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# Amendment 87 - Graduated Income Tax
- URL: https://www.thecoloradoconservative.com/amendment-87-graduated-income-tax/
- Published: 2026-09-20T23:58:25.000Z
- Updated: 2026-09-20T23:58:25.000Z
- Author: Eric Phelan

# OFFICIAL BALLOT QUESTION

*“SHALL STATE TAXES BE INCREASED $2.7 BILLION ANNUALLY, IN ORDER TO INCREASE OR IMPROVE LEVELS OF PUBLIC SERVICES, INCLUDING K-12 PUBLIC SCHOOL EDUCATION, HEALTH CARE, AND EARLY CHILD CARE AND EDUCATION SERVICES, BY AN AMENDMENT TO THE COLORADO CONSTITUTION AND A CHANGE TO THE COLORADO REVISED STATUTES REPEALING EXISTING LAW AND CREATING NEW LAW TO REPLACE THE UNIFORM STATE INCOME TAX RATE WITH A GRADUATED INCOME TAX STRUCTURE, AND, IN CONNECTION THEREWITH, AMENDING THE TAXPAYER’S BILL OF RIGHTS TO ELIMINATE THE CONSTITUTIONAL REQUIREMENT FOR ALL TAXABLE NET INCOME TO BE TAXED AT ONE RATE WITH NO ADDED TAX ON INCOME; ESTABLISHING VARIOUS INCOME TAX RATES BASED ON THE AMOUNT OF TAXABLE INCOME EARNED BY INDIVIDUALS, ESTATES, TRUSTS, AND CORPORATIONS, WHILE MAINTAINING THE CURRENT 4.4% TAX ON INCOME FROM THE SALE OF A PRINCIPAL RESIDENCE, WHICH WILL RESULT IN THE ESTIMATED CHANGE IN INCOME TAXES OWED BY INDIVIDUALS AS IDENTIFIED IN THE FOLLOWING TABLE; AND AUTHORIZING THE STATE TO RETAIN AND SPEND ANY INCREASED REVENUE FROM THE NEW TAX STRUCTURE, AS A VOTER-APPROVED REVENUE CHANGE, TO SUPPLEMENT CURRENT LEVELS OF FUNDING FOR K-12 PUBLIC SCHOOL EDUCATION, HEALTH CARE, AND EARLY CHILD CARE AND EDUCATION PROGRAMS?”*

**Source Colorado Secretary of State certified 2026 ballot list**

# OFFICIAL BALLOT TAX ESTIMATES

| **Adjusted gross income** | **Current avg** | **Proposed avg** | **Change** |
| ------------------------- | --------------- | ---------------- | ---------- |
| $25,000 or less           | $59             | $50              | −$9        |
| $25,001–$50,000           | $751            | $632             | −$119      |
| $50,001–$100,000          | $1,877          | $1,666           | −$210      |
| $100,001–$200,000         | $4,126          | $3,828           | −$298      |
| $200,001–$500,000         | $9,344          | $9,019           | −$325      |
| $500,001–$1 million       | $19,288         | $18,963          | −$325      |
| $1,000,001–$2 million     | $29,432         | $34,196          | +$4,764    |
| $2,000,001–$5 million     | $41,196         | $55,110          | +$13,914   |

*The ballot table groups taxpayers by adjusted gross income. The brackets below apply to taxable income. Those are different measurements, so a filer’s result depends on deductions, filing circumstances, and how much taxable income falls inside each bracket.*

# NEUTRAL OVERVIEW

Amendment 87 would replace Colorado’s 4.4 percent flat income tax with graduated marginal rates beginning in tax year 2027\. It would apply the same bracket schedule to individuals, estates, trusts, and C corporations. Income from the taxable portion of a principal-residence sale would remain subject to a 4.4 percent rate.

| **Taxable income band** | **Current** | **Proposed marginal rate** |
| ----------------------- | ----------- | -------------------------- |
| Up to $25,000           | 4.4%        | 3.7%                       |
| $25,001–$100,000        | 4.4%        | 4.2%                       |
| $100,001–$500,000       | 4.4%        | 4.4%                       |
| $500,001–$750,000       | 4.4%        | 7.4%                       |
| $750,001–$1 million     | 4.4%        | 7.9%                       |
| Above $1 million        | 4.4%        | 8.4%                       |

*A marginal rate applies only to taxable income inside that band. For example, the 7.4 percent rate would apply to taxable income above $500,000 and up to $750,000, not to the taxpayer’s first $500,000.*

The measure would place additional revenue in the Colorado Future’s Account for K-12 education, health care, and early childhood care and education. The money must supplement rather than replace current appropriations. Legislative Council projects about $1.98 billion in additional revenue in FY 2027–28\. The $2.7 billion printed in the ballot question is the estimated maximum increase under forecast error.

A YES vote adopts the graduated rates and authorizes the state to keep and spend the added revenue. A NO vote preserves the flat-rate structure.

# THE PROPONENT CASE

Supporters argue that the proposal gives most lower- and middle-income taxpayers a modest reduction while asking households and corporations with the highest taxable incomes to pay more. They contend that income-tax rates should reflect differences in ability to pay instead of applying one percentage to every taxpayer.

