Colorado Voters Dump Amendment 66... and Approve High Taxes on Marijuana
Bill Hudson | 11/6/13

With most of the state's votes counted following the November 5, 2013 election, unofficial results show voters strongly opposed to the $1 billion income tax hike known as Amendment 66.

Voters statewide rejected the income tax measure, 66 percent to 34 percent — a nearly 2-to-1 margin.  The defeat resulted largely from voters in Colorado's two most populous counties, El Paso County and Jefferson County.

Unofficial results from Chaffee County show slightly more than 70 percent of the ballots rejecting Amendment 66.

The constitutional amendment — in conjunction with SB 13-213, passed by a Democratic legislature last spring — would have changed the formula for funding Colorado public education, funneling money into expanded preschool programs and increasing funding for K-12 schools with high numbers of at-risk students.  The measure would have increased income taxes from 4.63 percent to 5 percent for taxable income up to $75,000 a year; that's equivalent to about $472 for families earning $75,000 in taxable income per year.  Incomes above $75,000 would have been taxed at 5.9 percent.

Under SB 13-213, some school districts would have needed to get property owners to pass local mill levy increases in order to receive full state funding.  SB 13-213 required voter approval of Amendment 66 in order to take effect. 

A multi-million dollar campaign in favor of Amendment 66, funded largely by out-of-state donors like New York mayor Michael Bloomberg, Bill & Melinda Gates, and the National Education Association, seemingly had little effect on voter opinions.  Even in Democratic strongholds of Boulder and Denver counties, the measure failed or was barely even.

Colorado Treasurer Walker Stapleton had expressed concern that the money would be used pay for rising pension and health care costs for teachers — instead of improving education.

Recent news that the state government was flush with cash this year — with a $1.1 billion pool of unspent dollars for the 2013-2014 fiscal year — probably didn't help the Amendment 66 effort.

Even though Amendment 66 did not pass, Governor Hickenlooper has placed a $259.6 million increase for the Colorado Department of Education into next year's budget. The final budget has to be approved the Legislature.

Meanwhile, early results show voter approval for new taxes on the sale of recreational marijuana.  Proposition AA appears to have passed by 65 percent to 35 percent — again, almost 2-to-1.

A year after Colorado voters approved the legal recreational use of marijuana by adults, state voters approved a 15 percent excise tax and 10 percent sales tax on recreational marijuana sales.

High taxes?

Proposition AA will create a  new 15 percent excise tax on wholesale marijuana sales — part of which will fund public school construction.  Additionally, a special 10 percent sales tax on retail sales will fund a new marijuana regulation bureaucracy. The combined taxes are expected to generate roughly $70 million in additional revenue for the state in 2014.

There was strong support for the tax measures from Colorado politicians from both parties — including Republican Attorney General John Suthers and Democratic Governor John Hickenlooper.

“Despite my strongly-held personal belief that the ‘legalization’ of marijuana on a state level is very bad public policy, the state must do the best job possible of implementing Amendment 64 and regulating the new recreational marijuana industry," Suthers said in August.

Hickenlooper, once a high-profile opponent of marijuana legalization, urged voters to approve the marijuana taxes. "We need to make sure we have the resources to have a good regulatory framework to manage this," Hickenlooper said to The Denver Post.

Opponents of the high taxes argued that excessive taxation will drive marijuana sales back onto the non-taxed black market, where they've thrived for the past 80 years in America.

Colorado's first recreational marijuana shops will open their doors on January 1, 2014.  More than 100 dispensaries are expected to make history on that day.

 
   

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