Our K-12 education is a very important element of our society. This month, voters will receive mail ballots that will ask for approval of nearly $1 billion of new taxes to fund a new education finance bill.
There are many reasons to reject this issue.
I support reasonable funding for education. I have worked to increase opportunities for children as well as new funding for education, but this proposal is not the answer to our problems. The ballot issue will put restrictions in our constitution that will damage our economy as well as impact the state budget in a very negative way.
Voters approved Amendment 23 some years ago to mandate funding for education. This proposal makes several changes to that measure. One, it removes the increase of the inflation rate on the base funding for each student. This could impact the revenue some districts receive and make them underfunded in comparison to other districts.
The proposal also creates a definition of the “income tax increment.” That would mean not all of us would pay the same rate of tax as we do now, which has been one of the guidelines in TABOR. Fairness in the tax code is extremely important. Having one rate without deductions generally means most of the upper-income brackets end up paying their fair share of tax.
When Amendment 23 passed, a special education fund was created. This fund was to receive one-third of 1 percent of the income tax received by the state. This is now changed to 43percent of all revenues from the income tax, the sales tax, and the excise tax. This is the same tax revenue that currently funds the school finance act. But — and this is extremely important — it does not change how Amendment 23 said the money could be spent.
The money from the Education Fund can be used only for accountable reform: programs to meet standards; class size reduction; expanding technology; improving student safety; expanding preschool and kindergarten programs; performance incentives for teachers; accountability reporting; and capital construction. That is a lot of money on a few items.
In other words, almost half of the tax money received by the state will go to the Education Fund. How will the legislature fund other necessary items such as higher education, Medicaid, welfare, the courts, prisons, etc.?
Let’s try to make this simple: If you have a take-home pay of $100,000 and you are mandated to put 43 percent ($43,000) in a trust fund but the bills you must pay amount to $90,000, what do you do? You cannot — other than bankruptcy. Changing Amendment 23 in this initiative could do the same for the state. If not, it certainly would create major problems for the budget committee and many underfunded items — such as higher education.
The new taxes that you will be asked to vote on will go into another fund, named the Achievement Fund. It can only be spent “to benefit the education of participants of preschool programs and public school kindergarten through twelfth grade students by implementing reforms and programmatic enhancements” — whatever all of that means. To make matters worse, neither fund can be used to replace the previous general fund appropriations.
It’s very complicated, and also a disaster for the legislature to be able to fund the needs of the state.
Now, to address the new tax on the ballot: Our current income tax is 4.63 percent of your federal tax. The new increase for those earning $75,000 and less would be increased to 5 percent (an increase of 8 percent). Everyone above $75,000, except corporations, will have an increase to a tax of 5.96 percent, an increase of 27 percent. This new tax is to be paid by individuals, estates, and trusts only; corporations will not have a tax increase. This would mean individuals and small businesses will carry the burden of the new tax.
This could hurt the small businessman, since most of them do not incorporate, they pay the individual rate instead.
That is why I believe Amendment 66 will hurt our economy, which has not fully recovered. Please vote “no” on Amendment 66.
Norma Anderson,a Republican, is a former Colorado state senator. This op-ed originally appeared in the Denver Post.