Colorado voters on Tuesday overwhelmingly passed Proposition II, allowing the state to keep tens of millions of dollars collected through increased tobacco and nicotine taxes that it would have otherwise had to refund. That money will be used to bolster the state’s new expanded preschool program.
Proponents of Proposition II claimed victory within an hour after the polls closed, and the Associated Press called the race as well. By 9:19 p.m., the measure was leading 66% to 34%.
“This year, we saw historic demand from Colorado families for free universal preschool. Coloradans value early childhood education and I am thrilled people voted in favor of providing more funding for our free universal preschool program that is saving families money, and this voter-approved measure will help fund more preschool for kids,” Gov. Jared Polis said in a written staetment Tuesday night. “Thank you to all voters who made their voices heard, and thank you for continuing Colorado’s clear history of supporting early education.”
The Taxpayer’s Bill of Rights, a constitutional amendment voters approved in 1992, requires that money collected in excess of a tax’s projected revenue be refunded unless voters let the government keep the money.
Voters approved the increased state tobacco and nicotine taxes in 2020 through the passage of Proposition EE, which directed revenue collected under the change to fund what the state calls universal preschool in Colorado.
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When Democrats drafted EE in the legislature, nonpartisan legislative staff predicted the increased taxes would generate $186.5 million in new revenue a year. But the revenue has been much higher than that — at around $208 million — which is why Proposition II was placed on the November 2023 ballot.
The passage of Proposition II means the state can keep about $24 million in tobacco and nicotine taxes collected in the 2022-23 fiscal year, which ended June 30, in excess of the projections for Proposition EE. It also lets the state keep any future revenue collected in excess of the EE revenue projections.
It’s likely that Proposition EE revenues will increase in the future. The taxes on a pack of cigarettes under Proposition EE are currently $1.94 and are set to go up to $2.64 on July 1, 2027. The tax on other tobacco and nicotine products is 50% and set to rise to 62% starting in July 2027.
If the measure had failed, the tax revenue collected above the Proposition EE projections would have been returned to nicotine and tobacco wholesalers and distributors. Additionally, the nicotine and tobacco tax rates would have been cut to prevent future excess revenue.
Proposition II was placed on the ballot this year by the Democratic majority in the legislature through the passage of House Bill 1290. All 31 Republicans in the General Assembly, as well as three Democrats, voted against the legislation.
Colorado’s expanded preschool program began offering at least 10 hours a week of instruction this academic year to kids in the year before they start kindergarten, as well as classes for 3- and 4-year-olds with disabilities. Families don’t have to pay any out-of-pocket costs.
The program has seen high enrollment, though the expansion got off a rocky start, with some school districts suing the state over funding issues. The initiative has faced scrutiny from state lawmakers, too, over how Gov. Jared Polis’ administration has rolled out the expanded preschool access.
Preschool for All Coloradans, the issue committee that supported Proposition II, reported raising $349,000. The top donors to the group were Healthier Colorado at $90,000, Save the Children Action Network at $86,000 and Gary Advocacy at $50,000. Healthier Colorado and Save the Children Action Network are nonprofits, while Gary Advocacy is a philanthropic limited liability company affiliated with nonprofit Gary Community Ventures.
There was no organized opposition to the measure.