 REFERENDA C AND D
Frequently Asked Questions
Q: What will happen to TABOR rebates?
A. Over the next five years, all TABOR rebates will be retained by the state and only spent on seven projects; thereafter, TABOR rebates will return to Colorado taxpayers.
- There are 55 road and bridge projects across Colorado currently sitting on the backburner. If Referenda C & D pass, TABOR rebates complete these 55 projects. Without Referenda C & D, all 55 projects remain on the backburner.
- Colorado and local communities share in the pre-1978 pension plans for police officers and firefighters. Referenda C & D earmark a lump-sum payment of $175 million to conclude the state’s obligation to the pension plan.
- Colorado owes $145 million to poor school districts that have no means to repair their oldest and broken school buildings. Referenda C & D provides voter permission to repay this $145 million obligation in the form of matching grants to poor school districts.
- Referenda C & D provides tuition assistance to all in-state students attending community colleges and public colleges and universities.
- Referenda C & D resumes $50 million in repairs and improvements to public facilities at our state’s community and four-year colleges.
- Referenda C & D provides textbooks, libraries, tutors and in-classroom instruction to public schools and hot lunches to low-income students who cannot bring a lunch from home.
- Referenda C & D will deliver approximately $1 billion in health care to Colorado’s elderly, low-income and disabled populations, as well as programs to reduce the costs of health insurance to those employed by small businesses.
Q: Where are these TABOR rebates going right now?
A: Following the recession, Colorado was taking in less money than the TABOR spending limit allowed, meaning Colorado taxpayers have not seen a TABOR rebate since 2001. As the economy recovers, Colorado taxpayers will once again begin receiving a rebate. There are currently 16 methods to refund money. Almost all taxpayers receive the sales tax refund, amounting to $491 over the next five years. The remaining 15 methods of rebates come in the form of tax breaks for a variety of interests, from foster parents to business owners. Within three years, Coloradoans could see as little as 27 cents for every dollar originally intended for them. Tax breaks would siphon off the rest. If Referenda C & D passes, tax breaks will be suspended for five years.
Q: Do Referenda C & D change TABOR?
A: No. Referenda C & D are statutory, meaning they cannot alter the constitutional provisions of TABOR. Referenda C & D uses a routine provision in sub-paragraph (7) of TABOR to provide a five-year timeout from budget limits to allow critical funding specifically earmarked for education, roads and health care. This provision has been used over 700 times at the local, school district and county levels across Colorado, and would be the first time to be applied at the state level.
Q: How do we know the money will be spent responsibly?
A: First, spending is restricted in Referendum C to specific areas of education and health care. Referendum D mandates specific amounts for roads, fire and police pensions, and capital construction for K-12 schools and higher education. Last, the proposal requires an annual report detailing how much and where the money was spent.
Q: Do Referenda C & D increase taxes?
A. No. Referenda C & D do not change any existing income, sales or property tax at the state or local levels. The revenue raised from Referenda C & D is generated from the state’s economic recovery – workers displaced during the recession, now returning back to work and returning back to the state’s income and sales tax rolls. However, if this measure does not pass, fees for government services such as parks and licenses will have to be increased.
Q: Do Referenda C & D change my income-tax refund?
A. No. TABOR rebates come from the state collecting revenue above the spending limit. Federal and state tax refunds come from individuals over-paying their federal and/or state taxes. Your income tax refund has no bearing on the TABOR rebates effected by Referenda C & D.
Q: What happens after the five-year TABOR timeout?
A: Colorado’s normal budget process will return, with TABOR rebates once again available to taxpayers. The method of rebate changes to include a reduction in the state’s income tax from 4.63 to 4.5 percent. During the five year timeout, however, Colorado will move forward with better roads, health care, education and jobs.
Q: What happens if voters do not pass Referenda C & D?