They also argue that Colorado needs stable funding for schools, teacher pay, rural health care, Medicaid pressures, child care affordability, and the workers who provide those services. The initiative requires an annual public spending report and a State Auditor review, and future tax-rate increases would still require voter approval.

# THE OPPONENT CASE

Opponents argue that Colorado’s flat tax is simple, predictable, and valuable when the state competes for businesses, investment, entrepreneurs, and skilled workers. The proposal would raise the top marginal rate from 4.4 percent to 8.4 percent and would apply the same upper brackets to corporate net income.

They also warn that revenue from high incomes, capital gains, bonuses, and business profits changes sharply across economic cycles. Broad spending categories do not guarantee specific allocations or measurable results. Once multiple brackets are established, future ballot campaigns could seek repeated changes to rates or thresholds, even though voters would have to approve them.

# OFFICIAL MEASURE INFORMATION

| **Item**                   | **Official listing**                                                                                                                                                        |
| -------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Approval required          | 55 percent because the measure would amend the Colorado Constitution                                                                                                        |
| Designated representatives | Chris deGruy Kennedy and Kiyana Newell                                                                                                                                      |
| Registered in support      | Protect Colorado’s Future Coalition; Yes for Colorado Kids                                                                                                                  |
| Registered in opposition   | Americans for Prosperity Colorado; Your Family’s Future Alliance; Keep Colorado Affordable; A Brighter Colorado; Affordable Colorado; Let’s Go Colorado; Don’t Price Us Out |

*Committee listings can change. Current listing and full contact information: coloradosos.gov/pubs/elections/Initiatives/ballot/contacts/2026.html.*

**THE COLORADO CONSERVATIVE RECOMMENDS NO**

# WHY WE RECOMMEND NO

We recommend NO because Amendment 87 asks Colorado to reverse a tax policy its voters have reinforced for more than three decades. Voters adopted TABOR in 1992, including direct voter approval for tax increases and a requirement that taxable net income be taxed at one rate. In 2020, voters approved Proposition 116 and reduced the state income-tax rate from 4.63 to 4.55 percent. In 2022, they approved Proposition 121 and reduced it again to 4.4 percent. Those votes do not bind every future generation forever, but they establish a clear record: Colorado voters have repeatedly chosen a lower, uniform income-tax rate and direct control over tax increases.

Amendment 87 does not literally bypass the electorate. It is a citizen initiative, and voters will decide it. It does, however, ask voters to remove the uniform-rate protection and replace it with a system that gives future campaigns more levers to pull. Once six brackets exist, advocates can return with proposals to change one rate, move one threshold, add one surcharge, or redefine which taxpayers are expected to carry the next spending promise. Each future increase would still require a vote, but the simple constitutional boundary would be gone.

The proposal is also a permanent structural change paired with a large expansion of state revenue. It is not a tax increase on every Coloradan. The official table estimates modest average reductions for several income groups, and we will not pretend otherwise. Our objection is to financing those reductions and new spending with marginal rates that rise as high as 8.4 percent for individuals and corporations. A tax cut of a few hundred dollars for many filers is being paired with nearly $2 billion in projected annual new collections from a narrower and more volatile base.

The central Legislative Council forecast is about $1.98 billion in added revenue in FY 2027–28\. The $2.7 billion printed in the ballot question is the estimated maximum change under forecast error. Either figure is a major transfer of income to state government. The proposal dedicates that revenue to important subjects, but it does not set fixed shares among education, health care, and early childhood programs. It does not state how much must reach a classroom, a rural clinic, a patient, or a child-care provider. It does not require defined performance gains before the spending continues.

Government has legitimate duties, and carefully designed public services can improve opportunity. Government cannot tax residents out of poverty. Lasting prosperity comes from productive work, useful skills, affordable housing and energy, successful businesses, stable families, and an economy that creates better wages. Transferring more income through state programs may relieve a specific burden, but redistribution alone does not create the underlying growth that allows families to become self-supporting.

The danger is a repeating cycle. Government identifies an inequality, creates or expands a program, measures the remaining inequality, and treats that remaining gap as proof that still more revenue is needed. Because complete equality of income, need, health, educational results, and family circumstance can never be produced by a tax code, the spending claim has no natural stopping point. Every appropriation becomes the next budget’s baseline, every unmet goal becomes a reason for another increase, and temporary revenue growth becomes a permanent obligation.

That cycle is especially risky when the new revenue depends heavily on upper incomes, capital gains, bonuses, and corporate profits. Those sources can surge in a strong economy and fall sharply in a recession. Programs created during a revenue peak do not disappear when collections decline. The state then faces pressure to raise another tax, shift money from another priority, or reduce services after families and providers have become dependent on the spending.

The annual Legislative Council report and State Auditor review are meaningful safeguards. They can show where the money went and whether officials followed the law. They do not prove that the spending improved reading results, teacher retention, health-care access, rural hospital stability, child-care prices, or workforce capacity. An audit can confirm that a program spent money legally while the program still failed to produce a worthwhile result. Compliance is necessary; it is not the same as effectiveness.

