NO to Amendment 73 and Proposition 112
By now you may have seen articles in the Chamber’s eWeekly SmartBrief about our positions on many of the local and state ballot measures. You can find more information here.
This week I wanted to give special attention to two issues that we oppose because one is targeted unfairly at small business and the other would wreck the state’s economy.
Amendment 73 (formerly Prop 93): Chamber Opposes
Background: This is an amendment to the Colorado Constitution. It would change the state income tax rate from 4.63% to a progressive income tax with a top marginal rate of 8.25% for Coloradoans (individuals and those filing jointly) earning over $150,000, which is not adjusted for inflation.
The corporate income tax rate would jump by 26% from 4.63 to 6.00%.
The stated purpose is to increase funding for public schools by $1.6 billion per year. Because it would be in the constitution, this would be permanent. The money would be used for minimum expenditures on a per-pupil basis and for preschool, full-day kindergarten, English language proficiency, and gifted and talented programs.
Residential property rates would drop a little – from 7.25 to 7% – and the commercial property rate would go from 29% to 24%.
What it means and why we oppose it: While agreeing that education is important and should be properly funded, we believe Amendment 73 causes more harm than good:
- It is a constitutional amendment. That means this financial arrangement would be permanently into the constitution regardless of future needs for education or any other state service.
- It unfairly impacts small businesspeople whose business income is taxed at a personal rate. Instead of the flat rate of 4.63 they would have to pay this new tiered rate up to 8.25% for income over $500,001, a 58% increase
- The $150,000 is not indexed to inflation. That means in the years ahead more and more individuals and people filing jointly will be impacted by these increases as their income grows.
- It makes Colorado unattractive to innovators and entrepreneurs.
Proposition 112 (formerly Initiative 97): Chamber Opposes
Background: This would mandate that any new oil and gas development projects, other than those on federal lands, be at least 2,500 feet from occupied buildings (homes, schools, hospitals, etc.) and other areas deemed “vulnerable” by state government. That might include parks, opens space, any body of water; basically anything.
What it means and why we oppose it: Prop 112 would devastate the state’s economy and would particularly fall hard on Weld County. The effect of Prop 112 would be a de facto ban on almost all new oil and gas projects in Colorado. Both major candidates for governor – Democrat Jared Polis and Republican Walker Stapleton – oppose it, as do Governor John Hickenlooper and former U.S. Interior Secretary Ken Salazar. It is estimated that Prop 112 would cost the state as many as 150,000 jobs over a decade and a loss of $26 billion in aggregate state GDP by 2030. Annually, there would be a loss of $1 billion in state and local tax revenue.
Ostensibly, proponents claim this is a safety measure when in fact the oil and gas industry in Colorado is already the most regulated in the nation and the world.
The Chamber recommends ‘NO’ on Amendment 73 and ‘NO’ on Proposition 112.