The Bell Policy Center today is releasing a report that reviews research on tax increases and their impact on job growth and economic development. Proposition 103, the only statewide ballot initiative, would raise taxes, returning income and sales tax rates to levels that existed in 1999. The revenue raised would help counteract deep cuts to the state's education system.
Proposition 103 on November's ballot will raise about $500 million annually for education over the next five years. It does this by increasing Colorado's income tax rate from 4.63% to 5% and the state sales tax rate from 2.9% to 3%. These are the rates that existed throughout the 1990s – a period of strong economic growth in Colorado.
Opponents of a statewide ballot measure that would raise an estimated $3 billion in new taxes to fund education launched an attack against the proposal this week, claiming it will cost Colorado 119,000 jobs after five years and deal a "crushing blow" to the state's struggling economy.
But backers of Proposition 103 charged that opponents don't understand how to interpret their own data and countered that it's cutbacks to school funding, not higher taxes, that will harm the state's economy.