HOW AMENDMENT 87 WILL PUSH BUSINESSES AWAY

The graduated system also gives up one of Colorado’s practical advantages: a state income tax that ordinary filers can understand. The federal return will remain the starting point, and tax software will perform much of the arithmetic. Even so, six marginal bands mean more calculations, more withholding and estimated-payment questions, more form and software changes, and more planning around income thresholds. That burden falls hardest on small businesses, independent contractors, farms, professional practices, and pass-through owners whose business income appears on an individual return. C corporations would face the graduated corporate schedule as well. A system that is simple today should not be made more expensive to calculate, explain, and administer without a compelling and limited need.

Let us be blunt: Amendment 87 will make Colorado less competitive, and it will push businesses, investment, and future jobs elsewhere. A state cannot raise its top marginal income-tax rate from 4.4 percent to 8.4 percent and pretend that owners, founders, investors, and employers will continue making the same decisions. Companies compare costs across state lines. This measure gives every mobile business another reason to choose a different state and gives existing Colorado companies another reason to place their next expansion somewhere else.

This cannot be dismissed as a tax that affects only wealthy households. Many small businesses are organized as partnerships, limited-liability companies taxed as partnerships, or S corporations. Their earnings pass through to their owners’ individual tax returns. Amendment 87 can therefore reach income produced by an operating Colorado business. The measure would also apply its graduated rates directly to C corporations. What is presented as a tax on high-income people will inevitably become a tax on many successful employers, entrepreneurs, farms, professional practices, contractors, and family-owned companies.

Business income is not necessarily money sitting in an owner’s personal bank account. Growing companies depend on their earnings to meet payroll, increase wages, purchase inventory, replace vehicles, finance equipment, lease additional space, survive slow seasons, and prepare for emergencies. When the state takes a materially larger share of those earnings, something else must give. The next employee may not be hired. A planned raise may be reduced. Equipment may remain outdated. A new storefront may remain vacant. A Colorado contractor or supplier may lose work because an expansion was delayed or moved.

That is how a business exodus actually develops. It is not limited to corporations loading their headquarters into moving trucks. It is the startup that is formed somewhere else, the second office opened across the state line, the warehouse constructed in another region, the acquisition directed toward an out-of-state operation, or the owner who changes residency before selling or expanding a company. Colorado loses the investment before it ever appears in the statistics. It loses the jobs that were never posted, the commercial space that was never leased, the suppliers who were never hired, and the taxable economic activity that was never created.

Those decisions eventually spread beyond the business itself. Fewer growing employers mean fewer opportunities for workers, less demand for local vendors, weaker commercial-property markets, and less revenue flowing naturally into state and local governments. The state may collect more from the businesses and residents who remain, but it also risks weakening the economic base expected to support those collections. That creates precisely the wrong cycle: higher rates discourage growth, slower growth produces weaker revenue, and government responds by searching for still more taxes and fees.

Not every neighborhood store, farm, contractor, or family company will close tomorrow. Many are deeply tied to their customers and communities. That does not make the policy harmless. The businesses most able to move are often the scalable firms, professional practices, entrepreneurs, and growing employers Colorado should be working hardest to retain. Even businesses that remain can move their future growth elsewhere.

Colorado should not test the loyalty of its employers by sharply increasing the price of success. Our tax policy should encourage small businesses to become large businesses, create jobs, build reserves, and establish permanent roots in Colorado. Amendment 87 moves the state in the opposite direction. It gives companies more reason and greater financial incentive to build their next chapter somewhere else.

The General Assembly did not place this citizen initiative on the ballot, but lawmakers would decide how most of the new account is allocated if it passes. The larger lesson therefore still applies to the legislature: live within the revenue voters have already authorized. TABOR is not an inconvenience to be worn down through repeated exceptions. It is a voter-imposed rule that requires government to prioritize, justify increases, and return excess revenue unless voters consent to something else.

Colorado should pursue spending discipline, measurable program reform, and broad economic growth before replacing the flat tax. If voters are later asked for new revenue, the request should identify a narrow purpose, a fixed amount or rate, measurable outcomes, and a sunset or renewal vote. Amendment 87 does none of those things. Colorado needs to vote NO. The Colorado Conservative recommends NO.

# HOW WE REACHED THE SCORES

Each category uses five tests worth 0 to 10 points. The fixed anchors are: 0 for clear harm or failure; 2 for a material weakness; 5 for mixed or neutral evidence; 8 for a clear benefit with workable safeguards; and 10 for an exceptional benefit with strong controls. Intermediate whole numbers are used only when the evidence falls between anchors.

