Heath’s tax increase: It’ll go to the kids…right?" />

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Heath’s tax increase: It’ll go to the kids…right?

Posted by Kelly Maher on August 16th, 2011
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Colorado state Sen. Rollie Heath, D-Boulder, is pushing a $3 billion tax increase onto the ballot for “education” funding. But assuming you even wanted such a tax increase (and I don’t) what are the assurances it would actually go for education?

Coloradans have been burned before.

Amy Oliver of the Independence Institute recently noted that Referendum C, passed by voters in 2005, lifted spending caps for the primary purpose of benefiting “health care, K-12 education and higher education,” but some went to transportation and there appears to be no definitive accounting.

“Legislative Council staff member Kate Watkins confirmed what the Independence Institute has said all along,” wrote Oliver, based on a Colorado News Agency report. “Because money is fungible, no one really knows how the Referendum C money was spent.”

A similar concern is being raised about the tax increase proposed by Heath, which would raise income tax rates from 4.63 to 5 percent and sales tax rates from 2.9 to 3 percent for the next five years.

Although the initiative states that the additional revenue raised with the increase must go to benefit education, skeptics are asking if leaving the allocation of funds to the legislature would have the intended result.

According to Dustin Zvonek of the Common Sense Policy Roundtable:

Appropriation of General Fund revenue is determined by the legislature, and with the composition of the legislature changing every two years nobody can guarantee what Sen. Heath is promising.

During the press conference in May at which Heath introduced the measure (Yep, the same one where he was flanked by a class of fourth graders) an astute reporter asked about the tax increase with respect to the allocation of funds:

Reporter: “Have you figured out a way to ensure that this money actually goes to education when . . . and you avoid the trap Referendum C found itself in?”

Heath: “Well, if you read the language, it was drafted very carefully. It establishes the base of 2011-2012 funding which is basically the budget we just signed, and just approved. All of this money goes above that, and it basically says that this money cannot replace that 2011-12. So for five years, it established 11-12 as the base, all of the money above this . . . and of course as the economy improves, the General Assembly can do more than the base, but it establishes the base. I think it’s very strong language, and I think it pretty much makes certain that this money will all go to education.”

Then the Denver Post’s Tim Hoover took over the same line of questioning:

Hoover: “Is the money just for K-12 or does is also go to…”

Heath: “Higher ed, as well. It’s preschool through higher education.”

Tim Hoover: “Is there a formula?

Heath: No, the General Assembly decides each year how to divvy it up.”

Well, fantastic. I’m sure that the broad definition of “education” will ensure that all the additional tax dollars collected will actually go to what Heath says it will. Just like how we were promised that Referendum C , according to the Colorado Statesman in 2010, was to split the billions of dollars in extra tax revenue “into thirds, with one-third to higher education, one-third to K-12 and one-third to healthcare.”

Oh wait.

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  • Post by Kelly Maher on August 16th, 2011

4 Responses to “Heath’s tax increase: It’ll go to the kids…right?”

  1. [...] tacit support for Prop 103, which would raise the sales tax and income-tax rates for five years, purportedly to fund education. “You’ve probably noticed that the governor has changed his rhetoric dramatically — he’s [...]

  2. [...] Colorado voters were convinced into 2005 to approve Referendum C - a five-year “time-out” from the Taxpayer’s Bill of Rights (TABOR) - which allowed the state to keep and spend billions of dollars it otherwise would have had to return to taxpayers. But we don’t even know where all of that money went. [...]

  3. [...] override on the ballot to raise money for local school districts. Meanwhile, Heath is pushing the statewide Proposition 103 to raise sales and income tax rates, resulting in $536.1 million in spending (purportedly for [...]

  4. [...] as I’ve written previously, it’s easier to sell a tax increase by saying that it’s “for the kids,” [...]

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