They’re coming for TABOR! They’re coming for TABOR! Could be the shout that energizes multiple Paul R.’s this summer, 250 years after the original saw two lights in the tower of the Old North Church, signaling that the British were coming by sea.
TABOR is revered (a timely pun) by many in Colorado, almost entirely because it requires a vote to increase governments’ spending beyond a combination of population growth and inflation, the two believed to be less than what would occur without them.
What’s coming is the possibility of replacing the single state income tax rate of 4.4% with a slate of rates that will hit those at the upper end of the income scale harder and slightly spare those making less. The tax bracket advocates haven’t finalized the specifics, but their proposals range from 3.7% to 8.4% or 9.5% across six brackets. The highest rate, if 9.5% is chosen (which would apply to incomes over one million dollars, also uncertain), would be slightly more than twice the current rate.
What’s raised would be directed to PreK-12 public education, child care and health care, and perhaps early childhood education, according to organizers.
The uncertainties, including the specific percentages and income levels, stem from the organizers' having yet to choose from the eight possibilities the Initiatives Title Setting Review Board gave critical “single topic” OK to.
Colorado Politics, the weekly print and online publication, reported in detail on Jan. 27, “Colorado title board OKs ballot measures to eliminate flat income tax in favor of graduated brackets,” on the possible ballot question.
As to TABOR, the current 4.4% is not in it, and that percent has been decreased a couple of times by voters in the recent decade; approval to reduce a tax has been reasonably easy to come by. What is in TABOR is the mandate that the income tax be a single percentage – a flat tax – for all incomes. That is what would change if the initiative makes it onto the ballot and voters approve it.
Thus, it will be necessary to open the door to TABOR just a bit.
There’s no certainty that the question will be on the November ballot. Lawyers often oppose ballot initiatives, and this time, Michael Fields of Advance Colorado, one of the opponents, is expected to appeal the title board’s approval.
Other hurdles remain. Proponents must gather 125,000 valid signatures. And, because this is about language in the Constitution, at least 2% of the signatures must come from each of the 35 Senate districts. Voters approved that requirement in 2016, ending the previous practice of collecting most signatures from a couple of dozen miles from the intersection of I-25 and I-70. (This 2% rule applies only to constitutional amendments, not statutory initiatives.)
A recent precedent exists for asking higher earners to contribute more: in November, 60% of Colorado voters approved Proposition MM, reducing the state income tax deduction for those with a federal AGI over $300,000 to fully fund school breakfasts and lunches. This raised taxes by about $327 for single filers and $574 for joint filers.
If income tax brackets make the ballot, will voters understand it's a single slice of TABOR, or will they be fearful of disturbing it all? And, how will Gov. Jared Polis participate? He has said he’d like to eliminate the income tax.
More to come.
