OFFICIAL BALLOT QUESTION

“Shall there be a change to the Colorado Revised Statutes capping the state income tax rate at 4.4% of federal taxable income for individuals and corporations?”

Source  Colorado Secretary of State certified ballot title for Initiative 232

NEUTRAL OVERVIEW

Proposition 136 is a statutory measure that would set 4.4 percent as the maximum Colorado income-tax rate for individuals and corporations beginning with tax year 2027. The permanent rate is already 4.4 percent. The measure therefore does not cut anyone’s current tax bill and does not immediately change state or local revenue or spending. A YES vote adds the ceiling to statute. A NO vote keeps the current 4.4 percent rate without the new ceiling.

The measure does not lock the rate at exactly 4.4 percent. The legislature or voters could still lower it. TABOR already requires voter approval before the state may raise a tax rate. Proposition 136 would add a second legal step: any future rate above 4.4 percent would also have to overcome this statutory limit. Because it is a statute rather than a constitutional amendment, it can be changed through the lawful processes that apply to voter-approved statutes.

Source  2026 Colorado Blue Book analysis of Proposition 136 and final text of Initiative 232

THE COMPETING 2026 TAX MEASURE

Amendment 87 would replace the flat 4.4 percent rate with graduated rates. It would lower marginal rates on taxable income below $100,000, keep 4.4 percent from $100,000 through $500,000, and raise marginal rates above $500,000, reaching 8.4 percent above $1 million. Proposition 136 would permit the lower rates but conflict with every rate above 4.4 percent.

The official analysis says the exact result would be unclear if voters approve both measures. Colorado law generally looks to the measure receiving more affirmative votes when voter-approved provisions conflict, but the legislature or a court may have to resolve the interaction. Voters should therefore evaluate Proposition 136 both as a general ceiling and as a direct counterweight to Amendment 87.

THE PROPONENT CASE

Supporters argue that the measure respects the direction voters set when they approved permanent income-tax reductions in 2020 and 2022. A known maximum helps families and businesses make long-term decisions about work, hiring, investment, and location. It also tells state officials to build budgets around the tax base and the economic cycle instead of treating a higher rate as the routine answer to new spending demands.

Supporters also say that a uniform ceiling keeps the system simple. The rate can fall when voters or lawmakers choose, while any attempt to go above 4.4 percent must confront both TABOR and the ceiling voters adopted. In their view, that added barrier is the promise of the measure.

THE OPPONENT CASE

Opponents argue that the proposal is redundant because TABOR already requires voter approval of a tax-rate increase. A future electorate that approves a higher rate could also displace the statutory ceiling, so the measure may create litigation and confusion without permanently preventing an increase. Its most immediate practical purpose is to conflict with Amendment 87.

Opponents also argue that a ceiling protects high-income taxpayers and corporations from graduated rates intended to finance education, health care, and child care. They warn that future recessions, emergencies, population changes, or service demands may require more revenue. If income-tax rates cannot rise, pressure may shift to fees, sales or property taxes, service cuts, or accounting devices.

OFFICIAL MEASURE INFORMATION

Current committee listings and contact information: coloradosos.gov/pubs/elections/Initiatives/ballot/contacts/2026.html.

THE COLORADO CONSERVATIVE RECOMMENDS YES

WHY WE RECOMMEND YES

We recommend YES because Colorado should make fiscal plans under a tax rate its voters have repeatedly chosen, not under the assumption that the rate can be raised whenever spending ambitions outrun revenue. Proposition 136 does not reduce the current rate. It takes the 4.4 percent rate already in law and says that this is the upper boundary unless Coloradans deliberately change course.

The contrast on the 2026 ballot is striking. Amendment 87 asks voters to lower rates for many filers while raising marginal rates—sharply in the top brackets—for others. Proposition 136 moves in the opposite direction: it permits future reductions for anyone but denies government the ability to impose a rate above 4.4 percent on any individual or corporation while the ceiling remains in force. One measure treats higher rates on a smaller group as a source of expanded spending. The other tells government to plan within a known maximum. We favor the second approach.

