In 2022, Colorado voters approved a ballot measure reducing income tax deductions for people and couples earning $300,000 or more a year in federal adjusted gross income. The initiative, Proposition FF, raised money for a program that provides free breakfasts and lunches to all students in the state’s K-12 public schools.
But when nonpartisan analysts in the Colorado legislature tried to predict how much tax revenue the change would generate, they underestimated.
Under the Taxpayer’s Bill of Rights, the state cannot keep revenue in excess of nonpartisan legislative staff’s estimates without voter approval, which is why Proposition LL is on the ballot in November after being referred to voters this year by Democrats at the Colorado Capitol.
Here’s what you need to know about the measure.
What were the revenue estimates and how far off were they?
In 2022, when Proposition FF was on the ballot, nonpartisan legislative staffers estimated that the measure would generate $100.7 million in tax revenue in the 2023-24 state budget year, which ended June 30, 2024.
The actual amount collected was $112 million, or $11.3 million more than estimated.
For those interested in the details: Proposition FF limited the income tax deductions for people earning more than $300,000 in federal adjusted gross income to $12,000 for single filers and $16,000 for joint filers. Before the 2022 measure passed, people earning up to $400,000 had no deduction limit.
The change affected about 200,000 Colorado households.
For someone earning $375,000 in adjusted federal gross income, the change was estimated to increase their state income taxes by about $450.
If Proposition LL passes, the state will be allowed to keep the $11.3 million it collected in the 2023-24 budget year in excess of estimates, as well as all tax revenue collected under Proposition FF in future years, too.
Where does the revenue go now and where would the extra funding go?
Before Proposition FF passed, only students from families with incomes below a certain threshold qualified for free or reduced school meals. After the measure passed, every K-12 public school student in the state became eligible for free school breakfasts and lunches, regardless of their families’ incomes.
The Healthy School Meals for All program created by Proposition FF also is meant to fund initiatives so that schools can buy Colorado food products, increase pay for school staff who feed students, upgrade equipment and put more emphasis on the nutrition of the meals they provide.
However, the tax revenue generated by Proposition FF has not covered the cost of the Healthy School Meals for All Program, both because more students have sought free meals than anticipated and because inflation has made the cost of food higher than expected.
“As a result, program funding has only gone towards reimbursement for free school meals and administrative costs,” nonpartisan legislative analysts wrote in this year’s state ballot guide, known as the blue book.
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Would this raise my taxes?
No. Proposition LL would not increase the tax burden on any Coloradan.
That being said, another measure on the November ballot related to the Healthy School Meals for All program, Proposition MM, would increase taxes on people and couples earning more than $300,000 by further reducing their income tax deductions. (Read about Proposition MM here.)
So if Proposition MM passes, people and couples earning more than $300,000 in adjusted gross income would pay more in taxes. But if Proposition MM fails and Proposition LL passes, there will be no increase in people’s tax rates.
Proposition MM would also let the state use money collected under the tax change, once it has generated enough revenue to fully fund the Healthy School Meals for All program, to bolster Colorado’s food stamp program after federal cuts.
What happens if Proposition LL fails?
If Proposition LL fails, the state will refund $11.3 million in tax revenue it has collected in excess of projections, plus $1.1 million in interest it has accrued on that revenue, to households with an annual adjusted gross income of $300,000 or more.
Additionally, the state will be forced to reduce the amount of taxes those households pay in the future to prevent ongoing overages. (That’s assuming both LL and MM fail.)
Then there’s the impacts on the Healthy School Meals for All program.
If both Proposition LL and MM fail, only certain students will be eligible for free school meals. If either or both passes, every Colorado student will remain eligible for free school meals.
That’s because state law requires the Healthy School Meals for All program to have at least $150 million in funding from new and existing sources to continue offering meals to all public school students, according to nonpartisan legislative staffers.
“Based on current revenue estimates, if either Proposition LL or Proposition MM passes, the program will meet this revenue target,” the blue book says. “If both measures fail, then beginning January 2026, only certain students will be offered free school meals. In eligible low-income public schools, free school meals will be offered to all students. In all other public schools, free school meals will be offered to eligible low-income students.”
The eligibility would be determined using federal income thresholds.
Who is spending money to support and oppose Proposition LL?
Keep Kids Fed Colorado is the committee supporting Propositions LL and MM. It had raised $352,000 through Sept. 24, including more than $250,000 from Hunger Free Colorado, a nonprofit.
There doesn’t appear to be any organized opposition to the measures, though some Republicans have blasted the initiatives for seeking to retain more in excess of what TABOR allows and for increasing the tax burden on high-earning Coloradans.
The median household income in Colorado was just shy of $100,000 in 2024.