It appears that, thanks to the upheaval and social distancing caused by the current coronavirus pandemic, the political process in Colorado might be undergoing some significant — if temporary — changes. And those changes could affect your tax burden, over the long term.
One of the powers reserved to the people of Colorado by our state Constitution is the right to petition measures onto the ballot each November. Normally, this petitioning process takes place “in person” when an individual carrying a petition asks you (or me) to affix our signature, name, and address to a paper sheet. The petitioning individual is required to make an effort to ensure we understand what we are signing up for.
Once a sufficient number of signatures have been gathered, the petitioning person or organization submits the paper sheets for review, to ensure that the signatures represent valid electors. In Colorado, citizen initiatives can address changes to existing laws, add new laws onto the books, and even amend the Colorado Constitution itself. A number of organizations were hoping to petition proposals onto the November 2020 ballot, but a challenging and time-consuming process has been made nearly impossible due to government COVID orders, a lack of economic activity and citizen movement, and the fear many people feel about proximity to strangers (or even, proximity to close friends.)
One of the issue committees hoping to circulate their ballot petitions this spring and summer calls itself ‘Fair Tax Colorado’. Their tax proposal, titled Initiative 271, would reduce Colorado’s income tax rate from 4.63% to 4.58% for persons earning up to $250,000 a year. Presumably, this would reduce (slightly) state income taxes for nearly every working family in Archuleta County.
But this initiative — if approved by the voters — would also increase state income taxes on persons earning more than $250,000. Wealthy taxpayers would pay a 7% rate on their federal taxable income after the first $250,000 and up to $500,000. The proposal would thus create a two-tiered tax structure for the state, to replace the flat tax rate currently in place — and in doing so, would supposedly increase the overall amount of taxes available to the state government. Or so they say.
Last Friday, May 15, Governor Jared Polis signed an executive order that suspended several laws regulating the petition process, to will allow signatures for ballot initiatives to be gathered by email and mail… pending new rules to be developed by Secretary of State Jena Griswold.
“This is a challenging time for Colorado, but we must not sacrifice our democracy and the right of citizens to petition due to the pandemic,” Polis wrote in a statement. “Protecting our democracy, access to the ballot and making sure citizens can qualify ballot measures and can qualify as candidates to run for office during this time is critical.”
The folks behind Initiative 271 no doubt cheered the governor’s executive order.
But on Monday morning, a group of top Colorado business leaders calling themselves ‘Colorado Concern’ filed a lawsuit in Denver District Court, challenging the governor’s authority to suspend petitioning requirements.
From an article last week in the Colorado Sun:
“A governor does not have the power to unilaterally throw out Colorado’s signature gathering process,” said Chris Murray, shareholder at Brownstein Hyatt Farber Schreck, in a news release. “Colorado’s Constitution guarantees that signatures will be gathered transparently in front of a third party. Governor Polis’ executive order undermines the integrity of the in-person process that Coloradans have long demanded…”
…The rules aren’t expected to be finalized until early June. Signatures can’t be gathered by email and mail until the rules are finalized.
Writing as an individuals who helped petition a political issue onto the Town of Pagosa Springs ballot this year — in my case, a proposed amendment to the Pagosa Springs Home Rule Charter — I believe we ought to be concerned about the governor’s actions. As mentioned, an individual carrying a paper petition has several responsibilities to fulfill, and chief among them is to answer questions about the petition. What exactly is being proposed here? What are the likely effects — pro and con — of this particular change? How will the change impact me personally?
Valid questions. But how can petitioners can possibly engage in informative discussions with citizens, if their petition is gathered via mail or internet?
How can I decide which petition to support?
The decision whether to sign ‘this or that’ petition will apparently come into play this summer, because a group calling itself ‘Energize Our Economy’ has announces a petition drive for a ballot initiative that will reduce the flat Colorado state income tax rate from 4.63% to 4.55%.
A tax reduction for everyone — rich and poor alike.
The signature gathering process for Initiative 306 reportedly began on Monday. From a press release sent out by the right-leaning Independence Institute:
The purpose of this ballot initiative is to get Colorado’s economy back to its former strength, by putting money back into the pockets of those who earned it.
This flat-rate tax cut will also offer voters an alternative to a progressive income tax increase that will also be on the ballot, Initiative #271, that seeks to raise income taxes by $2 billion a year.
“The Colorado economy — pre-COVID-19 — was on fire, thanks to our Taxpayer’s Bill of Rights and our flat state income tax,” said Jon Caldara, President of the Independence Institute, and co-ballot proponent of the tax rate reduction. “We look forward to giving the voters a real choice between a progressive tax increase which will be billed as a middle-class tax cut, and a real tax cut for every Coloradan.
“Question is: which one is actually the tax cut? Hint: Not the ballot question that starts “Shall state taxes be increased $2,000,000,000 annually.”
Colorado State Senator Jerry Sonnenberg, co-ballot proponent, has seen first-hand how unemployment, caused by Colorado’s COVID-19 related shutdowns, has affected Coloradans — including those in the rural areas. “Small business owners all over Colorado are feeling the pain of these shutdowns, and their incomes have suffered as a result,” Sonnenberg said. “In many rural communities, there are no big-box stores, just small businesses. An across the board income tax rate reduction will allow these business owners and their employees to keep and spend more of their own money. State government doesn’t need to increase its already bloated budget.”
Colorado Rising State Action, Unite for Colorado, and Americans for Prosperity are coalition partners in support of this reduction in the state income tax rate.
In Colorado, when two conflicting ballot measures appear on the ballot, the measure that receives the most ‘Yes’ votes becomes the law, and the second measure is invalidated even if it also received overall approval by the voters.
Are either of these ‘tax reduction’ measures is likely to land on the ballot… assuming Governor Jared Polis’ executive order, allowing mail and online signature gathering during the COVID crisis, is found to be legally valid?