Star conversion is fixed: 0–4 points earns no star; 5–14 earns one; 15–24 earns two; 25–34 earns three; 35–44 earns four; and 45–50 earns five. The same thresholds apply to every category.

| **Category**              | **Points** | **Stars** |
| ------------------------- | ---------- | --------- |
| Fiscal Responsibility     | 11/50      | ★☆☆☆☆     |
| Limited Government        | 14/50      | ★☆☆☆☆     |
| Individual Liberty        | 22/50      | ★★☆☆☆     |
| Institutional Integrity   | 24/50      | ★★☆☆☆     |
| Long-Term Colorado Impact | 14/50      | ★☆☆☆☆     |

**FISCAL RESPONSIBILITY 11 OF 50 ★☆☆☆☆**

*The measure raises substantial new revenue without fixed allocations or outcome requirements, and it relies heavily on volatile upper-income and business income.*

| **Test**              | **Pts** | **Evidence and reason**                                                                                                        |
| --------------------- | ------- | ------------------------------------------------------------------------------------------------------------------------------ |
| Net taxpayer burden   | 0       | The central forecast is about $1.98 billion in added FY 2027–28 revenue, with a $2.7 billion estimated maximum change.         |
| Revenue stability     | 2       | High-income, capital-gain, bonus, and corporate income can fall sharply during economic downturns.                             |
| Spending discipline   | 2       | Revenue is limited to three broad fields, but the measure sets no fixed percentages, expiration date, or spending cap.         |
| Outcome requirements  | 1       | The measure requires spending reports and audits but does not condition continued funding on measured results.                 |
| Implementation burden | 6       | Department of Revenue costs are modest relative to collections, but taxpayers and preparers must manage a more complex system. |
| Metric total          | 11      | ★☆☆☆☆                                                                                                                          |

**LIMITED GOVERNMENT 14 OF 50 ★☆☆☆☆**

*The proposal expands state revenue and spending authority while preserving voter approval for future rate increases.*

| **Test**                 | **Pts** | **Evidence and reason**                                                                                                        |
| ------------------------ | ------- | ------------------------------------------------------------------------------------------------------------------------------ |
| Size of government       | 0       | The measure authorizes nearly $2 billion in projected annual new revenue by FY 2027–28.                                        |
| Taxing-power expansion   | 1       | It removes the constitutional uniform-rate rule and creates six marginal income bands.                                         |
| Program scope            | 2       | The three spending fields contain many eligible programs and leave allocation choices to the General Assembly.                 |
| Future voter control     | 8       | Future tax-rate increases remain subject to voter approval under TABOR.                                                        |
| Administrative restraint | 3       | The measure uses existing institutions, but it adds continuing reporting, auditing, tax administration, and allocation duties. |
| Metric total             | 14      | ★☆☆☆☆                                                                                                                          |

**INDIVIDUAL LIBERTY 22 OF 50 ★★☆☆☆**

*Many taxpayers receive modest estimated relief, but the measure takes a much larger share of upper taxable income and reduces equal treatment under one rate.*

| **Test**                 | **Pts** | **Evidence and reason**                                                                                |
| ------------------------ | ------- | ------------------------------------------------------------------------------------------------------ |
| Lower-income tax relief  | 8       | Rates fall to 3.7 percent on the first $25,000 and 4.2 percent on the next $75,000 of taxable income.  |
| Control of earned income | 1       | Marginal rates rise to 7.4, 7.9, and 8.4 percent above $500,000 of taxable income.                     |
| Equal tax treatment      | 2       | Taxpayers with the same type of income would face different rates based on the amount earned.          |
| Economic choice          | 3       | Higher rates may influence investment, work, business structure, relocation, and the timing of income. |
| Direct voter consent     | 8       | Voters decide this change and retain a vote on later tax-rate increases.                               |
| Metric total             | 22      | ★★☆☆☆                                                                                                  |

**INSTITUTIONAL INTEGRITY 24 OF 50 ★★☆☆☆**

*The measure includes public reporting and an independent audit, but broad appropriations and limited outcome rules weaken accountability.*

| **Test**                   | **Pts** | **Evidence and reason**                                                                                               |
| -------------------------- | ------- | --------------------------------------------------------------------------------------------------------------------- |
| Ballot transparency        | 8       | The ballot states the maximum revenue change, describes the structural change, and prints estimated taxpayer effects. |
| Spending boundaries        | 5       | Funds are restricted to education, health care, and early childhood purposes, but each field is broad.                |
| Independent audit          | 8       | The State Auditor must annually audit the Legislative Council spending report.                                        |
| Performance accountability | 1       | No statutory targets define success or trigger correction when funded programs fail to improve.                       |
| Structural predictability  | 2       | Multiple brackets and thresholds create more points for future political campaigns and tax-policy changes.            |
| Metric total               | 24      | ★★☆☆☆                                                                                                                 |

**LONG-TERM COLORADO IMPACT 14 OF 50 ★☆☆☆☆**

*Public-service investment may help families and workers, but the lasting tax structure creates competitiveness and revenue-cycle risks.*

| **Test**                 | **Pts** | **Evidence and reason**                                                                                           |
| ------------------------ | ------- | ----------------------------------------------------------------------------------------------------------------- |
| Economic competitiveness | 1       | The top marginal rate would rise from 4.4 to 8.4 percent for individual and corporate taxable income.             |
| Revenue-cycle resilience | 2       | Collections become more dependent on taxpayers and income sources that fluctuate strongly across economic cycles. |
| Public-service potential | 7       | Added funding could improve schools, health care, and child care if appropriations produce measurable results.    |
| Tax-system stability     | 2       | The change replaces one uniform rate with six bands and creates more thresholds that future proposals may alter.  |
| Adaptability and exit    | 2       | The measure has no sunset or automatic review tied to economic, revenue, or program-performance results.          |
| Metric total             | 14      | ★☆☆☆☆                                                                                                             |

