School finance backers decide on two-tiered income tax hike
DENVER — Just more than a month since the end of the legislative session, the backers of the new School Finance Act have settled on a taxation scheme for voters to decide on this November: a two-tiered income tax hike that would impact higher earners more.
Lawmakers passed the legislation last session, hoping to change the way Colorado funds its schools, directing additional money to full-day kindergarten across the state and distributing more money per pupil to districts with higher percentages of at-risk students.
But none of it will take effect unless voters approve $950 million in new tax revenues to pay for it.
“This measure is critical to driving economic well-being of both students and the state of Colorado in the future,” said Chad McWhinney, CEO and founder of the McWhinney development company, in a press release Tuesday from the bipartisan Colorado Commits to Kids initiative.
“It’s a balanced plan that will make important improvements to our education-funding system while improving outcomes and accountability.”
Colorado’s current income tax rate is a flat 4.63 percent for everyone regardless of income. The proposed ballot measure, which would be on the ballot as Initiative 22, would set a flat tax rate of 5 percent for all income of less than $75,000 a year.
But the proposal those earning more than that would see their income taxed at two different rates: the 5 percent flat rate for income up to $75,000 annually and then a 5.9 percent rate for all earnings above that threshold.
Colorado Commits to Kids will need to gather valid signatures from 86,105 Colorado voters in order to qualify for the November ballot.
The deadline to submit petitions is 3:00 p.m. on Aug. 5.
Gov. John Hickenlooper, a Democrat who told reporters when signing the bill that he would assist in selling the proposal to taxpayers but has “preferences” about the taxing formula, indicated Tuesday that he would continue to support and campaign for the ballot measure.
“Colorado has approved some of the most robust education reforms in the country. These are reforms the governor fully supports,” said Eric Brown, Hickenlooper’s spokesman.
“Now, it appears voters will get a chance to endorse the changes and set a new course for Colorado kids. We look forward to following the petition process and continuing to talk to the business community and other stakeholders about these reforms.”