A: Colorado will lose 55 road and bridge projects. The state will be unable to pay its portion of the pension plan for police and firefighters and their families. Colorado will not pay the $145 million to repair the oldest school buildings in our state’s poorest school districts. Down 21 percent overall, and 30% among community colleges, public funding of Colorado’s community colleges and state colleges will dry up within seven years. The $50 million in repairs to college buildings isn’t there. Colorado will forego a billion dollars in K-12 instruction and another billion in health care to elderly, low income and developmentally disabled Coloradoans. Scheduled to resume next year, the Senior Homestead Exemption, which reduces most senior’s property tax by half, will be gone. On top of all of this, an additional $420 million will be cut from Colorado’s budget next year out of the agriculture, prisons, disabled, judiciary and driver’s license offices.
Q: Why do Referenda C & D provide funding for fire and police pensions?
A: Colorado and local communities share in the pre-1978 pension plans for police officers and firefighters. The state still owes $240 million over time to those plans. However, the recession has forced the state to miss its payments the past two years, fostering uncertainty about the pension plans. Referenda C & D earmark a lump-sum payment of $175 million, thereby concluding the state’s obligation to these funds. Referenda C & D do not increase benefits.
Q: What about Amendment 23 and education funding?
A: Despite Amendment 23 – the voter approved constitutional provision that mandates a base level of spending on K-12 education – Colorado’s public schools remain under funded. Many support programs such as preschool and kindergarten, as well as supplemental education such as reading programs, libraries, classroom materials, the school lunch program and tutors fall outside of Amendment 23. Also, Amendment 23 does not fund school construction and building maintenance. These expenditures were drastically reduced during the recession.
Q: Why did higher education suffer so much during the recession?
A: When the governor and legislators were forced to cut Colorado’s budget, few options were available. Most of the state budget is mandatory expenditures with little discretionary spending. When revenues declined during the recession, the mandated spending remained, and discretionary spending – including higher education – was cut to balance the budget. According to the Joint Budget Committee, from 2001 to 1005, state spending on higher education – which includes public universities and colleges, as well as community colleges – fell by 21.3 percent. Now higher education only receives 10 percent of its funding from the state.
Q: How will passing Referenda C & D help community colleges?
A: Much like Colorado’s public colleges and universities, state funding for community colleges was significantly reduced over the past four years. Community colleges play a vital role across Colorado. At the community college level, students are learning trades and professions that support our growing communities. Nearly 65 percent of Colorado’s nurses and 90 percent of first-responders receive their degrees from community colleges. Training for these professions requires facilities and instruction that keeps pace with advances in medical care. Referenda C & D will provide tuition assistance for Colorado students, as well as assistance for construction and maintenance needs. Without Referenda C & D, consolidation will force some communities to lose their community college.
Q: Why does CDOT expect $1.2 billion for its transportation bonds?
A: Combined, Referenda C & D create $100 million a year to repay bonds for highway projects. Under current market conditions, $100 million in debt repayment will finance $1.2 billion of road and bridge projects. The Colorado transportation Commission has adopted a specific list of 55 road and bridge projects to be funded under Referenda C & D. That list is available at www.VoteYesonC-D.com.
Q: What if one passes and the other fails?
A: Referenda C & D are being presented to voters in a unified campaign with the expectation that they either both pass or both fail. Referendum D by law requires the passage of Referendum C. If C passes and D does not, C still takes effect, and the money that would have been utilized as part of Referendum C to pay the state’s bond obligations would instead be evenly split among health care, higher education and K-12 schools.
Q: Why was no money allocated for human services in Referendum D?
A: Referendum C asks voters to allow necessary funding for state services and programs to address health care and education needs. Referendum D speeds up transportation and school construction projects through the issuance of bonds.
Q: How do Referenda C & D benefit local governments?
A: Communities across Colorado will receive much-needed road and bridge projects. Health care will be improved for elderly, low-income and developmentally disabled Coloradoans. Where local economies depend on community colleges, this proposal keeps those communities economically viable. Children attending public schools will benefit from an additional $1 billion in classroom resources over the next five years. Without Referenda C & D, the state cannot afford these improvements and will be forced to push funding for these programs onto local taxpayers.
Q: How will Referenda C & D help rural communities?
A: Referenda C & D benefits all of Colorado, not just populated areas. This proposal will improve funding for construction and maintenance needs in many of the state’s poorest school districts. Programs that supported rural health clinics will once again have their funding restored. And several critical transportation projects that were delayed will get under way.
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