# OVERALL RESULT

| **Five-category total** | **Normalized score** | **Overall stars** | **Recommendation** |
| ----------------------- | -------------------- | ----------------- | ------------------ |
| 85/250                  | 17/50                | ★★☆☆☆             | NO                 |

**The result supports a NO recommendation** because the measure creates a large and permanent increase in state revenue, materially raises upper marginal rates, and does not bind the new spending to measurable results or a sunset review. Its strongest features are modest lower-bracket relief, direct voter approval, and annual public auditing.

# WHAT WE WILL HOLD GOVERNMENT ACCOUNTABLE FOR

Whatever the election result, the publication will compare the promises made to voters with the taxes collected, the programs funded, and the results achieved.

## HOW WE WILL DO IT

**1\. Compare forecast with collections.** Record actual added revenue by fiscal year against the $1.98 billion FY 2027–28 central forecast and the $2.7 billion maximum-change figure. Explain forecast revisions and economic conditions.

**2\. Measure taxpayer effects.** Publish effective and marginal tax changes by adjusted gross income, taxable income, filing status, individual versus corporate return, and major income source. Do not treat bracket rates as if they apply to every dollar.

**3\. Track economic behavior carefully.** Monitor business formations and closures, headquarters moves, high-income migration, investment, employment, capital-gain realizations, and income timing. Report competing explanations and avoid claiming causation from one trend alone.

**4\. Test revenue volatility.** Compare collections from the upper brackets with economic growth, stock-market changes, capital gains, bonuses, and corporate profits. Report how revenue performs during a downturn and whether spending commitments outlast collections.

**5\. Follow every dollar.** Report annual allocations to K-12 education, health care, and early childhood programs, including transfers to the Healthy School Meals for All Cash Fund. Identify the recipient program, legal authority, and amount.

**6\. Enforce supplement not supplant.** Compare each program’s base appropriation with prior years. Flag any reduction in existing support that is backfilled with Colorado Future’s Account money.

**7\. Measure service outcomes.** Track teacher pay and retention, class size, career-program access, rural hospital and clinic availability, Medicaid service levels, health-care affordability, child-care prices, provider wages, and available child-care slots.

**8\. Review audits and corrections.** Publish the annual Legislative Council report and State Auditor findings. Track questioned spending, incomplete data, recommendations, corrective actions, and whether the General Assembly resolves repeat findings.

**9\. Record compliance costs.** Track Department of Revenue programming and reporting costs, taxpayer and preparer burdens, amended returns, disputes, guidance, and litigation caused by the new brackets.

**10\. Revisit the structure.** At one, three, and five years, compare tax relief, added collections, service outcomes, economic indicators, and volatility with the claims made during the campaign. Report evidence that supports or contradicts our recommendation.

*Primary accountability records: Department of Revenue collections and taxpayer statistics; Colorado Future’s Account appropriations and transfers; Legislative Council reports; State Auditor findings; Joint Budget Committee documents; school, health, and child-care performance data; business and labor statistics; court dockets; and public rulemaking records. Core sources: leg.colorado.gov, osa.colorado.gov, tax.colorado.gov, and coloradosos.gov.*

# APPENDIX EXACT TEXT OF INITIATIVE 195

**Source Colorado Secretary of State final text of Initiative 195**

*Be it Enacted by the People of the State of Colorado:*

**SECTION 1\. Legislative Declaration**

The people of the state of Colorado find, determine, and declare that:

(a) Colorado taxpayers are entitled to a fair and equitable tax system that recognizes the affordability challenges facing working families, promotes a vibrant statewide economy, and adequately supports our public education, health care, and child care systems and other essential public services available to all Coloradans;

(b) Colorado’s current flat income tax system, unlike the graduated income tax system at the federal level and in 27 other states, taxes millionaires and corporations at the same rate as regular working people;

(c) Combining state income, sales, and property taxes, the wealthiest 1% of Coloradans– those making over $850,000 per year–pay only 7% of their income in state and local taxes every year, whereas the 60% of Coloradans making between $25,000 and $150,000 per year pay between 9-10%.

(d) The 97% of Colorado taxpayers making less than $500,000 would benefit from a tax cut to help them afford the high cost of living;

(e) The Taxpayer’s Bill of Rights, or the TABOR amendment, has significantly limited the ability of state and local governments to invest in supporting teachers and care workers, building infrastructure, and keeping up with a changing economy;

(f) TABOR can be amended to allow a graduated income tax without impacting TABOR refunds or the voters’ right to approve any future tax increases;

(g) As demonstrated by recent state-commissioned adequacy studies, Colorado’s public schools have been underfunded for decades, and despite the elimination of the Budget Stabilization Factor in 2024, teacher wage competitiveness is still 50th in the country.

