The 3 statewide questions on the 2021 ballot, explained
Routt County voters will be asked to consider three statewide questions on their ballots for the Nov. 2 election.
The Colorado Constitution requires amendments in an off-year election to pertain to fiscal issues like taxes or spending.
One of the three questions is a constitutional amendment, which will require 55% of the vote to pass, and the two other would alter state statutes, requiring a simple majority to pass.
Amendment 78: Legislative authority for spending state money
Colorado’s spending is typically approved by the legislature each year when it approves the state budget, but not everything is specifically allocated by the General Assembly.
Custodial monies are dollars that go directly to state agencies for them to decide how to spend, without the legislature needing to weigh in. Money from a national settlement with Purdue Pharma owed to Colorado is an example of custodial money being distributed by the state attorney general’s office.
Constitutional Amendment 78 would end this practice, prohibiting state agencies from spending custodial money without a specific allocation from the legislature. Instead, this money would go into a newly created fund, with interest from the fund going into the state’s general fund. Agencies currently can spend any interest that is accrued on custodial money.
The legislature would then be needed to allocate any spending out of this new fund but only after conducting a public hearing.
In 2020, Gov. Jared Polis spent $1.67 billion in CARES Act money the state received through an executive order. If Amendment 78 were to be approved, a simple executive order for spending would no longer be allowed.
An independent commission currently allocates transportation funding, but if this measure passed, it would be in the legislature’s hands. The same is true for grants from the federal government and gifts or donations given to agencies, colleges or universities.
Agencies would need to submit proposed spending of this money for the legislature’s approval, which would require more budget staff for each, costing the state about $1 million each year.
“It’ll put the power back to the people through the legislature,” said Pete Wood, chair of the Routt County Republicans, who supports the measure. “Right now, there’s money that comes into the governor’s office that he currently can spend however he sees fit, and that undermines the integrity of our government.”
Opponents say it will add more costly bureaucracy to state government and could have significant unintended consequences, as the legislature only meets five months each year. The longer process to approve spending could delay state spending, including on emergencies like wildfires.
“Some areas of government agencies are very nonpolitical, they’re very technologically based, and you want them to be focused on their technological expertise, not constantly calling their legislature back to make a decision,” said Catherine Carson, chair of the Routt County Democrats, who opposes the measure. “If we got federal wildfire funds, we’d have to call a special session to help our communities? That doesn’t seem very efficient.”
Proposition 119: Learning Enrichment and Academic Progress program
If approved, Proposition 119 would create the Learning Enrichment and Academic Progress program, which would provide financial aid to eligible students for out-of-school enrichment like tutoring.
The measure would be funded largely by an increase to the sales tax on recreational marijuana sales, bumping it from the current 15% to 18% next year, 19% in 2024 and 20% for each year after.
It would also create a new state agency to control this money, independent from both the State Board of Education and Colorado Department of Education, governed by a board of directors appointed by the governor.
To fund this new agency, it would also require money to be transferred out of the State Land Trust Fund to the State Public School Fund, and then corresponding money — about $22 million per year — from the general fund would go to the new agency.
Both Carson and Wood said they opposed the measure.
Carson said she opposed it because it diverts money away from the Land Trust, which goes towards general school funding, away from public schools in favor of private entities and because it adds more bureaucracy to school funding.
Wood said on its face the measure has good intentions, but he doesn’t like how the new agency spending the money is structured, which he believes could lead to corruption. He also worried that an increase in marijuana sales tax would incentivize more black-market weed sales.
Members of the Steamboat Springs School District Board of Education said they opposed the measure, in line with the Colorado Association of School Boards.
“This is one of those things that seems great in theory,” Board President Kelly Latterman said Monday. “The marijuana money is currently allocated for the BEST funding program, and (the association of school boards) is saying there would be money likely taken away from that.”
BEST funding has had clear impacts in Routt County, notably being the primary funding source to build the year-old Hayden Valley Schools building.
“The other point is that it is possibly the beginnings of initiatives of school vouchers, which would definitely take money away from public education,” board member Lara Craig said.
Proposition 120: Property tax assessment rate reduction
The third measure on the ballot may have a different impact than when it was initially put on the ballot earlier this year because of Senate Bill 21-293 that went into effect in June.
Proposition 120 would initially have lowered property tax assessment rates for all residential property and most nonresidential property, but the June legislation created various categories of property. That bill also temporarily lowered property tax assessment rates for residential, agricultural and renewable energy properties, dropping it to 6.8% for 2022 and 2023.
Because of this, the proposition would lower residential property tax assessments on multifamily housing — duplexes, triplexes or those with four or more units but would not include condos — to 6.5%, down from 2021’s 7.15%. Nonresidential rates would drop from 29% to 26.4%, but that would only affect lodging properties like hotels and motels.
Single-family homes, agricultural land, mines and oil and gas properties would not be impacted.
This would decrease the amount of property taxes collected by local governments across Colorado by $45.9 million in 2022 and by $50.3 million in 2023. Subsequent years are expected to see larger decreases because of a planned property tax increase on multifamily homes.
Before the Senate legislation, the measure was expected to cut property tax revenues by about $1 billion — money that largely goes to counties, school districts, fire protections districts, libraries, water and sewer districts and other county-level services.
School districts wouldn’t necessarily lose out because the state is required to make up the difference between funding outlined in state law and what is collected through taxes, though the legislature ultimately decides school funding levels. If there were a decrease in school funding, it would vary by district.
The impacts will vary in different counties, with Routt County seeing more revenue loss than others because it has a higher concentration of multifamily homes.
An analysis by the business-minded, nonpartisan Common Sense Institute, shows that if 120 was approved, and SB 21-293 was upheld by courts, Routt County would lose about $2.2 million in 2024. If 120 is approved and courts struck down the law and the measure is enacted as originally written, Routt County could lose as much as $7.4 million in 2024.
Supporters say the measure will lessen the tax burden on many units that are rented, easing pressure on renters and incentivizing investment in more housing amid a local and statewide housing shortage. It could also free up money for hotels to hire more staff or reduce rates, spurring more tourism.
Wood said he supports the measure because it will reduce taxes for some, especially as inflation out of the pandemic is increasing costs. He also wasn’t worried about decreased county revenues, pointing to increased revenues and pandemic aid the county is deciding how to spend.
“Giving people who have multifamily homes is going to give them some relief, and that’s always a good thing,” Wood said. “The more money they have in their pocket, the more they’re going to spend or invest in other things, which is good for our economy.”
Carson said she opposes the measure because, while the measure could provide short-term relief to people whose property tax values have been increasing, the Taxpayers Bill of Rights (TABOR) means the only way to increase these taxes in the future would be another ballot measure. SB 21-293 is already providing needed immediate relief, she said.
“They reduced the mill levy from a statutory level, and that way they can address it again as the economy changes,” Carson said. “The challenge is doing it at the ballot is that it’s permanent. … (The legislature) needs to be able to react to changing economies and changing situations.”
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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