The Colorado Legislature passed a comprehensive education finance overhaul measure in its 2013 session, realigning for the better several critical components of how schools are funded and, more importantly, calling for a $1.1 billion increase in state funding for education from early childhood through high school. Per the requirements of Colorado’s Taxpayer’s Bill of Rights, that latter bit is contingent upon voter approval, and until this week, it was unclear just how taxpayers would be asked to chip in to the much-needed education kitty. A two-tiered proposal has emerged as the answer, and it is fair and practical.
Under the revised finance structure that Senate Bill 213 establishes, K-12 education would receive a $900 million boost in operating funding carefully targeted at areas known to be effective. It would be paid for by an income tax increase administered in two levels. The current state income tax rate is 4.63 percent for all earners. Under Initiative 22, that rate would increase to 5 percent for those who earn $75,000 or less annually and step up to 5.9 percent on income more than $75,000. That approach is a progressive one that does not unduly burden Colorado’s lower earners, and fairly asks higher earners to pay a proportionally larger share of the cost of educating the state’s young people.
The notion underlying this increase is one around which the vast majority of Coloradans – individuals and interest groups – support: that the state’s schools need more money in order to effectively prepare students for the future as workers and postsecondary learners. That reality requires an investment and those who earn in higher income brackets are better prepared to contribute a higher percentage of that investment. And it is an investment: well-funded and sensibly, effectively structured public education gives Colorado’s children the tools they need to be the future innovators and entrepreneurs who will keep the state economically competitive nationally and globally. A climate in which education is a priority benefits businesses today and well into the future. Colorado has long needed to improve that environment, and SB 213 takes significant steps in that vein. Initiative 22 is the next critical component.
While there is widespread support for the taxing structure the initiative lays out, there also are early rumblings that it unfairly burdens businesses and will hamper their earning potential. Those critics say that the only fair way to assess the tax is by a flat rate across all earning levels. That is a short-run view that overlooks the far-reaching vision of the bill and companion tax measure: one that aims to equalize and improve the educational system that has for too long been hampered by complicated funding mandates.
As SB 213’s primary sponsor, state Sen. Michael Johnson, said in The Denver Post, the formula outlined in Initiative 22 is the best answer to the vexing question of how to make the system fair: “The flat-tax proposal would make Colorado the single-highest flat tax in the country, and it would represent twice as large an increase on the average taxpayer as the two-step proposal does.”
He is right, and Initiative 22 deserves Coloradans’ support.