Proposition 103
Recently I learned of a grassroots movement, Great Futures Coalition, to pass legislature to address the impact of the Governor’s proposed 2011/2012 budget cuts on education in the state of Colorado. The budget cuts will result in further injury to the severely wounded K-12 and further limit access to the higher education system. Proposition 103 is not a permanent repair to the deep wound, but rather a temporary Band-Aid intended to stem the flow of blood over the next 5 years while a cure is sought. The Great Futures Coalition is made up of concerned educators, parents, and community members whose focus is on attempting to take action to give education a temporary reprieve from the slicing and dicing that will take place if the Governor’s budget is passed. From what I can gather from their messages, the group is composed of folks across political party lines. Maybe I am being naïve, but the group does not seem to be, on the surface at least, to be pushing political agendas beyond an attempt to prevent imminent damage as a result of the upcoming funding cuts.
My short and dirty interpretation of Proposition 103 basically boils down to the restoration of state income, corporate, and sales tax to the levels of 1999. This would mean an increase in corporate income and personal tax from 4.63% to 5% and sales tax from 2.9% to 3% to take effect January 2012 for a fixed period of 5 years. This would result in potentially raising $532 million per year to put towards the prevention of additional funding cuts to preschool through higher education and ideally begin to repair some of the damage inflicted over the last 3 years of education funding cuts.
Unfortunately, the folks who drafted Proposition 103 failed to solicit my input because in essence, I would likely support it. But, alas, I am far too fond of my meager income and am not keen on parting with more of it. If the innovative folks of the Great Future Coalition had consulted me, I would have recommended eliminating the income tax hike and instead increase the sales tax. Then the amount contributed would be based on the dollars spent by citizens…the more one spends, the more one pays. This would make me feel as if I had a choice in the matter and would be more in alignment with ability to pay.
I am also concerned about the accountability measures including how and where the money is ultimately spent. Given the measly amount of dollars that actually ended up in the community college system as a result of the passing of Amendment 50, I fear the money will not be spent as intended.
Sales tax increases without some type of rebate for lower-income consumers are a slippery slope because of their regressive nature. In other words, people with lower income spend a greater percentage of that income on taxes than those who have a higher income.
ReplyDeleteWhile it is a reasonable assumption that high income people will spend more overall, and will therefore pay more in sales tax, it is important to remember that sales taxes on basic needs can create a financial hardship. I do not have a strong grasp of economics, but based on a paper by University of Tennessee, Knoxville professor of Economics William F. Fox (http://cber.bus.utk.edu/staff/mnmecon338/foxipt.pdf), it seems that the various exclusions and exemptions of state sales tax on services and specific commodities makes it difficult to say, definitively, if the tax has the desired effect.
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ReplyDeleteI think proposition 103 is a step in the right direction although and it is unfortunate that it did not receive sufficient signatures for the ballot. According to UC Denver Mark Fermanich, PhD, Research Associate
ReplyDeleteBuechner Institute for Governance Colorado ranks 49th out of 50 states in state taxes paid as a percentage of income, and 44th in state and local taxes combined. This is a fact that we cannot continue to ignore and if it takes a grass roots effort to bring light to the lack of state funding and raising tuition, as well as the debt students are incurring. If state funding declines any further higher education may become privatized and access and education for low income students will be exacerbated.
http://www.ucdenver.edu/academics/colleges/SPA/Documents/Fermanichreport2-16-11.pdf
Sales tax is indeed regressive unless some sort of 'luxury' tax is also instituted. However, one of the issues we face in Colorado is that the state is essentially forbidden from raising taxes or tax rates due to TABOR. This means we really do not have anyway to increase funding for any government provided services. It is an unfortunate state of affairs for those of us who believe that state governments actually provide several types of services that may generate an increased down the road, especially when funds are invested in education. The twist for Colorado is that even though we have a somewhat low college-going rate among our high school students, we are one of the most highly educated states (can you figure out why?). However, I think Janet's feelings about taxes and wanting more control over certain financial decisions, especially in these economic times, rings true to many of us.
ReplyDeleteJanet, you hit the nail on head by saying this is a band-aid approach. I feel like I have used that phrase so much in relation to my job and higher education in general. Ultimatly, I feel like that is all "we" know how to do these days...place a band aid to stop the bleed (the bleed can be any number of things, of course). At some point, our industry is going to be some bandaged that no one will be able to see anything underneath. I am reminded of another post that challenged the government to take and stand and scrap the whole system. It seems like that is the only way to get past the dysfunction that has been created by constantly trying the quick fix/band aid approach. It seems like just when you find a temporary solution to one problem, another would get worse. It is depressing!
ReplyDeleteJanet is right on track in her statement that this is a temporary fix to a long term problem. I also agree that this proposition lacks a means of accountability and could very well lead to more cuts to education in the future if the nation’s economy fails to grow in a positive direction. However, I am willing to vote to enact Proposition 103 to help bring the state’s education related budget back to a level of sanity. Until last year, I lived in a state where the sales tax was 6%, and I grew up in a state with sales tax close to 5%, so increasing the Colorado sales tax to 3% still seems like less than it should be. Also, while I empathize with Janet’s concern over her wages being taken away, I would hope we all understand part of the money generated will return to where she is employed. Therefore, I would vote for Prop 103 to ensure those of us in the HESAL program have jobs.
ReplyDeleteThank you for your post Janet. I'm on the other side of the coin, though. I believe that our taxes are too small to be able to effectively fund governmental functions, including higher education, prisons, K-12, public works, etc. How many times have we heard the term "budget crisis" in our lives? Recently, it's a daily topic.
ReplyDeleteWith our growing population, I don't believe that cutting programs and funding is the solution. As a nation, we must all sacrifice some for the good of all, so that we function well as a society. Yes, a small tax hike may hurt for a little bit, but how much more will it hurt if we lose our jobs because higher education institutions shut down due to lack of funding?