Voters have at least two avenues to travel in deciding education tax
Dueling studies released last week from the same university show opposing impacts that a ballot question to raise taxes for education would have on the state’s economy.
One study, done by the Leeds School of Business at the University of Colorado at Boulder, said the ballot measure that would increase income taxes to fund schools would slow the state’s economy, reduce personal income and lead to cutting of private-sector jobs.
The study said Amendment 66 would result in a $224 million loss in economic activity in the first five years.
The other study, done by the Reiman School of Finance from CU’s Denver campus, said the amendment would increase the state’s gross domestic product by $139 million over the next 25 years, lower health care costs, increase property values and lower unemployment insurance and welfare payouts.
That second study also said the measure would result in more quality teachers, reduce high school dropout rates, lower crime rates, increase entrepreneurship and improve business retention and attraction.
If approved by voters Nov. 5, the ballot question would increase the state’s 4.63 percent income tax to 5 percent for people who make $75,000 or less, but raise that rate to 5.9 percent for income earned over that amount. It is estimated to generate about $950 million a year in tax revenue, all of which would go to the state’s 178 school districts.
Not surprisingly, proponents and opponents of the measure hailed the study that supported their views.
“This tax is a flawed approach not only to education policy, but to economic policy,” said state Sen. Mark Scheffel, R-Parker. “This (Leeds) study shows that this extreme tax will slow an already fragile Colorado economy.”
Supporters of the second study, however, said theirs is a more accurate analysis because it looked at more than the fiscal impact increased taxes would have on Colorado voters, taking into account the impact an improved education system would have on government programs and the students themselves.
“The most fair way to analyze the economic impacts of Amendment 66 is to include the overall impact that increased investment in education has on Colorado,” said Andrew Freedman, campaign director of the proponents, Yes on 66. “To review the impacts of increased taxes without taking into account the benefits of an improved education system is only looking at half of the equation.”
Meanwhile, a national right-leaning tax think tank, The Tax Foundation, released its 2014 State Business Tax Climate Index last week. The group ranked Colorado as 19th in the nation in business friendliness.
It ranks the state 15th in its individual income tax rate, 21st in the corporate taxes Colorado assesses and 22nd in property taxes.