Colorado State Ballot Issues In 2022

Here are some recommendations on the eleven state ballot measures in Colorado. A separate post will address Denver's many ballot issues.

This year's ballot has more good proposals and fewer awful proposals proportionately than usual, and is part of Colorado's usual far too long ballot.

Quick Summary

Vote NO on Proposition 121 and Amendment E. The opposition to Proposition 121 is a strong no. The opposition to Amendment E is a weak no.

Vote YES on Propositions 122, 123, 124, 125, 126, FF and GG, and on Amendments D and F.

Analysis

• Prop 121 (lower state income tax rate): NO. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

It would permanently lower Colorado's normal flat state income tax rate from 4.55% to 4.40%, although due to TABOR refunds the actual state income tax rate in 2022 to 2024 will be 4.50% due to high tax collections during an economic boom. But while the state income tax rate can automatically return to 4.55% to stabilize state revenues if there is a recession in the status quo, if this measure passes, raising state income tax rates to maintain the state's ability to fund itself in a recession would require another ballot initiative. 

This would reduce state revenues in the 2023-2024 fiscal year by an estimated $382.3 million dollars which is a 3.3% reduction in state income tax revenue. Colorado's state budget is already too tightly constrained to buy all the government services that the state needs (like education, higher education, Medicaid funding, and transportation). As a result Colorado has some of the least well paid teachers relative to cost of living of any state in the United States.

Income taxes are the best way to raise state revenue. It is administratively efficient since to rides on the coattails of the federal income tax system with which everyone in Colorado must already comply. It taxes with respect to ability to pay. It is more a stable revenue stream and less regressive than sales tax and does less to distort economic decision making than the state sales tax.

Colorado would be better off cutting sales tax and relying less heavily on property taxes to fund schools, and replacing that lost revenue with higher state income taxes that are more fair and impose less of a state level administrative burden.

For most Coloradans, the tax break is very modest, less than $63 a year for more than three-quarters of people in Colorado, but it is a break of an average of $6,647 a year for the less than 1% of people in Colorado with than $1,000,000 a year of income, and even more to large corporations (mostly publicly held big businesses) that do business in Colorado.

• Prop 122 (psychedelics as medicine): YES. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

Like Colorado's legalization of marijuana, it wouldn't change federal laws that make psychedelics illegal Schedule I controlled substances that can only be prescribed under extremely narrow FDA trial regulations, just like marijuana under federal law.

Prohibition doesn't work. Regulated access to drugs that have potential mental health benefits (in this case, particularly to treat major depression in a fast acting but long lasting way) does.

These drugs aren't a cause of major societal malaise and state level legalization would reduce the societal harm caused by their prohibition itself and weaken organized crime.

• Prop 123 (fund affordable housing): YES. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

The estimated $145 million a year (up to 0.1% of state taxable income at most) comes from TABOR refund excesses associated with existing state income tax revenues, and would be used for an affordable housing fund. 

The fund would make grants to non-profit land banks that buy property with an aim to make affordable housing available, funding for affordable rental properties that allow tenants to build some savings for a future down payment from their rent expense, favorable financing for affordable housing construction, down payment assistance to first time home buyers, rental assistance and rental vouchers and eviction defense for homeless people or people imminently at risk of becoming homeless, and grants to local land use agencies to facilitate their ability to be more affordable housing friendly.

Homelessness and lack of affordable housing is a huge problem in much of Colorado and this measure finds ways to spend money to throw the kitchen sink at leveraged ways to minimize the problem. The amount of money is modest compared to the scope of the overall problem which is certainly doesn't completely solve, but it would make a dent in the problem with "found money" that would otherwise go towards TABOR tax breaks or refunds of some kind.

• Prop 124 (increase liquor license count per retailer): YES. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

Propositions 124, 125 and 126 are about ceasing to use alcohol regulation laws to mandate economic regulation of business firm structures in ways unrelated to public health and safety (or enhancing public safety) without meaningfully changing the 2022 status quo of access to alcohol.

There is no virtue in limiting liquor stores to small family owned chains rather than medium sized chains. Internal alcohol industry firm economics should be left to the marketplace.

Currently liquor store owners can have 3 locations and liquor licensed drugstores (basically grocery stores with associated liquor stores and pharmacies like Target in Glendale) can have 8 locations. 

In the status quo, liquor stores can have 4 locations in 2027 and liquor licensed drug stores can have 13, and the measure would allow liquor stores to have 13 locations. 

In the status quo, liquor stores can have 4 locations in 2032 and liquor licensed drug stores can have 20, and the measure would allow liquor stores to have 20 locations. 

In the status quo, liquor stores can have 4 locations in 2037 and liquor licensed drug stores can have unlimited numbers of locations, and the measure would allow liquor stores to have unlimited numbers of locations. 

• Prop 125 (allow grocery beer license holders to sell wine): YES. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

Propositions 124, 125 and 126 are about ceasing to use alcohol regulation laws to mandate economic regulation of business firm structures in ways unrelated to public health and safety (or enhancing public safety) without meaningfully changing the 2022 status quo of access to alcohol.

