As the Bell Policy Center has talked to groups and individuals across the state about the important statewide measures on the 2020 ballots, many similar questions pop up. While our 2020 Ballot Guide has lots of useful information and recommendations, only so much can fit on a page. Given how critical many of these ballot questions are to the future of Colorado, we decided to answer some of the more common questions, in the hopes our answers might clear up some confusion and help voters make up their minds in an informed way.

Amendment B

Wouldn’t this be bad for business/non-residential properties?

If Amendment B does not pass, non-residential properties — think restaurants, commercial buildings, and vacant land — could see higher property taxes and an even larger gap between what they pay in property taxes and what residential properties pay. Based upon the current property assessment rates (i.e. 7.15 percent for residential and 29 percent for non-residential), non-residential properties pay more than four times the amount in property taxes than residential properties. If Amendment B does not pass, residential rates are likely to decrease to around 5.88 percent, while non-residential rates will remain at 29 percent. This would mean non-residential properties would pay almost five times the amount residential properties would.

Property taxes are a combination of assessment rates, determined at the state-level and mills, or the amount of tax paid for every $1,000 in property value. For communities with “floating mills” (meaning the mills automatically increase if assessment rates drop), non-residential property owners will automatically see a significant property tax increase. Mills are applied equally to both residential and non-residential property. For communities that do not have floating mills, local governments will likely raise mill levy rates to generate the same level of revenue needed to maintain current funding levels for schools and services. Any increases to mill rates would have an even greater disproportionate impact on non-residential properties than the current system or if Amendment B passes.

With many families struggling to deal with rising residential property values, why shouldn’t we want a reduction in the residential assessment rate?

Many families in Colorado have been struggling to remain in their homes and neighborhoods due to the dramatic increase in residential home values and the associated property tax increases. While the possible reduction in property taxes that could occur with reduced residential assessments may help these families, the possible reductions in school district funding of close to $500 million and lost local services estimated at nearly $200 million would have dramatic consequences for their communities. The reductions in residential assessments, or the percentage of a property’s total value that can be tax, that the Gallagher Amendment causes benefit wealthier households with higher property values the most. While targeted relief for low- and middle-income families is not on the ballot, those proposals would better help families without the same drastic consequences to needed education and other public services.

Proposition 116

What would get cut from the budget if this measure passes?

This is the key question Proposition 116 leaves unanswered. Based upon the larger cuts required to deal with lost revenue from COVID-19, cuts could be seen in any part of the state’s budget. Proposition 116’s cut of $357 million over two years would force the budget writers in the legislature to put everything under a microscope. That means education, transportation, health care, and postsecondary education could see even more reductions. Lawmakers have already reduced the state budget by 25 percent, so there are no easy choices left and further cuts will reduce core services.

Wouldn’t the economy recover better if people kept their money, instead of the government spending it?

There is little to no evidence the proposed tax cut would boost a recovery. In contrast, there is strong evidence further cuts to governmental services and public jobs lost would prolong Colorado’s recession. As evidenced by the Trump tax cuts and other state-level tax cuts that focus primarily on providing tax relief for the wealthiest, these measures do not lead to larger economic gains and often lead to devastating cuts to vital public services. A $37 average tax cut for the Coloradans may be helpful during this struggling time, but Coloradans lose almost five times that amount in investments like child care, education, or transportation. There is evidence that large targeted relief to middle- and low-income families can stimulate the economy, but Proposition 116 is targeted to the wealthiest Coloradans and would not have those stimulatory effects.

Proposition 117

So, what exactly is an enterprise fund? 

Enterprise funds were established by the Taxpayer’s Bill of Rights (TABOR) and are government-owned businesses. They cannot receive more than 10 percent of their funding from government sources and are funded through user fees. As opposed to taxes, user fees are dollars spent by someone in exchange for a specific good or service. Enterprise funds can bond — meaning take out debt on the backs of promised future revenue — and revenue from enterprise funds does not go to the General Fund. Therefore that revenue is not subject to the revenue cap that governs the dollars in the General Fund. Enterprise funds are audited annually to ensure compliance with all of the above requirements.

Do existing enterprise funds have to be voted upon if Proposition 117 passes? How do we know what enterprises need voter approval?

Proposition 117’s vague language leaves too many scenarios left unanswered. Current enterprise funds are grandfathered and would not need voter approval. However, enterprise funds do sometimes fall out of enterprise status, which would force those revenues to be counted as part of the General Fund before they are designated as enterprises again. It is unclear whether upon re-authorization they would be subject to voter approval. There is also the question of what happens if an enterprise fund is projected to accrue $90 million in revenue over the first five years — which would not trigger an election under Proposition 117 — but ends up collecting $100 million after five years. Is the initial projection the determinative factor or the actual revenue? Does the enterprise fund in that case have to be voted on, even if it is already active? That will be up to the courts to decide and throws a lot of murky questions into the mix that could leave too many vital services in jeopardy.

Why are fees for enterprise funds distinct from other types of fees?

Enterprise funds were specifically created as a distinct tool within TABOR and are government-owned businesses. But unlike many other fees — such as licensing and insurance fees — enterprise funds are not counted as part of the General Fund, and therefore, not subject to the revenue cap. The revenue cap is a limit on the amount of money a government can spend, regardless of how much it collects in taxes. Enterprise funds are separate from that, and as a result, do not crowd out General Fund revenue from going to other critical programs. For example, in 2004 the state legislature and Republican Governor Bill Owens saw tuition for postsecondary education institutions was making it extremely difficult to fund health care, K-12 education, transportation, and other public services. They decided to create the Higher Education Enterprise to ensure Colorado could provide funding to these other programs. If Proposition 117 was in place at that time, every Coloradan would have had to vote on whether college tuition should be part of the budget or not — a decision that would have had potentially terrible consequences.

Proposition 118

My employer already offers a great paid family and medical leave plan. Would I lose this benefit if Proposition 118 passes?

The drafters of Proposition 118 recognized there are plenty of employers throughout Colorado who want to do right by their employees, and because they have the financial ability to do so, already offer paid leave benefits. That’s why, if Proposition 118 passes, businesses don’t have to participate, or pay into, the state-run program if they offer an equivalent or stronger benefit. Importantly, nothing in this measure prevents employers from offering more generous paid leave benefits to their employees. Instead, the statewide requirements are simply meant to be a guaranteed floor employers can build upon and tailor to create a stronger benefit that meets their workforce’s unique needs.

Do we know if this program will be sustainable?

Yes, we do. Multiple, nonpartisan studies have shown the long-term viability of the program and benefit created through Proposition 118. The most recent in a long list of analyses came from an outside actuarial firm commissioned by a legislatively mandated, nonpartisan task force. In addition to these robust studies, Colorado also has a multitude of paid leave sister programs in states across the country it can look toward. Growing in number, state-facilitated paid leave programs are already operational in five states. The oldest of these in California and New Jersey, have been running for over a decade. Because they are strong, resilient, and sustainable, lawmakers in both states continue to strengthen available benefits.

Have more questions as you’re filling out your ballot this year? Check out our 2020 Ballot Guide!