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The Nov. 2 election is predicted, like most odd-year elections, to have a lower turnout than elections in even-numbered, or presidential years.

Some Colorado election observers recently noted that’s not true in some areas – Chaffee County, for instance has historically had among the highest turnout for odd-year elections – just under 60 per cent, in one instance.

While local municipal election interest may drive higher turnouts in some areas; three statewide amendments and propositions concerning tax rates, how the state spends taxpayer money and funding out-of-school learning programs might also drive higher turnout.

The State Ballot Information Booklet, also known as the ‘Blue Book,’ explains the three proposals in depth; two would change state statutes, one would change the constitution as well as state statutes.

The State Ballot Information Booklet assessments for each ballot question were reviewed and used for individual recaps of each ballot question by  Ark Valley Voice (AVV).

  Amendment 78: Legislative Authority for Spending State Money

Image of private voting booths. Photo Courtesy of KSHB.

This change to the constitution and statutes concerns “all money received by the state, including money provided to the state for a particular purpose, known as custodial money” be directly allocated by the legislature. In cases of emergency such as the recent COVID pandemic, it would authorize the legislature, not the governor, to direct the use of emergency funds.

It would require so-called custodial money be deposited into a new transparency fund that would be subject to a public hearing before being disbursed. It would repeal the authority of the state to disburse money from the treasury by any other means. That includes state agencies, colleges and universities, and officials such as the governor and attorney general, to spend funds without direct legislative allocation.

The measure would deposit custodial money (that received by the state for a particular purpose, such as recent federal emergency pandemic relief funds, from a federal legal lawsuit settlement, a federal or private grant award or state transportation funds, for example, into a new fund account,with interest earned on the one going into the general fund and allocated by the legislature after a public comment hearing.

Proponents say it would increase fiscal transparency and accountability in state government and allow for public input for how funds are spent. The argument in favor notes currently, the governor, attorney general and unelected state agency administrators are able to spend large amounts of money without accessible public records or public input.

Opponents say it would add another layer of expensive and unnecessary bureaucracy and risks unintended delays in state services such as emergency responses to public health crises or wildfire disasters or other unintended consequences. Opponents also say making grant funding to additional administrative steps could jeopardize the state’s competitiveness for grant awards.

The assessment of fiscal impacts in the Colorado Blue Book notes it would increase spending by at least $1 million annually to add state budget staff and notes other allocations may be affected if the party in control of the legislature makes different spending decisions than would state agencies. It notes the overall impact on state revenue is unknown, depending on how the measure would be implemented and how long the money remains in the new fund and could move interest earnings to the general fund rather than the recipient state agencies.

Proposition 119: Learning Enrichment and Academic program Progress Program

This amendment to Colorado statutes would create a program to help certain Colorado youth access and pay for out-of-school learning opportunities like tutoring and fund the program by increasing retail marijuana taxes; five percent over three years. This would be combined with transfers from the general fund, estimated at about $20 million, and would divert another $320 million from the State Land Trust fund, which helps fund public schools.

Students getting on school bus. Image courtesy of The 74

Colorado students between the ages of 5 and 17 years of age would be eligible for the program. Out-of-school learning and enrichment programs would be programs, services, systems, activities, material, and purchases that provided added education and developmental support to students outside the regular school day. Such programs could include tutoring, assistance to youth with special needs, second language training, academic learning support materials, career and technical education, as well as emotional and mental health services.

The measure would establish a new agency called the Colorado Learning Authority, operating independently from the state Department of Education or Board of Education. It would be overseen by a nine-member board of directors, appointed by the governor, responsible for its administration, distributing funds to the program, evaluation of its quality and impacts and determining day-to-day operations, working with providers and parents.

The program would pay providers of services chosen by parents of eligible youth, with priority given to families with incomes at or below the federal poverty level (currently $26,600 for a family four) in 2023, followed by families with incomes up to twice that level, with any remaining aid distributed to other participating students after that.

Funding would be two-fold; a phased sales tax hike on retail marijuana; growing from 15 to18 percent in 2022, to 19 percent in 2023, to 20 percent in 2024, and each year thereafter. It would also shift additional money from exiting state funds, including the State Land Trust and General Fund.

Proponents for Prop 119 point out that tutoring and other enrichment programs outside a school setting are badly needed; even before the pandemic many students were not proficient in reading, math, and writing. School closures in the wake of COVID-19 only increased the need for outside educational support for some students, especially those who cannot afford outside tutoring.

Those favoring the bill say this program will support the academic needs of all students, and prioritize low-income students for financial aid. Once financial aid is approved by a bipartisan board, families and students will have choices on which certified tutors and instructors will meet their specific needs.

Arguments against the measure point out it will mandate the use of public money to out-of-school service providers instead of being directly invested in public schools to support the state educational system. They argue if hikes in the marijuana taxes are earmarked for education, it would be better targeted to expand public education in every community, keeping the funding under local control and helping school districts to reinstate programs that in some instances have had to be cut.

