Colorado legislature proposes voter ballot to amend Proposition FF tax deductions

House Bill 1274, introduced in the Colorado State Legislature on April 16, 2025, aims to address the financial implications of Proposition FF, which was approved by voters in the previous election cycle. The bill seeks to navigate the complexities of the Taxpayer's Bill of Rights (TABOR) by proposing a new ballot issue for voter approval, which would allow the state to retain excess revenues generated from the new tax deduction limits established under Proposition FF.

The main purpose of House Bill 1274 is to prevent the state from having to issue refunds due to revenue exceeding the estimates provided in the ballot information booklet. According to the bill, the state recorded higher revenues than anticipated for the fiscal year 2023-24, triggering TABOR's requirement to refund excess revenues unless voters approve a measure to retain those funds. The bill outlines that if the new ballot issue is approved, the state can keep the funds, which would otherwise be refunded, and allocate them to the Healthy School Meals for All program.

Key provisions of the bill include the referral of a new ballot issue to voters at the earliest opportunity, which would seek approval to avoid the refund and the associated increase in tax deduction limits. This approach aims to maintain funding for essential programs while adhering to the constitutional requirements set forth by TABOR.

The introduction of House Bill 1274 has sparked notable debates among lawmakers and stakeholders. Supporters argue that retaining the excess revenue is crucial for funding vital programs like school meals, while opponents express concerns about the implications of circumventing TABOR's refund mechanism. The discussions highlight the ongoing tension between fiscal responsibility and the need for adequate funding in public services.

The economic implications of this bill are significant, as it directly affects state revenue management and funding for educational programs. If passed, House Bill 1274 could set a precedent for how Colorado navigates TABOR's constraints in the future, potentially influencing similar legislative efforts across the state.

As the bill progresses through the legislative process, its outcome will be closely watched, with potential ramifications for both state finances and public services. The next steps will involve discussions and votes in the legislature, followed by the anticipated voter referendum that could shape the future of funding for Colorado's educational initiatives.