Colorado voters have already spoken more than once. Proposition 116 lowered the permanent rate from 4.63 percent to 4.55 percent in 2020. Proposition 121 lowered it again to 4.40 percent in 2022. Those were statewide choices in favor of a lower, uniform rate. Proposition 136 respects that record by turning the present rate into a clear ceiling rather than a temporary political resting point.

Sources  Proposition 116 (2020); Proposition 121 (2022); Colorado Department of Revenue annual reports for FY 2019 and FY 2025

The revenue record matters, but it must be described honestly. CDOR reports combined individual and corporate net income-tax collections of about $8.76 billion in FY 2019 and $11.28 billion in FY 2025—roughly 29 percent higher in nominal dollars after the permanent rate had fallen. That does not prove that lower rates caused the growth. Population, wages, profits, inflation, capital gains, credits, refunds, payment timing, and the economic cycle all affect collections. It proves a narrower point: lowering the percentage did not freeze the number of dollars collected. A growing tax base can produce growing revenue under a lower fixed rate.

A fixed ceiling stabilizes tax policy, not the economy. Revenue will still rise in expansions and fall in recessions because taxable income changes. That is why the state should use conservative forecasts, maintain reserves, distinguish recurring from temporary revenue, and avoid building permanent obligations on unusually strong years. Proposition 136 gives budget writers a durable rate assumption. It does not relieve them of the duty to manage volatility.

That predictability has real value. Households can better estimate the state share of future earnings. Owners of pass-through businesses can plan hiring and investment without expecting a new top marginal rate. Corporations comparing long-term projects can treat 4.4 percent as the ceiling. The benefit is not that every taxpayer’s income stays the same; it is that the state’s claim on each taxable dollar has a known upper boundary.

Predictability also improves public budgeting. Agencies and lawmakers should begin with the revenue that the adopted rate and forecasted tax base can reasonably produce. They should rank duties, measure results, end ineffective programs, and make tradeoffs in public. A rate ceiling does not write the budget, but it removes one escape hatch. It makes the debate about priorities harder and more honest.

We recognize the strongest objection: TABOR already requires voter approval before an income-tax rate increase. Proposition 136 is not an absolute shield, and it has no immediate fiscal effect. A future voter-approved law may supersede it. Critics are right that the measure adds legal friction, especially if Amendment 87 also passes. We nevertheless consider the added statement worthwhile. It tells courts, lawmakers, campaigns, and future voters what the present electorate intends the normal maximum to be.

We also recognize that inflexible policy can produce cost shifting. Officials may respond to a ceiling by increasing fees, seeking other taxes, underfunding core obligations, or moving spending outside ordinary limits. That would violate the measure’s spirit. A YES vote should not become permission to hide the burden elsewhere. We will judge implementation by the total burden, essential-service quality, reserve strength, and transparency of every workaround.

The corporate ceiling deserves the same scrutiny as the individual ceiling. Corporate income taxes ultimately affect some combination of owners, workers, customers, and investment, but the distribution is not identical in every industry. The editorial case is not that every corporate tax reduction pays for itself. It is that Colorado benefits when the rule is simple, known, and uniform, and when government must justify spending within a rate voters approved.

Because Proposition 136 is statutory, it is not irreversible. If a genuine emergency or future public judgment requires a different rate, Coloradans can revisit the policy through the democratic process. That reversibility is a strength. The ceiling establishes restraint as the default without pretending that one election can bind every future generation regardless of circumstances.

The state cannot promise every service, fund every expansion, and then treat a higher rate as inevitable. It must first manage what it already collects. Colorado has demonstrated that nominal income-tax collections can grow while the rate falls. A 4.4 percent ceiling gives taxpayers certainty, gives budget writers a firm assumption, and reinforces the voters’ repeated direction toward a lower uniform rate. For those reasons, The Colorado Conservative recommends a YES vote.

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.

FISCAL RESPONSIBILITY   41 OF 50   ★★★★☆

The ceiling strengthens rate discipline and planning, but it cannot stabilize the economic tax base or prevent cost shifting.