On the funding side, opponents say increasing the sales tax on retail marijuana may push more people into the black market, hurting legitimate legal marijuana businesses, and increase the financial burden on low-income individuals.

The fiscal impact, according to the analysis, would be to increase state expenditures for the newly created fund by approximately $55.8 million in the 2021-22 budget year and $109/1 million in 2022-23 and future years. It will divert $21 million in budget year 2021-22, and $22 million in 2022-23 in State Land Trust revenue from the Permanent Fund to the State Public School Fund. This would then be transferred from the General Fund to the new Learning Enrichment and Academic Progress Fund, such funds would not be subject to state constitutional spending limits.

Property Tax Assessment Rate Reduction

This third, state-wide ballot question would create an amendment that would lower the property tax assessment rates for multifamily housing and lodging properties and allow the state to retain money above current constitutional spending limits if it is used to fund existing property tax exemptions.

Bryan Construction Superintendent Frank Bardowski pauses for a minute as the company makes finishing landscaping progress on the Collegiate Commons multifamily affordable housing units in Buena Vista.

The ballot information ‘blue book’ notes the description of Prop. 120 is different than the ballot question itself and the text of the measure because of a law passed by the legislature during the 2021 session, after the ballot question had been set. To clarify; Prop 120 was initially written to permanently lower assessment rates for all residential and most non-residential property; but a Senate bill passed in June established new categories of property so that the lower residential assessment rate applies only to multifamily properties and the lower nonresidential rates apply only to lodging properties.

The ‘blue book’ points out that the Senate bill passed in June also temporarily lowers assessment rates for residential properties, agricultural properties, and renewable energy properties for the years 2022 and 2023, after which they will go back to 2021 levels.

The comparison of property tax rates under the measure is complex. Basically, it would allow lowering property tax assessment for multifamily and lodging properties by 6.5 percent in 2022 for multifamily properties. Without Proposition 120, those rates would be: 7.15 percent in 2021, 6.8 percent in 2022-23 and 7.15 percent in 2024 for multifamily properties. With Prop 120, Lodging properties assessment rates starting in 2022 would be 26.4 percent; without Prop 120, assessment rates would be 29 percent in 2021, 2022, 2023 and 2024.

Properties not affected by the measure would include other residential properties including single-family homes, agricultural land, mines and oil and gas properties, and other non-residential property such as industrial, commercial, natural resources, and vacant land.

The assessment explains property taxes would be reduced for most owners of multifamily and lodging properties (hotels, motels, bed and breakfasts) while the actual fiscal impact per owner will depend on factors such as the jurisdiction where the property is located, actual property value, and mill levies determined by local governments.

The financial impact on local governments may be reduced revenue and local service impacts such as education, police and fire protection, transportation and libraries, depending on the localities mix of multifamily and lodging properties and the actual mill levies passed at each local level.

For instance, local government could ask voters to raise future mill levies; some already have permission to adjust rates to make up for reductions in assessment rates. Because property values grow at different rates across the state, this affects Prop 120 impacts on property tax revenue.

The impact on school funding would vary because schools are funded by a combination of state and local government revenue. Property tax reductions in some districts not offset by additional state funding could result in lower funding in some districts.

The Homestead Property Tax exemption for veterans with service-related disabilities and seniors (allowing exemption of 50 percent of the first $200,000 of residential property value from property taxes), could also be affected by this ballot question, because when the exemption is available, the state reimburses local governments for the tax reduction from the property tax exemption. The state allocated $157.9 million for local government reimbursements in budget year 2020-21. Prop 120 does not change the Homestead Property Tax exemption.

Proponents of the measure argue it will provide targeted tax relief for important sectors of the state economy, and for multifamily properties, could ease pressure on renters, and encourage investments to address the state’s housing shortages. Also, lodging owners could hire and retain more employees and perhaps even reduce lodging rates, attracting additional visitors.

Those against Prop. 120 argue permanently reducing property tax revenue to local governments has several downsides, and could result in cuts in needed services. It could also pose challenges for special districts as well as cities and counties that rely on property tax revenue to maintain levels of services for water, transportation, education and emergency services. Fire protection district needs are increasing, opponents argue and some areas of the state can’t generate funding to support those services.

The fiscal impact is multi-faceted. If passed, this ballot question would decrease local government property tax revenue statewide by an estimated $45.9 million in 2022, $50.3 million in 2023, and the decrease is expected to grow larger in subsequent years.

Prior to the Senate bill that passed in June, it was estimated the property tax revenue to local governments would be reduced by more than a billion dollars, which is why that number still appears on the ballot question.

The impact on taxpayers is also complex. Under Prop. 120 voters are encouraged to consult the tables in the blue book. For example, the estimated change in property taxes for a multifamily property valued at $500,000 would be about $125; for a lodging property valued at $500,000 it would be $1,086. For a multifamily property valued at ten million dollars, the estimated reduction would be $2,056; for a ten-million-dollar lodging property, it would mean a change of $21,720.

The complete text on all of the ballot questions are also listed in the State Ballot Information Booklet.