This is already legal for full strength beer under 1,819 licenses statewide, and grocery stores with one of the 26 existing drug store licenses can sell wine at up to eight locations already (13 each in 2027, 20 each in 2032, and unlimited in 2037). Grocery stores that sell wine are not a menace to the public and are the norm in many other states and internationally. 

There is no rational reason to treat legal permission to sell wine differently than legal permission to sell beer.

There is no limit on the number of locations per firm that sells beer and there are 1,819 current beer sale licenses. There are currently 1,582 liquor store licenses in Colorado, each of which can have 3 locations (4 starting in 2027), which could be expanded is Prop 124 passes.

• Prop 126 (allow 3rd party liquor delivery): YES. 

This was proposed by a citizen's petition drive to amend a state statute related and requires majority support in the election to pass.

Propositions 124, 125 and 126 are about ceasing to use alcohol regulation laws to mandate economic regulation of business firm structures in ways unrelated to public health and safety (or enhancing public safety) without meaningfully changing the 2022 status quo of access to alcohol.

Currently bars and restaurants can deliver alcohol with their own employees who are bar tender certified and subject to the same rules as bar tenders. This would allow third-party delivery firms with bar tender certified deliver people subject to the same regulations as bars to deliver alcohol in the same way. Also, alcohol delivery of this kind currently sunsets in July of 2025, while this would make it permanent.

This reduces unnecessary economic regulation of firm structure in connection with a popular service that already exists. It also would, by making this permanent, reducing drunk driving to get bar and restaurant style drinks and making bar and restaurant style drinks available to people who mobility limitations like home bound disabled people.

• Prop FF (school lunches): YES. 

This was proposed by the state legislature to amend a state statute related to fiscal matters with bipartisan support and requires majority support in the election to pass. Legislature crafted measures are usually better crafted and are less likely to have serious drafting flaws that impair the quality of the measure than citizen initiatives drafted by a small group of sponsors working without public input into the drafting process.

This would fund free school breakfast and lunch for all public school students in Colorado. 

This is something that is currently available only to low income students (incomes of under $36,075 a year for a family of four that fills out lots of paperwork, with reduced price meals for families with incomes under $51,338 for a family of four that fills out lots of paperwork) and is predominantly funded with federal grants. 

Essentially, it converts a means tested welfare program (like TANF) that requires lots of paperwork from low income families and school administrators into a categorical benefit program (like Social Security or the educational part of public K-12 education) for far more students with far less paperwork that makes eating school meals simply part of the overall scope of what public schools do. 

This is something that schools in many countries and many U.S. private schools already do as a matter of course. It is also something that some schools with very high proportions of low income students already do on a pilot program basis.

It means that no child is denied meals because they can't pay for school breakfast or lunch. Many children in the current system don't get all the food that they should despite the free and reduced lunch program because their low income families who don't have their act together enough to fill out the necessary paperwork by the relevant deadlines and are really struggling for basic food needs for children. It reduces the sigma and family paperwork burden faced by students who are in the current means-tested school lunch program.

It would also create state grants for school lunch programs to buy Colorado sourced food and to train them about how to do this, and to pay low paid school lunch cooks and servers or volunteer school lunch cooks and servers stipends or increased wages. 

This change lowers the amount of state income tax deductions that can be claimed by taxpayers with more than $300,000 of annual income (roughly the top 5% of income earners in the state). 

For someone claiming only the standard deduction, this is a tax increase of about $450. But many people with this taxable income claim more state income tax deductions that would be limited resulting in an average tax increase of $813 for taxpayers with incomes of $300,000 to $499,999, of $823 for taxpayers with incomes of $500,000 to $999,999, and of $1,166 for taxpayers with incomes of $1,000,000 or more. So, the funding would make Colorado's income tax slightly progressive (and since many state tax deductions have a regressive distributional effect, it really just makes the state income tax closer to flat). This is estimated to raise $100.7 million of additional tax revenue in the 2023-2024 fiscal year. It would also increase the amount of federal school lunch funding that Colorado schools would be eligible for statewide.

Also, this measure is an expense cut, economically equivalent to a progressive tax cut, to families with children in public schools, many of whom are middle class even if they don't qualify for free or reduced lunch programs, who are a lower average income population than Colorado as a whole.

• Prop GG (initiative financials): YES. 

This was proposed by the state legislature to amend a state statute related to fiscal matters with bipartisan support and requires majority support in the election to pass. Legislature crafted measures are usually better crafted and are less likely to have serious drafting flaws that impair the quality of the measure than citizen initiatives drafted by a small group of sponsors working without public input into the drafting process.

This proposition would require fiscal charts to accompany all initiatives that change state income tax rates. It would promote more informed voting on these measures. 

Many people don't understand how disproportionately income tax rate changes impact the rich relative to the general public, and this would make this information more widely known at the moment that it counts.

• Amendment D (new judicial district judges): YES. 

This was proposed by the state legislature to amend the state constitution with bipartisan support and requires 55% support in the election to pass. Legislature crafted measures are usually better crafted and are less likely to have serious drafting flaws that impair the quality of the measure than citizen initiatives drafted by a small group of sponsors working without public input into the drafting process.

