$3B tax hike for schools on ballot for CO voters

DENVER (AP) — The nation's only ballot measure this fall that proposes a state tax increase pits some defenders of Colorado's underfunded schools against those who warn it will cost jobs.

Proposition 103 would raise state taxes for five years to generate nearly $3 billion for the education system. The question is the only statewide issue for Colorado voters in the Nov. 1 mostly mail ballot election.

Republicans oppose it, saying that raising taxes now will slow economic growth. And some prominent Democrats have refused to publicly endorse the measure.

Proponents say the tax increase is needed because school funding has repeatedly been slashed to balance the Colorado budget.

"My guess is it's close, but I feel we got a really good chance," said state Sen. Rollie Heath, a Democrat from Boulder who pitched the tax increase. So far, the initiative's backers have vastly outraised opponents in fundraising.

Proposition 103 would raise individual and corporate tax rates from 4.63 percent to 5 percent and the sales and use tax rate from 2.9 percent to 3 percent. The rates would be in effect from 2012 through 2016, with an estimated $2.9 billion in new revenue over that time going to K-12 schools and public colleges.

If it passes, a married couple with a combined household income of $125,000 would pay about $315 more annually in income taxes, nonpartisan legislative economists estimate. They also estimate that sales taxes on a $5,000 purchase would increase from $145 to $150.

"This is unreasonable. It's not right and it's not fair," said Penn Pfiffner, a former state lawmaker and chairman of Too Taxing for Colorado, one of two campaigns opposing Heath's initiative.

Pfiffner said supporters of more education funding have already gotten mandatory yearly increases under Amendment 23, which voters approved in 2000. The amendment set a funding minimum for public education with a formula tied to the rate of inflation.

Heath began talking about a tax hike this spring, when lawmakers considered budget cuts for schools and higher education. They ended up cutting more than $200 million and more cuts are likely next year. The budget for K-12 education this year is about $2.8 billion, or nearly 40 percent of the state budget.

"I think we just need to have an honest discussion with voters and the fact is our schools are underfunded," said Democratic state Senate President Brandon Shaffer, who supports the tax proposal. Shaffer said lawmakers face the possibility of cutting between $200 million and $300 million next year from schools.

No other state is proposing a statewide tax hike next month, the National Conference of State Legislatures said.

Heath has gotten mixed support from his own party as Colorado's economy struggles to recover. Democratic Gov. John Hickenlooper has said voters have no appetite for a tax increase and that he neither supports nor opposes Heath's proposal.

Every Republican in the Colorado Legislature opposes the tax hike. This month, they sent a letter to Hickenlooper, Shaffer and state House Democratic Leader Sal Pace urging them to oppose Proposition 103. Republican Speaker of the House Frank McNulty said the Democrats didn't respond.

Pace said in a statement to The Associated Press that he agrees with Hickenlooper that "there's little appetite for tax measures, no matter how good the cause."

Opponents cite a study they commissioned from the Common Sense Policy Roundtable, a nonprofit with business leaders on its board, that suggests the state would lose at least 30,000 jobs during the five-year span the tax increase is in effect because it would mean more costs to businesses that would then be less likely to hire.

"Those are real numbers. That has a direct effect on our economic recovery and the ability of families to put food on the table," McNulty said.

Too Taxing for Colorado has raised about $12,000, including $5,000 from the Colorado Union of Taxpayers, to fight the initiative. Another opposition group, Save Colorado Jobs, has raised $10,170, including $10,000 from the group's chairman, Victor Mitchell.

Mitchel insisted he was confident voters would turn down what he calls a "job killer."

"It is at a time when we have very low consumer confidence and business confidence," he said.

But supporters of the tax increase argue well-funded schools attract businesses.

"There's no better economic development than education. And we have cut our schools to the bone," said Lisa Weil, policy and communications director for the campaign to raise taxes, Support Schools for a Bright Colorado, which has raised almost $420,000.

Nearly half of that money comes from the Gary-Williams Energy Corp., a Denver-based oil and gas company whose foundation aims to help low-income children. Teacher unions, individual donors and other groups contributed the rest.

The Colorado Springs Gazette and The Denver Post are among newspapers that have written editorials against the proposal. A Post editorial said "Heath's heart is in the right place" but that the proposal "falls woefully short in addressing the state's financial troubles and finding a long-term solution to education funding."

Editorial boards supporting the increase include The Boulder Daily Camera and The Greeley Tribune, which said that the measure "is the only Band-Aid in sight" for education cuts.

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Online:

Support Schools for a Bright Colorado: http://voteyeson103.com/

Too Taxing for Colorado: http://www.tootaxing.org/

Save Colorado Jobs: http://savecoloradojobs.org/

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