legislature’s Joint Budget Committee (JBC) are no doubt breathing sighs of relief. The state faced a budget shortfall of approximately $1.6 billion, including a $500 million Medicaid deficit. Amendment 87’s additional revenue won’t eliminate those problems, but it offers substantial help.
Legislators concerned about too much government spending will be on high alert, as they should be. This money needs maximum oversight and intelligent distribution. The dollars must not be wasted. If they are, there will be hell to pay because the money has been so long in coming into the state’s coffers.
The fiscally conscientious can also breathe easier knowing neither measure eliminates voters’ power to approve future tax increases.
The importance of that voting power showed up sharply in Jefferson County, where the school district’s $73 million mill levy override, 5A, is trailing by just three votes in the latest reported count. The money would support salary increases, teacher recruitment and retention and targeted education programs.
The intersection of Jeffco’s 5A with statewide Amendment 87 and Proposition NN is interesting. Colorado voters approved substantial new state funding for public services, while Jeffco voters are virtually evenly divided over raising their own property taxes for schools. The distinction may say something about who voters believe should pay for public education.
As school districts lose students and close schools, Colorado’s education finance system faces increasingly difficult questions. Dollars largely “follow the student,” but the costs of maintaining schools, transportation, special education and other programs don’t decline proportionately with enrollment.
NN and 87 give lawmakers and educators an opportunity to re-envision how education dollars should be distributed. The goals should include better teacher compensation, more support for special education and additional resources for low-income students and English-language learners. Colorado needs to make progress toward closing the stubborn opportunity gap between low-income and more affluent students that has stymied the state for decades.
Medicaid funding has vexed lawmakers for years under the push and pull of increasing need and decreasing revenue. Those needs range from medical care for babies and children to home care for aging adults and people with disabilities. The new money will give a new lens to how to balance Medicaid funding across generations.
Childcare is the third leg on the funding stool. COVID demonstrated how conflicts between childcare and employment disproportionately affect working women, pushing many out of the workforce. High childcare costs and limited availability constrain women’s employment and working hours. Colorado’s universal preschool program is a start, but it doesn’t solve the problems of families needing full-day care or care for children younger than four. Meanwhile, federal funding reductions threaten programs such as Head Start.
Some in the business community opposed Amendment 87 because higher taxes could affect investment, jobs and Colorado’s competitiveness. But supporters argue more affordable childcare can strengthen the economy by allowing parents, predominantly women, to work more consistently during their prime earning years.
Another question is how supporters assembled the votes needed to pass these measures, especially Amendment 87.
Democratic voters exceeded their share of registrations by about four percentage points, while Republicans exceeded theirs by roughly two. Unaffiliated voters accounted for about 46% of ballots, below their 51% share of registered voters. The electorate leaned more Democratic than the registration rolls, potentially providing an advantage to 87 and NN.
But why did NN outperform 87 by more than five percentage points? The difference probably comes down to the bigger ask: 87 changes how taxes are collected and increases the state’s revenue, while NN changes how much of the revenue already collected can be retained.
Two additional factors deserve attention. Women cast five percentage points more ballots than men. Voters over 55 accounted for 46.5% of ballots, while voters ages 18 to 34 accounted for 21%. The higher turnout among women suggests their participation provided the push carrying 87 over the finish line and contributed to NN’s comfortable victory. Certainly, women of all ages whose time and energy are consumed by caregiving responsibilities stand to benefit substantially and directly from the additional tax dollars flowing into the state’s coffers.
Colorado voters have changed how the state can raise and retain money. It took decades to make this change. Now legislators in both parties face a specific challenge: deliver on the initiatives’ promises and demonstrate that this public investment can produce greater prosperity for Coloradans.
Paula Noonan owns CapitolCommons.ai, the state’s premier legislative tracking platform.