DENVER — Despite Gov. Jared Polis’ state-subsidized universal preschool scheme already struggling in just its first year, legislative Democrats are working to pass new legislation that would deliver a body blow to the revenue stream keeping the program alive.
While counties already may regulate the sale of tobacco and nicotine products, Senate Bill 24-022 would allow county commissioners to adopt new regulations outright banning the retail sale of “any or all cigarettes, tobacco products, or nicotine products, including prohibiting the sale of any or all flavored cigarettes, flavored tobacco products, or flavored nicotine products.”
Currently, there are three different taxes imposed on tobacco: A statutory 20 cents per pack tax, Amendment 35 in 2004 added 64 cents per pack to help fund various health initiatives, and Proposition EE in 2020 created a new tax that incrementally increases until an additional maximum of $1.80 per pack goes into effect by 2027. All Proposition EE revenue is intended to fund public education, most notably Governor Jared Polis’ universal preschool program.
Because supporters say there is no way of knowing what and how many counties will enact such a ban, there is no estimate of lost revenue attached to the fiscal note for SB-022. However, in 2022, a similar effort, which would have banned flavored nicotine products statewide, had a fiscal note attached that predicted the state would lose nearly $46 million in revenue over the first two years the ban would be in place.
The 2022 bill eventually died in committee after Governor Polis threatened to veto it, but it is unclear how Polis feels about SB-022. Polis’ office did not return requests for comment from Complete Colorado.
Universal preschool in trouble
According to the education news site Chalkbeat, the rollout of Polis’ $322 million preschool program has been rocky at best, including “three lawsuits against the state and the threat of a fourth. Some of the hiccups and headaches are usual new-program fare while others stem from the program’s rushed rollout by a new state agency.”
Although the fiscal note on SB-022 does not give monetary estimates, it does imply that revenue will be impacted.
“The bill may impact state and local government revenue and expenditures on an ongoing basis beginning in FY 2024-25,” the note reads in part. “To the extent that counties prohibit the sale of flavored tobacco products, state revenue generated from taxes on these products may decrease.”
It also warns that funding for current programs such as “health care and tobacco education programs, as well as on the universal preschool program,” and the local municipality share is likely to decrease.
Overall, however, the fiscal note leaves more questions than answers, and none of the outcomes are favorable for Polis’ legacy program.
“For counties that adopt ordinances or resolutions to regulate flavored nicotine products, expenditures will increase to implement and enforce those policies,” the fiscal note reads in part. “As discussed above, it may also reduce distributions of state cigarette taxes to local governments, or reduce revenue from local taxes levied on these products.”
Earlier this school year, thousands of Colorado families were informed that “due to limited funding, not everyone who wants free full-day preschool can get it.”
Any further reductions in tax collections will only exacerbate the problem, as the Chalkbeat article also points out that one major component of the preschool program — regulations overseeing the providers — was scrapped because officials ran out of time creating those rules. So last spring providers were told to just “keep doing what you’re doing.”
Without regulations, it’s anyone’s guess if the standard of care for preschoolers is being implemented appropriately across the state.
“Colorado officials are planning to adopt some quality rules for the 2024-25 school year and a separate set of rules on preschool staff credentials for the 2025-26 school year,” the Chalkbeat article says. “But with some likely to be phased in over time, four or more classes of universal preschoolers may graduate from the program before a binding set of quality requirements take hold.”
The bill has passed third reading in the Senate where it was sponsored by Sen. Kyle Mullica, D-Thornton, and is headed to the House where it is being sponsored by Rep. Kyle Brown, D-Boulder, and Rep. Elizabeth Velasco, D-Eagle. There is no date set yet on when the bill will be introduced.
