Voters approved Proposition NN and Amendment 87, increasing Colorado’s spending ceiling and scrapping the flat income tax, respectively.
Although midterm tallies remain incomplete in a few states, the broad message is unmistakable: voters nationwide favored Democrats by wide margins, signaling a rebuke of the current group of Republican lawmakers.
Yet for those who champion lower taxes and restrained spending, there is some disappointing news from at least one state’s results.
Colorado first adopted a flat income tax on both individuals and corporations in 1987. “A decade later, its per capita income ran about 5 percent higher than comparable states that kept graduated rates,” noted Adam N. Michel, director of tax policy studies at the Cato Institute, in September.
Today, the state’s income tax stands at 4.4 percent, a rate lower than most neighboring states.
In 1992, Coloradans approved a ballot measure that inserted the Taxpayer’s Bill of Rights (TABOR) into the state constitution. The measure would “require voter approval for certain state and local government tax revenue increases and debt” and would “limit the rate of increase in state and local government spending,” among other provisions.
“Its preferred interpretation shall reasonably restrain most of the growth of government,” reads the text as codified in the Colorado Constitution. To that end, it capped spending increases by state and local governments at the rate of inflation plus the percent of population growth. If spending exceeded those limits, “the excess shall be refunded in the next fiscal year.”
Taken together, these provisions helped make Colorado an attractive place to live and work, in addition to its natural beauty. For the 2024 fiscal year, TABOR refunded $1.7 billion to state taxpayers.
But this year, two statewide ballot measures sought to alter that framework.
Amendment 87 would replace the flat tax with a six-bracket progressive income tax, ranging from 3.7 percent for the lowest incomes to 8.4 percent for earnings above $1 million.
Supporters projected it would bring in roughly $2 billion more for the 2027–28 fiscal year, noting that the tax increases would apply only to those earning more than $500,000 annually—about 100,000 filers according to the state’s estimates. The Protect Colorado’s Future Coalition, a group of progressive think tanks backing the amendment, claimed that 97 percent of state taxpayers would see lower rates.
However, The Wall Street Journal argued that this claim is misleading; the brackets would not be adjusted for inflation, meaning middle-class residents would face a growing tax burden as incomes rise over time. Small businesses that pay taxes at individual rates on pass-through income would be affected as well, and a strong year or a sale could trigger a sizable tax bill.
Under TABOR, the state cannot extract an extra $2 billion from taxpayers without awarding it back. Consequently, a separate measure, Proposition NN, would permanently raise the TABOR cap by billions.
Legislative Council Staff, a nonpartisan research arm of the Colorado General Assembly, projected that “the state is expected to collect $20.99 billion in TABOR-revenue in FY 2026-27 and $22.08 billion in FY 2027-28.” These amounts would exceed the TABOR cap by $483 million and $674.1 million, respectively, and under current rules must be refunded to taxpayers.
Proposition NN would lift the TABOR cap by $4.6 billion in its first year alone. TABOR refunds would be suspended in the near term, and the funds would be redirected toward other priorities: $200 million would be used to compensate local jurisdictions for property tax abatements, and of the remainder, half would be directed to K–12 education (the measure guarantees at least a 2 percent annual increase) with the other half allocated to children’s programs chosen by lawmakers.
After ten years, however, that latter portion could be spent entirely at lawmakers’ discretion, without any requirement to tie it to education.
Predictably, the Colorado Education Association—the state’s largest teachers union—backed the measure. Proposition NN, they argued, “does not raise taxes” and “does not change anyone’s tax bracket.”
Not unexpectedly, Amendment 87 would accomplish both of those outcomes, and the union supported that measure as well. Moreover, it is not as if eliminating everyone’s annual refunds is fundamentally different from raising their rates.
“The state’s official analysis indicates Amendment 87 would have no impact on current TABOR refunds or the mechanisms used to calculate them,” according to the Colorado Fiscal Institute, which advocates reforming or repealing TABOR.
But the state also noted that any additional revenue gathered under Amendment 87 must “be spent on K-12 education, health care, and early childhood care and education, and [it] exempts this money from” TABOR.
Together, the two ballot measures would raise state spending and shrink Coloradans’ after-tax income. While millions of state taxpayers would not see a rate increase under Amendment 87, NN would remove the constitutionally guaranteed refunds that residents have enjoyed for thirty years.
“Fundamentally, Colorado faces a spending problem, not a revenue problem,” argued Andrew Wilford of the National Taxpayers Union Foundation, noting that even after adjusting for inflation, per-capita spending in Colorado has risen about 31 percent over the past two decades, which tends to create shortfalls. Attempting to fix those gaps by increasing revenue is akin to draining the ocean to repair a leaky boat.
“There is absolutely no need for the extra tax dollars that Amendments 87 and NN would pour into state coffers,” contended The Denver Gazette. “The windfall won’t be used for essential services like Colorado’s deteriorating highways or public safety—which already faces a relatively high crime rate nationwide—and NN’s pledge to channel more funding to public schools sidesteps the unanswered question: what happened to the 41 percent rise in K–12 spending the legislature approved over the past five years?”
This week, Proposition NN won by more than 11 percentage points. With more than 95 percent of votes tallied at the time of writing, Amendment 87 remained ahead, 51–49.
Proposition 136, a countermeasure that would uphold the state’s income tax cap at its current level, trailed by a wider margin, 53–47.
