DALLAS — As Colorado’s legislature seeks cuts to balance the budget amid falling revenue, Sen. Rollie Heath is proposing a temporary $1.6 billion tax hike to reduce the impact on public schools.
Heath, a Boulder Democrat, would restore sales and income tax rates to the levels of 10 years ago. The ballot initiative, if approved by the General Assembly, would require voter approval.
Heath noted that the state cut about $260 million from its K-12 education budget in fiscal year 2010-11.
The most recent proposal for fiscal 2011-12 would reduce K-12 funding by another $375 million, and it includes a $36 million general-fund cut to higher education. The budget, which is under discussion by lawmakers, would take effect July 1.
Democratic Gov. John Hickenlooper proposed large cuts to K-12 schools that would amount to $500 per student.
Before the recession in 2006, Colorado schools had $1,400 less per student than the U.S. average, Heath said.
“This is unacceptable to me,” Heath said in a written statement. “As a businessman, I fully understand that we need economic development in Colorado to continue climbing out of this recession. I also understand that education equals economic development, which in turn equals jobs.”
Hickenlooper and House Majority Leader Amy Stephens, R-Monument, have said the public is in no mood to raise taxes. Under Heath’s proposal, income taxes would rise to 5% and sales taxes would increase to 3% for three years.
Stephens proposed cutting new taxes adopted last year on software and Internet sales to encourage job creation.
However, Heath cited a Denver University study last week that said even a booming economy would not generate sufficient tax revenue to maintain Colorado schools, prisons and roads.
The report from the DU Center for Colorado’s Economic Future was commissioned by the 2010 legislature. Spending on education and Medicaid will continue to grow faster than state revenues for the next decade and a half, according to the report, reducing funds for other programs.
“The state general fund is increasingly structurally unbalanced and unsustainable,” said Charlie Brown, director of the DU center.
If the proposed tax hike appeared on the November ballot, it would come one year after a conservative ballot initiative to limit revenue for schools, sharply restricting school debt and banning all state debt.
The proposals were defeated by wide margins.
