Staff and proponents debate scope of Colorado initiative requiring voter approval for tax expansions

A review-and-comment hearing on proposed Initiative Measure 2025–2026 No. 243 examined how broadly the ballot measure would require voter approval for tax expansions under Colorado’s Taxpayer’s Bill of Rights (TABOR).

For the record, Elizabeth Ramey of Legislative Council staff opened the Feb. 27, 2026 session and said staff were submitting comments and questions on a memorandum dated 02/27/2026 from Legislative Council staff and the Office of Legislative Legal Services. Rebecca Baietti of the Office of Legislative Legal Services summarized staff’s reading of the proposal’s purposes: "The major purposes of the proposed amendment ... appear to be, 1, to require advance voter approval for any tax expansion on and after the effective date of the initiative, and 2, to create a definition of tax expansion that applies to the Taxpayer's Bill of Rights or TABOR."

Why it matters: If adopted, the initiative would change when and how state and local governments may enact tax changes by requiring advance voter approval for a range of actions staff and proponents debated as potentially qualifying as "tax expansions." That could limit legislative or administrative options for altering exemptions, credits, classifications or other tax provisions and create practical and litigation risks for districts that act without prior voter approval.

The hearing focused on definitional limits. Staff asked whether the initiative would sweep in tax‑related changes that courts have treated as new taxes under TABOR, and the proponents affirmed that the intent was to capture changes that have the effect of increasing a taxpayer’s net tax burden, not to rely on subjective intent or de minimis carveouts.

Proponents and staff debated several concrete categories: whether removing or narrowing a state exemption that exists only because of a federal deduction would count; whether striking or renaming a carryover loss or deduction would be covered; whether creating or changing tax classifications — for example, reclassifying prepared deli food into a taxable category — would qualify; and whether agency interpretations or administrative corrections would trigger the voter‑approval requirement. The proponent said some of those scenarios "might fall under a lot of different potential types of things" and that courts' prior decisions are part of the frame for resolving borderline cases.

On partial reductions and eligibility restrictions, the proponent said narrowing who can claim a tax expenditure or cutting a credit’s amount would count if the change has the net effect of raising a taxpayer’s burden. On whether temporary, formula‑based suspensions or planned expirations would require a separate voter approval before expiration, staff and proponents indicated they would not require preemptive voter approval.

The parties also discussed what "net effect of raising the tax burden for any taxpayer" means in practice. The proponent described "net" as the difference between what taxpayers were previously paying and what they would pay after the change, stressing the proposal seeks to focus on numerical effects rather than legislative intent. Staff and proponents agreed that if a change raised the tax burden for even a single taxpayer, that could trigger the requirement even if most taxpayers saw a reduction.

On remedies, the hearing cited TABOR‑style consequences if a district implements a tax expansion without prior voter approval: refunds plus a penalty (discussants referenced a 10% interest/penalty in the text). A proponent stated that obtaining voter approval after the fact would not cure legal consequences for a district that had already put a tax expansion into effect.

Exchanges highlighted drafting questions proponents said they would revisit, including whether terms such as "carryover loss" should be retained or whether the initiative’s definition could be simplified by referring to a "tax not previously assessed." As the proponent put it, "I wasn't thinking about that specifically when I drafted it," indicating openness to technical revisions.

No formal vote or action occurred; the hearing concluded after staff invited any final remarks and none were offered. The memorandum and the discussion identify multiple drafting points proponents said they intend to address before a final text is submitted or advanced.

What’s next: The record from the review-and-comment hearing will inform revisions to the proposed initiative language; the proposal’s effective date would default to the official proclamation date unless the proponents specify otherwise in the initiative text.