The Colorado Center on Law and Policy, in conjunction with the Colorado Fiscal Institute and the Bell Policy Center, has prepared a three part series on the effects of Amendment 66. Part 1 examines how investments in education help students and boost the economy. Part 2 looks at the research on how taxes impact economic growth and Part 3 discusses how Amendment 66 will improve the state tax structure.
Investing in education will not only help Colorado students do better in school, it will also give the state a powerful tool to boost its economy. Where education thrives, higher wages, higher productivity and faster economic growth are the norm. Coloradans can give their kids, themselves and future generations a hand up by approving Amendment 66 to the state Constitution this November. It will provide crucial funding to our schools, allowing for smaller class sizes, expanded pre-school and kindergarten and other improvements that will create a lifetime of opportunity for Colorado children and their families.
Raising the income tax to support public education, as voters will be asked to do this fall when they vote on Amendment 66, will not hurt Colorado’s economy, since state taxes have only a minor effect on economic growth. State tax increases or cuts have little influence on business-location decisions, the creation of small businesses or other economic activity, a large body of research shows.1 Other factors, like how the nation is faring economically and how much consumers are spending, are far more important to the economic health of states.
Amendment 66 will restore Colorado’s ability to raise enough revenue to meet our schools’ growing needs and make the income tax more like those of our neighboring states, all without overburdening Coloradans. From the adoption of the income tax in 1937 through 1986, Colorado used a “tiered” income tax, where tax rates rose along with a taxpayer’s income. Shifting to a single-rate income tax in 1986 seriously harmed the state’s ability to fund education. Amendment 66 will reinstate Colorado’s tiered personal income tax, making Colorado more like other states, the vast majority of which employ a tiered income tax.
Amendment 66 will not exhaust the resources of Coloradans, even as it brings in an additional $950 million in revenue dedicated to public education. Colorado will remain well below the national average in state and local tax collection. Furthermore, investing $950 million in education is expected to strengthen and grow the economy, not slow it.