When state Sen. Rollie Heath, D-Boulder, speaks of Colorado's budgetary woes, he speaks of Band-Aids that can't stop the bleeding, wounds that are hard to heal, and rearranged deck chairs on the Titanic. He's particularly worried about public education.
"After voting on the '10-'11 budget, which cut education by roughly $260 million and took a considerable amount out of higher ed — I voted for it, but I never felt very good about it — and I'm thinking to myself, 'Something's wrong with this picture,'" Heath says. "Colorado is among the 10 wealthiest states in the nation. Yet in 40 years we've gone from a state that really invested in education to one that's at the bottom of the barrel, literally, in its funding for preschool through higher ed.
"I said to myself, 'I'm not going to sit here in 2012 voting on the 2013 budget and vote on another horrendous cut to education without doing something about it.'"
That something is Proposition 103, the only statewide measure to make it onto this year's ballot. If passed by voters in November, Proposition 103 would raise the state income tax from 4.63 percent to 5 percent and the state sales tax from 2.9 percent to 3 percent, returning them to 1999 levels for five years. The revenue generated — an estimated $3 billion — would go toward funding education in Colorado.
'A deep hole'
Proposition 103 is the latest attempt to deal with Colorado's worsening state budget crisis, which has been exacerbated by the combined impact of the Gallagher Amendment, Taxpayer's Bill of Rights (TABOR) and Amendment 23, all of which were passed by voters.
Gallagher was passed in 1982 after Colorado property owners demanded that the state Legislature do something about increasing property taxes. It requires a 45-55 percent split between residential and business property through the state and sets rules about how property values are assessed, among other things. TABOR, passed 10 years after Gallagher, requires a vote of the people before government can raise taxes and sets limits on how much money the state can keep. Amendment 23, an attempt by voters to circumvent TABOR, requires the state to fund K-12 education at the rate of inflation plus 1 percent. The 1 percent provision expired a year ago, while budget difficulties during the recession have resulted in cuts to areas of K-12 funding that an administrative ruling determined aren't protected under the language of Amendment 23.
The combined result is less revenue in the state's general fund with a constitutional requirement to spend a certain amount on education. Structurally, it's a serious problem.
"The problem with Amendment 23 is that it did not raise a penny," Heath says. "All it did was rearrange the chairs on the deck of the Titanic. We have done nothing to increase the revenue."
A study released by University of Denver researchers earlier this month offered a grim outlook on the state's economic future, predicting that the state's current funding gap will eventually consume the budget across the board. By 2025, the money in the state's general fund won't even cover Medicaid, prisons and schools.
In other words, Colorado is in trouble. The report suggested approaches to improve the outlook, including a variety of tax increases and budget cuts.
"The key point in there is that there's no way we're going to grow out of this," says Heath, who chaired the commission that ordered the study. "The structural problem is so deep. There's such a deep hole that no matter how good the economy gets, there's no way we're going to grow out of it."
Heath cautions that Proposition 103 won't solve the problem, either. That's why he decided to limit its reach to five years.
"We don't want to give people the impression that this is going to solve our problems, because it's not," he says. "All this does is replace the funds that we've cut the past two years."
Jon Caldara, president of the Independence Institute, a libertarian think tank in Lakewood, opposes Proposition 103.
"The economy is growing at perhaps 1 percent," he says. "I think it's a pretty fair question to ask why the state government should get an 8 percent increase in its revenues on this slow growth. ... Why an 8 percent increase in taxes when our anemic economy is only growing at 1 percent?
"Income tax increases like this are anti-employment," he continues. "If we want people to have jobs, then employers and people who buy goods and services who need employees to do it — they need to have more money in the economy. Talk about killing a fragile economy. This proposal would do just that."
But Heath disagrees. Supporting education fosters economic growth, he says.
"I know from practical experience that the key to attracting companies to this state, to attracting people that you want in this state, is education," he says. "Invariably, one of the first or second questions you get are, tell me about your schools. Tell me where my kids are going to school. How good are they? And then tell me about the schools where I'm going to hire my employees."
Heath says arguments that Proposition 103 would hurt the state's vulnerable economy don't hold water with him.
"People would argue to me that taking it back to where we were in 1999 is going to devastate the economy and jobs. I just can't buy it because we know we did very well when taxes were at that level," he says.
The time to act is now, Heath says.
"We're not going to solve the structural problems in the next three years," he says. "In the meantime, we've got kids suffering while the adults are trying to figure this out. And five years is a lifetime in a kid's life."
Multiple groups and organizations have signed on to support Proposition 103, including the Colorado Council of Churches.
Democratic Gov. John Hickenlooper, however, is not taking a position.
"The governor made a commitment to the people of Colorado when he ran for office that he would not campaign for a tax increase this year, and he intends to keep his word," Eric Brown, Hickenlooper's director of communications, told Boulder Weekly. "While he has no plans to endorse or oppose this proposal, he respects Senator Heath's passion to keep education a funding priority in Colorado. Like any grassroots effort, this is a question for the voters of Colorado to decide."
Despite the down economy, Heath feels optimistic about Proposition 103's chances at the polls. Coloradans care about education, he says, and across Colorado parents are feeling the sting of education cuts, as some rural districts drop to four school days a week. But the biggest sign of support came in the 142,000 signatures volunteers gathered to get the proposal on the ballot, he says.
"What we're going to find out is whether there are enough people out there who've felt the pain enough to realize how significant this is — the injustice we're doing to our kids — to support it."
Pamela White is the editor of Boulder Weekly, where this story first appeared.