This is a one-off change to allow existing judges in the new 23rd judicial district to be assigned to either of the new districts rather than having all new 23rd judicial district judges have to reapply to the jobs  that they were doing pre-split from scratch. 

Essentially, this is a housekeeping measure that fixes clumsy wording as applied to a situation unforeseen by the people who wrote it. 

Ideally, the change wouldn't have been specific to the 23rd judicial district and apply to any future judicial district split, but since this issue comes up so infrequently, this minor flaw isn't a big deal and doesn't detract from the desirability of this change.

• Amendment E (property tax homestead exemption): NO. 

This was proposed by the state legislature to amend the state constitution with bipartisan support and requires 55% support in the election to pass. Legislature crafted measures are usually better crafted and are less likely to have serious drafting flaws that impair the quality of the measure than citizen initiatives drafted by a small group of sponsors working without public input into the drafting process.

The tax break is a 50% reduction in the first $200,000 of actual value of the residence for property tax valuation purposes, so the full benefit which is worth an average of $630 per residence, is available to almost every homeowner who qualifies for the tax break. 

If this measure passes, it will be available to about 490 surviving spouses who live in their late spouse's home, of veterans who are killed in action, and of 100% disabled veterans who currently qualify for this property tax break who die of service related injuries. This tax break is currently available to 100% disabled veterans (about 8,900 households currently qualify on this basis) and to home owners age 65 and over who have owned their homes for at least ten years (about 250,000 households currently qualify on this basis). Current law provides $156.5 million of property tax breaks for people age 65 and over who have owned their homes for at least 10 years and $5.6 million of property tax breaks to 100% disabled veterans.

While I favor voting "no" on  this measure, it isn't a "strong no." The only redeeming virtue of this measure is that it only affects about 490 surviving spouses at a total annual cost of the measure statewide is about $288,000 a year in a state with more than 5 million people, an increase of about 0.2% in the total cost of the property tax homestead exemption program. 

In other word, it is a drop in the bucket fiscally, and honestly, not even that big of a break for the people who are entitled to it that would require a moderate amount of paperwork to claim. In most cases, the lifetime benefit to the recipient Gold Star widow/widower homeowners would be less than $6,000 each before they are entitled to the tax break in their own right.

But we don't need to clutter the state constitution with tiny bullet shot sized tax privileges to especially worthy people. 

It is the federal government's job to adequately support veterans and their widows and widowers, not local taxpayers. 

Also, on the merits, this group of 490 people does not direly need another government subsidy.

This population has a much higher net worth and a much lower poverty rate than the average person in Colorado. It benefits non-disabled people under age 65 who no longer have a disabled spouse, and people over age 65 who no longer have a disabled spouse who have owned a home for less than ten years (until they have owned it for ten years). All of them already have some significant veteran's widow's benefits in addition to their own earnings from employment, Social Security benefits, or retirement benefits.

The language of the measure is ambiguous on the question of whether a surviving spouse who remarries continues to qualify, and a surviving spouse who relocates to a different home definitely doesn't qualify so their freedom to decide where they live after their spouse dies is restricted.

If it isn't construed to apply to remarried surviving spouses of deceased veterans, it also creates a small economic disincentive for widows of disabled veteran's to remarry, as opposed to merely cohabiting with a new partner, which isn't particularly socially desirable. If it doesn't, then the beneficiaries include remarried widows and widowers who need a modest property tax break even less than those who do not have a new domestic partner.

• Amendment F (charitable gaming): YES. 

This was proposed by the state legislature to amend the state constitution with bipartisan support and requires 55% support in the election to pass. Legislature crafted measures are usually better crafted and are less likely to have serious drafting flaws that impair the quality of the measure than citizen initiatives drafted by a small group of sponsors working without public input into the drafting process.

Historically tight legal limitations on gambling have rightfully been eroding for years, continuing the trend of regulation rather than prohibition of vice in Colorado. Charitable bingo and raffles co-exist with far more commercially run state lottery games, casino gambling in limited locations in the state, and sports betting that is even available from your phone. Against this background, slightly easing regulation of charitable bingo games and raffles doesn't meaningfully contribute to the influence of gambling in daily life in the state.

This would make it slightly easier to for charities to sponsor bingo games and raffles in the short run, and reduce state constitutional regulation of charitable bingo games and raffles in the medium to long term.

Charities would have to have been in existence for only three years rather than five years to qualify to sponsor these games for the first three years of the measure, and starting in 2025 this issue would be regulated by state statutes rathe than the state constitution.

Until July 1, 2024 (for the first two years of the measure), it would allow charitable bingo and raffle operations workers, who are now required to be volunteers, to be paid up to the minimum wage. Restrictions on what charitable bingo and raffle operations workers can be paid would be removed from the state constitution after that point.

Since regulation of charitable gaming is already in the state constitution, changes to these regulations need to be constitutional amendments too, but this reduces the amount of state constitutional regulation of charitable bingos and raffles in the long run.