This week Colorado’s Secretary of State confirmed that Coloradans will be able to vote on a measure (Proposition 103) this November that would temporarily raise the state income and sales tax rates. While the plan isn’t the most progressive option imaginable, it is a very reasonable and important step forward in helping the state repair its education system, which has been greatly damaged by the infamous Taxpayer Bill of Rights (TABOR).
If approved by voters, Prop 103 would raise the state’s flat income tax rate from 4.63% to 5%, and the state’s sales tax rate from 2.9% to 3%. In effect, these increases would return the state’s tax system to where it stood in 2000, when the legislature cut both taxes just as the economic boom of the late 1990’s was winding down. Unfortunately, this time around both changes would expire after five years – at the start of 2017. But the increases would help protect the state’s education system until Colorado can come up with a more permanent way to remedy its ongoing funding woes.
While Republican opposition to the measure has been entirely predictable, there has also been a surprising amount of reluctance among some of those on the left. Proposition 103 is less progressive, and would raise less revenue than a previously discussed ballot measure that would have established a graduated rate income tax in Colorado. And to be sure, establishing a graduated rate income tax would be a much better path forward for Colorado in the long-term. But with such a solution not on the immediate horizon, Prop 103 is an important second-best option that should not be ignored.
Moreover, worries that Prop 103 would disproportionately affect low-income families are incorrect, as Colorado’s flat rate income tax – the main component of the proposed tax package – is in fact moderately progressive overall.
A list of organizations that have endorsed Prop 103 can be found here. And for more information on this and other Colorado tax policy issues, be sure to visit the Colorado Fiscal Policy Institute, one of the main architects of this initiative.