LIMITED GOVERNMENT   45 OF 50   ★★★★★

The measure places a clear boundary on a broad taxing power while leaving lawful paths to lower or reconsider the rate.

INDIVIDUAL LIBERTY   43 OF 50   ★★★★☆

A known ceiling protects earned income and planning freedom, though it also limits a future majority’s options while the statute stands.

INSTITUTIONAL INTEGRITY   37 OF 50   ★★★★☆

The text is short and transparent, but its overlap with TABOR and conflict with Amendment 87 create legal uncertainty.

LONG-TERM COLORADO IMPACT   40 OF 50   ★★★★☆

A stable ceiling can support competitiveness and disciplined planning, but volatility and alternative revenue pressure remain.

OVERALL RESULT

The result supports a strong YES recommendation. Proposition 136 scores highest for limiting government and protecting a predictable share of income. It stops short of five stars overall because the current rate already complies, revenue remains volatile, officials may shift burdens, and simultaneous passage with Amendment 87 could require litigation or legislative resolution.

WHAT WE WILL HOLD GOVERNMENT ACCOUNTABLE FOR

Whatever the election result, the publication will test the promise of taxpayer predictability against the state’s actual tax burden, revenue performance, budget choices, public-service results, and treatment of the competing graduated-income-tax measure.

HOW WE WILL DO IT

1. Establish the baseline. Record the permanent rates, taxable income, net collections, refunds, credits, TABOR refunds, General Fund revenue, reserves, fees, and major service levels before tax year 2027.

2. Verify the ceiling annually. Check statutes, tax forms, Department of Revenue guidance, withholding tables, and corporate instructions to confirm that no covered rate exceeds 4.4 percent.

3. Track collections in context. Report individual and corporate net collections separately and together. Compare them with personal income, profits, population, inflation, capital gains, credits, refunds, and forecast error.

4. Audit budget discipline. Compare recurring spending with recurring revenue. Identify programs built on one-time money, reserve drawdowns, supplemental appropriations, and unusually strong revenue years.

5. Watch for burden shifting. Track fees, assessments, sales and use taxes, property-tax changes, special-district charges, and off-budget financing. Report the combined effect on households and small businesses.

6. Measure service consequences. Monitor education, transportation, public safety, health, courts, and other core services for material cuts, backlogs, staffing problems, or measurable improvements.

7. Examine reserves and recessions. Publish reserve levels, forecast revisions, emergency actions, and service reductions during downturns. Judge whether the state planned for predictable volatility.

8. Track the Amendment 87 conflict. If both measures pass, publish vote totals, official interpretations, court filings, injunctions, judgments, implementation dates, and clear filing guidance.

9. Test household and business claims. Review migration, business formation, investment, employment, and pass-through data. Do not credit or blame one tax rule for changes driven by broader conditions.

10. Require one-, three-, and five-year decisions. Recommend whether the statute is working, being evaded, shifting burdens, impairing core obligations, or requiring clarification. Any proposal to exceed it should identify the need, amount, duration, alternatives, and voter-approval path.

Primary accountability records: Department of Revenue annual reports and tax guidance; Legislative Council forecasts and fiscal notes; Office of the State Controller reports; Office of State Planning and Budgeting documents; Joint Budget Committee appropriations; TABOR reports; election results; Attorney General opinions; and court decisions.

APPENDIX INITIATIVE 232 TEXT

Source  Colorado Secretary of State final corrected text of Initiative 232

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

SECTION 1. In Colorado Revised Statutes, add 39-22-102.5 as follows:

39-22-102.5. Maximum Tax Rate.

STARTING JANUARY 1, 2027, NEITHER THE INDIVIDUAL INCOME TAX RATE NOR THE CORPORATE INCOME TAX RATE MAY EXCEED 4.4% OF A TAXPAYER’S FEDERAL TAXABLE INCOME.

SECTION 2. Effective date.

This measure is effective upon proclamation of the Governor and applicable to the tax year beginning January 1, 2027 and all future tax years thereafter.