Multiple reasons for Club 20’s opposition to Amendment 66
By Steve Reynolds
The Club 20 board of directors has a history of making considered and deliberate decisions when it comes to issues that affect western Colorado.
Club 20 education committee members, board members and community members at large have been learning about the provisions of Senate Bill 213 and Amendment 66 since March of this year, when they were topics at the Club 20 spring meeting.
Numerous meetings with the sponsors have taken place since then, and a number of Club 20 board members have read the bill and the ballot language, spurring in-depth questions of the sponsors in an effort to understand the implications of these issues for western Colorado.
The Club 20 board identified a number of concerns relative to the pending constitutional amendment including:
✔ The belief that the proposed two-tier income tax structure is unfair and unequal and will have a significant, negative impact on small businesses — the economic engine of western Colorado.
Proponents say that business income is not subject to the income tax provision and that property taxes are not changed, so businesses are not impacted. Indeed, businesses that are S Corporations or LLCs, as most small businesses are, pay personal income taxes on their profits, so Amendment 66 will add significant cost to those businesses, and that may impede our ability to attract and grow more business on the Western Slope.
✔ The Constitution is not where state budgeting should take place. We have amendments that accelerate spending and amendments that put the brakes on spending, with no way to reconcile the two. Adding another constitutional amendment for state budgeting purposes only exacerbates the problem.
Setting forth a requirement dedicating 43 percent of the state’s general fund to K-12 funding in Colorado, in addition to annual new funding in the amount of $950 million, continues to make the same mistake that was made via the passage of Amendment 23 in 2000.
✔ The Club 20 board challenged the belief that adding nearly $1 billion to education funding in Colorado will cure all the state’s education woes when real reform measures are lacking in SB213. While some provisions in SB213 are laudable, it does not provide for real reform in the education system. Without significant reform measures in the delivery of education in Colorado, Amendment 66 will be a Band-Aid, at best.
The Club 20 board called on the administration and the Legislature to go back and do the hard work before the state faces the significant financial crisis projected to take place within the next 12 years.
✔ It is important to note that Club 20 board members opposing Amendment 66 pointed out that the information being circulated that 50 percent of the new funding would be redirected to bailout PERA is blatantly false – that is not the premise of the Club 20 opposition to Amendment 66.
However, it is interesting to note that in 2009, the Legislature and administration reinterpreted parts of Amendment 23, which reduced that funding obligation in order to balance the state budget. It is not a stretch to see how that could happen again with Amendment 66, should the ailing PERA system become a greater drain than it is currently on state coffers.
It is difficult not to believe that the PERA program is “ailing” when it is underfunded to the tune of $22 billion to $26 billion and is considered the sixth most financially unstable public pension plan in the nation.
It is not insignificant that local school districts’ PERA expenses account for 16 percent to 20 percent of district budgets throughout the state, and those figures are escalating rapidly.
✔ Western Colorado is currently home to some of the most inequitably funded school districts in the state. Of the $950 million in new revenue Amendment 66 is expected to generate, $73 million will be directed to the Western Slope’s 35 school districts. However, $366.7 million goes to “teacher and leader investment” — whatever that means. Club 20 has not had a preponderance of member school districts encouraging support for this measure; indeed we have heard messages of caution and concern more than anything from member districts.
Club 20 believes a strong well-funded education system is imperative for the future of our state and is supportive of well-thought-out education reform. The CLUB 20 board did not see SB213 and the Amendment 66 funding mechanism as a solution that adequately addresses education concerns and felt it important to make that position known. We stand ready to work with the Legislature, businesses and the education community to come up with solutions that will be long-lived and will meet the needs of Western Slope communities for the long term.
Steve Reynolds is chairman of the Club 20 Board of Directors.