(h) Health care in Colorado is too expensive, and the cuts in the federal budget bill are expected to exceed $2 billion per year by 2032, with rural hospitals and clinics facing the greatest risks for closing or limiting services; and

(i) Child care in Colorado is too expensive, making it harder for parents to work while raising their families, and yet wages are so low that 46 percent of early childhood workers in the state rely on social welfare programs like Medicaid and SNAP;

(2) The people of the state of Colorado find, therefore, that:

(a) A graduated income tax system will:

(I) Better support Colorado’s children and families, working people, and older adults by cutting taxes for individuals and small businesses making less than $500,000 per year while only increasing taxes on individuals and corporations making more than $500,000 per year;

(II) Increase Colorado’s ability to adequately invest in our public schools, health care, and child care systems and programs to improve the affordability of health care and child care;

(b) A graduated income tax system will not:

(I) Change the Constitutional requirement that the state government cannot raise any tax rates without another vote of the people;

(II) Reduce or otherwise impact TABOR refunds, because any revenue raised from Colorado’s current 4.4% flat income tax, 2.9% sales tax, and various other taxes and fees that exceeds the TABOR spending limit will be required to be refunded to taxpayers;

(c) All new revenue from graduated income tax that exceeds what would have otherwise been collected under Colorado’s current tax rates will be transferred into the Colorado’s Future Fund, with spending limited to the following purposes:

(I) Improving our public education system, increasing pay to attract and retain great teachers, reducing class sizes, supporting rural schools, and supporting affordable pathways to higher education and workforce training;

(II) Improving our health care system, making health care more affordable, replacing federal Medicaid funds that were cut by the federal budget bill, implementing new requirements in the federal budget bill, increasing access to mental and behavioral health care and primary care, supporting services for older adults and people with disabilities, increasing access to nutritious food, supporting our health care workforce, and supporting rural hospitals and clinics;

(III) Improving our early child care and education systems, helping families afford child care, and increasing pay to attract and retain great child care providers;

(d) New revenues are intended to supplement rather than supplant existing funding;

(e)Taxpayers will be able to monitor and assure responsible and effective usage of all new revenue based on the following requirements:

(I) The nonpartisan office of legislative council will produce an annual report on all spending of new revenue that will be accessible to the public in various formats including the general assembly’s website with plain language descriptions and understandable data visualizations;

(II) The nonpartisan and independent office of the state auditor will annually audit this report and present findings to the Joint Budget Committee and the public;

**SECTION 2 In the constitution of the state of Colorado, section 20 of article X, amend (8)(a) as follows:**

(8) Revenue limits. (a) New or increased transfer tax rates on real property are prohibited. No new state real property tax or local district income tax shall be imposed. Neither an income tax rate increase nor a new state definition of taxable income shall apply before the next tax year. Any income tax law change after July 1, 1992 shall also require all taxable net income to be taxed at one rate, excluding refund tax credits or voter-approved tax credits, with no added tax or surcharge.

**SECTION 3\. In Colorado Revised Statutes, 39-22-104, amend (1.7)(c) and (2); and add (1.8) as follows:**

39-22-104\. Income tax imposed on individuals, estates, and trusts - report - tax preference performance statement - legislative declaration - definitions - repeal. (1.7)(c) Except as otherwise provided in section 39-22-627, subject to subsection (2) of this section, with respect to taxable years commencing on or after January 1, 2022, BUT BEFORE JANUARY 1, 2027, a tax of four and forty one-hundredths percent is imposed on the federal taxable income, as determined pursuant to section 63 of the internal revenue code, of every individual, estate, and trust.

(1.8)(a) EXCEPT AS OTHERWISE PROVIDED IN SECTION 39-22-627, SUBJECT TO SUBSECTION (2) OF THIS SECTION, WITH RESPECT TO TAXABLE YEARS COMMENCING ON OR AFTER JANUARY 1, 2027,A GRADUATED TAX IS IMPOSED ON FEDERAL TAXABLE INCOME,AS DETERMINED BY SECTION 63 OF THE INTERNAL REVENUE CODE, OF EVERY INDIVIDUAL, ESTATE, AND TRUST, AS FOLLOWS:

(I) FOR FEDERAL TAXABLE INCOME LESS THAN OR EQUAL TO TWENTY FIVE THOUSAND DOLLARS, THE TAX IS THREE AND SEVENTY ONE-HUNDREDTHS PERCENT;

(II) FOR FEDERAL TAXABLE INCOME GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, THE TAX IS (A) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS AND (B) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS;

(III) FOR FEDERAL TAXABLE INCOME GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, THE TAX IS (A) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS,(B) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, AND (C) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS;

(IV) FOR FEDERAL TAXABLE INCOME GREATER THAN FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, THE TAX IS (A) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (B) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (C) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, AND (D) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN FIVE HUNDRED THOUSAND DOLLARS;

