Colorado likely to approve Prop 116, cutting state income taxes by $150 million |

Colorado likely to approve Prop 116, cutting state income taxes by $150 million

By Brian Eason
The Colorado Sun

Colorado voters appeared poised to approve a small, across-the-board cut to the state’s income tax rate that would permanently reduce taxes for individuals and businesses alike.

With 2.5 million votes tallied, Proposition 116 was leading with 56% of the vote tallied early Tuesday night.

If the results hold, the measure would reduce the state income tax rate from 4.63% to 4.55%, providing Coloradans some minor financial relief amid the ongoing economic crisis. That represents a 1.7% cut, or a savings of about $37 annually for the average taxpayer. The savings for someone with $25,000 in taxable income would be about $20 while those with taxable income of $1 million would save $800.

But small tax cuts for everyone add up to big money for the state’s coffers. By a legislative estimate, it could reduce state revenue by more than $150 million a year at a time when state budget writers are already grappling with huge shortfalls due to the pandemic. 

The vote would be a win for its conservative supporters, as well as Democratic Gov. Jared Polis, who has consistently bucked progressives in his party to cheer on Republican efforts to reduce taxes. For the left, which has long sought additional revenue to boost funding to things like K-12 schools and higher education, the vote is yet another in a steady stream of ballot box defeats on tax questions in recent years, reinforcing Colorado’s fiscal conservative streak, even as it shifts further to the left in who it elects to office.

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