State budget writers fear consequences of Colorado voters approving affordable housing ballot measure

Members of the Joint Budget Committee told The Colorado Sun they fear Proposition 123 will cut into the budget in years where there isn’t a TABOR surplus

Jesse Paul and Tatiana Flowers
Colorado Sun

The state lawmakers who write Colorado’s budget are raising red flags about how two measures on the November ballot — one that would reduce the income tax rate and another that would set aside about $300 million annually for affordable housing — could combine to hamstring the legislature’s future finances, namely by eating into education funding. 

Proposition 121 would cut Colorado’s income tax rate to 4.4% from 4.55% a reduction estimated to decrease state tax revenue by $412.6 million in the 2023-24 fiscal year. Proposition 123 would set aside up to 0.1% of taxable income each year for affordable housing, which is estimated to be $145 million in the current fiscal year — which ends June 30, 2023 — and $290 million in the 2023-24 and subsequent fiscal years.

In years where tax revenue exceeds Colorado’s Taxpayer’s Bill of Rights cap on government growth and spending by about $1 billion, the budget wouldn’t necessarily be affected by the passage of the measures. 

But in all other years, the initiatives — if they both pass — would cut into the state budget. And when the legislature is forced to pare back its spending, it’s frequently education dollars that get slashedfirst. 


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