This story was produced as part of the Colorado Capitol News Alliance. It first appeared at coloradosun.com.
For the first time in a generation, voters agreed to forgo their state taxpayer refunds to send more money to Colorado’s beleaguered public school system.
Proposition NN was leading with 55.3% of the vote, with 44.7% opposed as of 11:23 p.m. Tuesday, when the race was called by The Associated Press.
In its first year, Proposition NN is expected to generate about $330 million to boost teacher pay, reduce class sizes and invest in early childhood programs, like pre-K and childcare.
But the measure’s benefits to schools — and its costs to taxpayers — could grow substantially over the next decade as the economy grows. It lifts the state spending cap by $4.6 billion, effectively eliminating taxpayer refunds owed under the Taxpayer’s Bill of Rights indefinitely.
The measure was referred to the ballot by legislative Democrats and backed by the state teachers union, which spent heavily in support of the proposal.
“Every child deserves a school with enough teachers and the support to help them succeed,” Colorado Democratic Party Chair Shad Murib said in a statement. “Tonight, voters gave Colorado more resources to meet that responsibility.”
Anita Williams, 80, voted in person Tuesday in Denver before heading out for a dog walk. She had a crumpled up, handwritten list in her pocket of a dozen amendments and how she should vote on them.
“(Proposition NN) is one of the few I voted for that said they wanted more money,” she said. “I think teachers aren’t paid enough for what they do. I mean, you want a good teacher, you need to pay them.”
Emily Buzek, a registered Democrat living in Longmont, also voted in favor of Proposition NN, saying she wouldn’t feel a loss by seeing her TABOR refunds go to schools instead.
“I’m doing fine,” Buzek said, “and I would rather the money go back to our community and to the people that are doing good work for our community.”
But Robyn Jones, a 65-year-old custodian at her church, said she voted no because “there’s a lot of people like me” who depend on their TABOR refunds.
“Every penny counts,” said Jones, a registered Democrat who lives in Colorado Springs. “My son is a cook and he got raised to a higher tax bracket, but he still can’t afford health insurance because his rent is so high.”
The measure’s success — fueled in part by a blue wave across the country — represents a landmark victory for education funding advocates, ending a decades-long run of disappointments at the statewide ballot box.
TABOR was added to the state constitution in 1992, enacting a strict cap on state spending and giving voters the sole authority to approve or reject tax increases.
The constitutional amendment has been a boon to fiscal conservatives, limiting the growth of government and repeatedly delivering tax relief to households and businesses in an era in which Democrats have otherwise dominated elections.
But the conservative campaign against Proposition NN was more muted than its response to other school tax increases over the years. A separate ballot measure, Amendment 87, which sought to raise taxes on high earners and large businesses, drew the bulk of the conservative opposition’s campaign spending this cycle.
An era of cuts to schools
TABOR has restrained the state’s general fund to roughly the size it was in 1993, after adjusting for inflation and population growth. At the time, Colorado’s state taxes were among the lowest in the country, and they have remained so in the intervening decades.
As the economy has grown, it has at times created large surpluses that the state is prohibited from spending. In some years that has given taxpayers more than $1 billion in refund checks, returning hundreds of dollars to their pockets.
Over the same period, lawmakers and voters have approved round after round of income and property tax cuts, eating away at Colorado’s two biggest sources of K-12 funding.
In the decades since TABOR was adopted, schools across the state have struggled to retain teachers and keep up with administrative costs. By one metric, which compares teacher salaries to what they could make in comparable fields with a similar degree, Colorado ranks dead last in teacher pay. More than half of Colorado school districts no longer teach classes five days a week in a bid to save money.
Against that backdrop, education funding advocates have tried again and again to raise money for schools. Over and over, voters said no, rejecting three income tax hikes since 2011 and three attempts to tap the TABOR surplus on behalf of schools.
Of the limited ballot successes for K-12, Amendment 23 in 2000 was likely the high-water mark. The constitutional amendment required the state to increase per-pupil funding annually by the rate of inflation — but it didn’t provide new tax dollars to do so.
During the Great Recession, lawmakers decided they simply couldn’t afford it, leading to a decade-plus stretch in which the state underfunded schools by nearly $10 billion.
How the money will be spent
The first dollars generated by the measure would be used to increase school funding by 2% annually, or about $107 million in the first year.
For the next decade, the state would spread any other dollars from the TABOR surplus among K-12 education and other children’s programming, mostly early childhood programs like preschool and childcare.
At least half of all the money retained by the state each year would support K-12 schools. For example, if the state keeps $500 million in TABOR surplus and a 2% increase in K-12 spending accounts for $100 million, another $150 million would go to school districts while the remaining $250 million could go toward expanding access to preschool or childcare.
After a decade, the state would still be required to increase K-12 spending by 2% annually, but the other funding restrictions expire, allowing the legislature to spend the rest of the money on anything it chooses.
Still, Proposition NN isn’t the massive financial windfall for K-12 that the $4.6 billion increase in the TABOR cap might suggest. Legislative forecasters don’t expect the TABOR surplus to be anywhere near that large in the coming years. And, the measure keeps in place other programs that would get TABOR surplus dollars before schools receive what’s left.
The first $200 million or so in TABOR refunds are used to reimburse local governments for the cost of a property tax break for seniors. In years when the state budget grows fast enough, Colorado also provides two tax credits for low-income families that would leave less money for education.
As a result, Proposition NN is only expected to generate $330 million for schools this budget year, and $521 million in the 2027-28 budget, which starts July 1. In Year 1, that’s expected to reduce taxpayer refunds by $28 for a single filer making $100,000 a year, or $56 for joint filers. In the second year, taxpayers are projected to miss out on $68 in individual refunds and $96 if they file jointly.
Who spent money for and against Proposition NN
Yes for Colorado Kids was the main issue committee supporting Proposition NN. It raised about $10 million to pass the measure.
Major donors to the group included the National Education Association, the nation’s largest teachers union, at $7 million; the Colorado Fund for Children and Public Education, which is tied to the Colorado Education Association, the state’s largest teachers union, at $1.4 million; and Gary Advocacy, a Colorado philanthropic organization, at about $1.1 million.
The Denver Metro Chamber of Commerce spent $925,000 in opposition to Proposition NN and Amendment 87, the graduated income tax measure on this year’s ballot, through the issue committee Let’s Go Colorado.
Brighter Colorado, an issue committee that backed several conservative ballot measures this year and opposed both NN and 87, raised about $6.1 million, most of it from conservative political nonprofits that don’t disclose their donors.
Colorado Sun staff writers Michael Booth, Erica Breunlin, Jesse Paul and Olivia Prentzel contributed to this report.