(V) FOR FEDERAL TAXABLE INCOME GREATER THAN SEVEN HUNDRED FIFTY THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE MILLION DOLLARS, THE TAX IS (A) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS,(B) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (C) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, (D) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT OVER FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, AND (E) SEVEN AND NINETY ONE-HUNDREDTHS PERCENT ON THE AMOUNT OVER SEVEN HUNDRED FIFTY THOUSAND DOLLARS; AND

(VI) FOR FEDERAL TAXABLE INCOME GREATER THAN ONE MILLION DOLLARS, THE TAX IS (A) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (B) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (C) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, (D) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, (E) SEVEN AND NINETY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN SEVEN HUNDRED FIFTY THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE MILLION DOLLARS; AND (F) EIGHT AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE MILLION DOLLARS.

(b) FOR PURPOSES OF SUBSECTION (1.8)(a) OF THIS SECTION, TAXABLE NET INCOME FROM THE SALE OR EXCHANGE OF A PRINCIPAL RESIDENCE EXCEEDING THE AMOUNT EXCLUDED FROM FEDERAL TAXABLE INCOME UNDER SECTION 121 OF THE INTERNAL REVENUE CODE SHALL BE SUBJECT TO TAX UNDER THIS SECTION AT THE RATE OF FOUR AND FORTY ONE-HUNDREDTHS PERCENT.

(2) Prior to the application of the rate of tax prescribed in subsection (1), (1.5), or (1.7), OR (1.8) of this section, the federal taxable income shall be modified as provided in subsections (3) and (4) of this section.

**SECTION 4\. In Colorado Revised Statutes, 39-22-301, amend (1)(d)(I)(K) and add (1)(d)(I)(L) as follows:**

39-22-301\. Corporate tax imposed – repeal. (1)(d)(I)(K). Except as otherwise provided in section 39-22-627, for income tax years commencing on or after January 1, 2022, BUT BEFORE JANUARY 1, 2027, four and forty one-hundredths percent of the Colorado net income.

(1)(d)(I)(L) EXCEPT AS OTHERWISE PROVIDED IN SECTION 39-22-627, FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2027, A GRADUATED TAX IS IMPOSED ON COLORADO NET INCOME, AS DETERMINED UNDER THIS SECTION, OF EVERY DOMESTIC C CORPORATION, FOREIGN C CORPORATION, AND COMBINED GROUP, AS DEFINED IN SECTION 39-22- 303(12)(a.3), DOING BUSINESS IN COLORADO ANNUALLY IN AN AMOUNT OF THE NET INCOME OF SUCH C CORPORATION DURING THE YEAR DERIVED FROM SOURCES WITHIN COLORADO AS SET FORTH IN THE FOLLOWING SCHEDULE OF RATES, AS FOLLOWS:

(i) FOR COLORADO NET INCOME LESS THAN OR EQUAL TO TWENTY FIVE THOUSAND DOLLARS, THE TAX IS THREE AND SEVENTY ONE-HUNDREDTHS PERCENT;

(ii) FOR COLORADO NET INCOME GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, THE TAX IS (I) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS AND (II) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS;

(iii) FOR COLORADO NET INCOME GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, THE TAX IS (I) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (II) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, AND (III) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS;

(iv) FOR COLORADO NET INCOME GREATER THAN FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, THE TAX IS (I) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (II) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (III) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, AND (IV) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN FIVE HUNDRED THOUSAND DOLLARS;

(v) FOR COLORADO NET INCOME GREATER THAN SEVEN HUNDRED FIFTY THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE MILLION DOLLARS, THE TAX IS (I) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (II) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (III) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, (IV) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT OVER FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, AND (V) SEVEN AND NINETY ONE-HUNDREDTHS PERCENT ON THE AMOUNT OVER SEVEN HUNDRED FIFTY THOUSAND DOLLARS; AND

(vi) FOR COLORADO NET INCOME GREATER THAN ONE MILLION DOLLARS, THE TAX IS (I) THREE AND SEVENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT UP TO AND INCLUDING TWENTY FIVE THOUSAND DOLLARS, (II) FOUR AND TWENTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN TWENTY FIVE THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS, (III) FOUR AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO FIVE HUNDRED THOUSAND DOLLARS, (IV) SEVEN AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO SEVEN HUNDRED FIFTY THOUSAND DOLLARS, (V) SEVEN AND NINETY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN SEVEN HUNDRED FIFTY THOUSAND DOLLARS BUT LESS THAN OR EQUAL TO ONE MILLION DOLLARS; AND (VI) EIGHT AND FORTY ONE-HUNDREDTHS PERCENT ON THE AMOUNT GREATER THAN ONE MILLION DOLLARS.

