2021 Election, Elections, Featured, Sherrie Peif, TABOR, Taxes

Another income tax rate reduction measure may be headed to Colorado voters this fall

DENVER — After passing a ballot measure to lower the state income tax from 4.63 percent to 4.55 percent in 2020, it appears Colorado voters may get the chance to lower it yet again with another ballot measure this year.

As with Proposition 116 from 2020, the proponents on this year’s measure are Independence Institute* President Jon Caldara and Senator Jerry Sonnenberg, R-Sterling.

Rep. Jerry Sonnenberg

What’s different this time around is the why.

Proposition 116 was introduced in response to another initiative – which eventually failed in gathering the number of signatures needed to get on the ballot — that sought to repeal Colorado’s flat income tax rate and replace it with a progressive rate that would have increase taxes on Coloradans as they earned more.   This year, Sonnenberg said he signed on for another go around again because it looks like Colorado voters are going to have to do what the state legislature will not.

Sonnenberg said the fact Colorado’s economy is recovering quickly from the effects of government-imposed sanctions in response to the Coronavirus, means voters are againg going to have to tell legislators prioritize their spending.

“They are fiscal conservatives who shoot down tax increases, vote for tax reductions, and vote for limited government such as Proposition 117 last year,” Sonnenberg said of Colorado voters. “Yet then they vote for stupid stuff and people who come in and want to raise all kinds of taxes. I have always been a strong supporter in the people’s right to petition government.”

Proposition 117 strengthened the Taxpayer Bill of Rights (TABOR) by requiring the state to take certain increases in fees when associated with the creation of new enterprise funds to the voters. TABOR is a 1992 amendment to the Colorado Constitution that controls how revenue is collected and how taxes can be raised. When the state collects any amount over a specified limit in a fiscal year, that amount must be refunded to the taxpayers.

Jon Caldara

Caldara and Sonnenberg have filed two different measures. One would take the state’s flat tax from 4.55 percent to 4.51 percent, beginning with tax year 2022. The other would take it from 4.55 percent to 4.41 percent, beginning with tax year 2022.

They must decide by April 9 which measure to go with. It is scheduled to be heard by the Title Board on April 21. Once approved, petitioners will need to collect about 126,000 valid signatures to get on the ballot.

Governor Jared Polis supported the last tax reduction measure in 2020. It is not known if he will support another.

“Our recovery has happened so fast that it looks like we are going to hit the TABOR limit by 2022,” Sonnenberg said. “Shouldn’t people be able to keep that money rather than give it to the government to hold and send back later?” Sonnenberg said.

This Proposition would be a statutory change, meaning it needs 50 percent plus one of the vote to pass, and lawmakers can later amend the measure if enacted, as with any other state law.

*Independence Institute is the publisher of Complete Colorado.

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