Ballot measures on taxes being pulled by Heath, Fiscal Policy Institute

Ballot measures on taxes that were headed to the November ballot are being pulled by their sponsors, Sen. Rollie Heath, D-Boulder, and the Colorado Fiscal Policy Institute, but for very different reasons.

Heath told The Colorado Statesman Monday that he’s pulling his citizen initiative that would increase the rates of state income and sales taxes for three years, in favor of a measure that would make the increases permanent.

The Colorado Fiscal Policy Institute decided to pull its ballot measures, six of them in all, because the Institute ran into opposition from chambers of commerce and believed that those groups would raise millions of dollars to defeat whatever showed up on the ballot.

Heath’s first proposal, filed Feb. 28, would raise the state individual and corporate income tax rates to 5 percent from the current 4.63 percent, and raise the state sales and use tax rates to 3 percent, up from the current 2.9 percent. The measure, if approved by voters, would go into effect Jan. 1, 2012 for a three-year period, and direct the extra revenue to both K-12 and higher education.

The temporary tax increase was announced in a Feb. 28 press conference, and Heath said if passed, it would raise $1.63 billion over the three year period, with as much as $285 million for the 2011-12 budget. But Heath admitted in a Feb. 28 press conference that if approved, the state could not guarantee those funds would go to the purposes for which they were intended. “It’s up to the General Assembly and the Joint Budget Committee to decide where to put it,” Heath admitted, but said that that voter intent would be that the funds go to K-12 and higher education.

The new proposal, #22, would incorporate the same increases in the sales and income tax rates and that the funds go to education.

Heath hasn’t yet pulled the first proposal, but said he would do so after he runs it past the Title Board. As to his reason for pulling the proposal, “with the 60 percent requirement I’d be crazy to do a three-year sunset” on it, he said Monday. The 60 percent requirement is contained in an initiative filed March 4 by the Hackstaff Law Group. Initiative 21 says that beginning after the 2012 general election, any effort by the General Assembly to repeal statutory tax measures must pass with a 60 percent majority.

On Monday, the Institute, citing lack of support, announced it would pull six initiatives recently filed with the state Title Board.

Institute Director Carol Hedges said in a statement Monday that “as much as we believe Colorado needs swift action to address its fiscal challenges and stop the cycle of damaging cuts to our public services, these measures were not able to gather the broad support needed to move to the ballot in 2011.”

The Institute statement said it filed six measures with the Title Board that would “test how creating a graduated income tax would work with state limitations on ballot measures.”

One of the sponsors of the CFPI initiatives said Saturday that the group would be withdrawing the tax-increase proposals because of unfavorable polling and word from prominent opponents that they would spend whatever it takes to defeat the ballot measures.

Marijo Rymer addressed a group of five Democratic lawmakers and about 50 Denver residents at a budget town hall sponsored by Democrats in east Denver.

Polling shows only “46 or 47 percent support” for a ballot measure to increase taxes, Rymer said. (Political analysts say it’s a rule of thumb that ballot questions need to start with more than 50 percent support because they only tend to lose support once campaigns get under way.) She said the polling showed similar levels of support for the CFPI initiatives and for the initiative sponsored by Heath.

In addition, she said, CFPI learned recently that chamber of commerce and business groups planned to raise millions of dollars to defeat any tax increase on the ballot this fall. The prospects of an expensive campaign starting in the hole with voters, she said, made it unlikely the usual allies supporting a tax increase would back a campaign.

“Metro Chamber of Commerce, Colorado Concern and Colorado Forum informed us last week that they would start raising money ? and they already have ? to oppose any graduated income tax on this ballot in 2011,” Rymer said.

In the face of coordinated opposition, and with little “institutional” support for the CFPI ballot measures, Rymer said the outlook was grim.

“Going to the ballot with a measure that is sure to fail because of funded opposition is probably not very smart,” she said. “We need a little bit more time in order to get the tax structure issue addressed.”

Still, she wasn’t entirely pessimistic about the prospects for a fix from voters.

“We believe that the best way to deal with taxes is to go to a graduated income tax rate,” Rymer said. “That is not probably likely to happen this session. Therefore, personally, I’m supporting Sen. Heath’s proposal. I believe that is what we need to do in the short-term, as a stop-gap.”


Ernest Luning also contributed to this story.

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