**SECTION 5\. In Colorado Revised Statutes, add 24-77-103.3 as follows:**

24-77-103.3\. Voter approved revenue change – retention and use of revenue – accountability. (1) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, FOR EACH STATE FISCAL YEAR COMMENCING ON OR AFTER JANUARY 1, 2026, ALL REVENUE COLLECTED UNDER THE INCOME TAX RATES ESTABLISHED BY SECTION 39-22-104(1.8) AND SECTION 39-22- 301(1)(d)(I)(L) IN EXCESS OF THE REVENUE THAT WOULD BE GENERATED IN ANY SUCH STATE FISCAL YEAR BY APPLYING THE INCOME TAX RATE THAT EXISTED AS OF DECEMBER 31, 2026 (“EXCESS REVENUE”), SHALL CONSTITUTE A VOTER APPROVED REVENUE CHANGE UNDER SECTION 20(7)(d) OF ARTICLE X OF THE COLORADO CONSTITUTION, AND MAY BE COLLECTED, KEPT, AND SPENT NOTWITHSTANDING ANY OTHER LIMITS IN SUBSECTION (20)(7)(d).

(2) FOR PURPOSES OF ADMINISTERING THE DEDICATION OF THE EXCESS REVENUE SPECIFIED IN SUBSECTION (1) OF THIS SECTION, THERE IS HEREBY CREATED IN THE GENERAL FUND THE COLORADO FUTURE’S ACCOUNT, WHICH SHALL CONSIST OF AN AMOUNT OF MONEYS EQUAL TO THE AMOUNT OF THE EXCESS REVENUE SPECIFIED IN SUBSECTION (1) OF THIS SECTION. THE MONEYS IN THE ACCOUNT SHALL BE APPROPRIATED OR TRANSFERRED BY THE GENERAL ASSEMBLY FOR THE FOLLOWING PROGRAMS AND PURPOSES AND MUST SUPPLEMENT AND NOT SUPPLANT CURRENT LEVELS OF APPROPRIATIONS THERETO:

(a) K-12 PUBLIC SCHOOL EDUCATION, INCLUDING:

(I) IMPROVING KINDERGARTEN THROUGH 12TH GRADE;

(II)INCREASING ACCESS TO CAREER AND TECHNICAL EDUCATION PROGRAMS;

(III)INCREASING TEACHER PAY;

(b) HEALTH CARE, INCLUDING:

(I) PROGRAMS TO HELP FAMILIES AFFORD HEALTH CARE;

(II)REPLACING MEDICAID FUNDING LOST DUE TO RECENT FEDERAL LEGISLATION, AND PAYING FOR IMPLEMENTATION OF NEW FEDERAL REQUIREMENTS;

(III)INCREASING FUNDING FOR PRIMARY CARE, BEHAVIORAL HEALTH AND RURAL HEALTH CARE;

(IV) SUPPORTING HEALTH CARE, LONG-TERM CARE,AND OTHER SUPPORTS FOR OLDER ADULTS AND PEOPLE WITH DISABILITIES;

(V)PROGRAMS THAT INCREASE ACCESS TO NUTRITIOUS FOOD;AND

(c) EARLY CHILD CARE AND EDUCATION, INCLUDING:

(I) PROGRAMS TO HELP FAMILIES AFFORD CHILD CARE;

(II)INCREASING PAY AND SUPPORT FOR THE CHILD CARE WORKFORCE;

(III) IMPROVING ACCESS TO HIGH-QUALITY EARLY CHILDHOOD EDUCATION PROGRAMS;

(3)(a) FOR EACH FISCAL YEAR COMMENCING ON OR AFTER JANUARY 1, 2026, THAT THE STATE RECEIVES EXCESS REVENUE AS DEFINED IN SUBSECTION (1) OF THIS SECTION, THE DIRECTOR OF RESEARCH OF THE NONPARTISAN STAFF OF THE LEGISLATIVE COUNCIL SHALL PREPARE A REPORT, TO BE TRANSMITTED TO THE GENERAL ASSEMBLY AND MADE PUBLICLY AVAILABLE AND EASILY ACCESSIBLE ON OR VIA A LINK FROM THE GENERAL ASSEMBLY’S WEBSITE, SPECIFYING THE USES TO WHICH SUCH REVENUE HAS BEEN APPROPRIATED OR TRANSFERRED AND TO ENSURE THAT SUCH REVENUE IS APPROPRIATED, TRANSFERRED, AND SPENT, AS DIRECTED BY THE PEOPLE OF COLORADO, IN ACCORDANCE WITH THIS SECTION. THE OFFICE OF THE STATE AUDITOR SHALL ANNUALLY AUDIT THE REPORT,WHICH MUST AT A MINIMUM CONTAIN THE FOLLOWING INFORMATION:

(I)THE AMOUNT OF SUCH EXCESS REVENUE;AND

(II)A SPECIFICATION AND DESCRIPTION OF THE AMOUNTS, PROGRAMS AND PURPOSES TO WHICH SUCH REVENUE HAS BEEN ALLOCATED AND APPROPRIATED OR TRANSFERRED.

(b) THE REPORT SHALL INCLUDE A PLAIN LANGUAGE SUMMARY AND, WHERE POSSIBLE, EASILY UNDERSTANDABLE VISUALIZATIONS OF THIS INFORMATION,AND SHALL BE MADE REASONABLY AVAILABLE IN OTHER FORMATS WHEN REQUESTED.