Committee advances bill to refer 2026 measure to relax state revenue cap and fund K–12

The House Appropriations Committee on [date] advanced Senate Bill 135, a proposal to refer a November 2026 ballot measure that would allow Colorado to retain certain revenues above the state’s REF C limit and prioritize spending for K–12 education.

Assistant Majority Leader Bacon and Rep. Lukens, the bill’s co-prime sponsors, described the measure as a way to provide stable revenue for schools without raising individual taxes. Lukens said the bill would create a children’s account to retain revenue above the REF C cap and establish a positive factor to distribute funds to districts, explaining that the positive factor would be available for teacher pay, retention, smaller class sizes and career-and-technical programs. "This bill refers a November 2026 ballot measure to voters," Lukens said, adding that the proposal would require an annual general-fund K–12 increase of up to 2% for the next 10 years and a public audit of retained revenue.

Sponsors asked the committee to adopt amendment L022, which changes two mechanics of the bill: it sets the positive factor as the greater of 2% growth or half the revenue available above the REF C cap, and it removes an acceleration factor that, sponsors said, produced disparate allocations among districts. "L22 removes that acceleration factor and just distributes the positive factor through a non-formula distribution mechanism," Lukens said.

Legislative Council economist Emily Dorman explained the measure’s interaction with trigger tax credits, telling the committee that the bill does not change the mechanics that determine whether tax credits such as the FTSE or EITC are triggered. "If the tax credits are triggered on, then that reduces the amount of available revenue, so it influences how much is retained by this measure," Dorman said, while adding that the bill itself does not change credit formulas.

Four people testified during the witness phase. Natalie Menton urged clearer ballot language and more transparency about where retained revenues would originate and how the ballot question would read, arguing that earlier measures provided more detail required by TABOR and state statute. "What should be in this bill would be something along the lines of 'Shall state revenues that exceed the constitutional limit on state fiscal year spending estimated to be [dollar amount] be retained...,'" Menton said, urging sponsors to clarify the ballot title.

Online witness Brandon Wark called the measure deceptive and said the ballot title does not disclose that it would forfeit certain TABOR refunds and be permanent rather than time-limited. "The ballot title does not clearly portray what this measure will accomplish," Wark said, urging a no vote.

Education stakeholders testified in support. Brett Johnson, CFO and COO of Aurora Public Schools, said the amendments (including the greater-of approach in L022) would better capture floor and upside revenue and that CASE (the Colorado Association of School Executives) would support the bill as amended. "This bill as potentially amended really maximizes the potential benefit for K–12 of those revenues above the current REF C cap," Johnson said. Kevin Vick, president of the Colorado Education Association, described a multi‑billion dollar estimated shortfall in K–12 funding and urged passage: "Every child in Colorado deserves a fully funded public school..." he said, adding that the bill would let voters raise the outdated revenue cap without raising taxes.

After the witness phase the committee adopted L022 without objection and then moved Senate Bill 135 as amended to the Committee of the Whole. A roll-call vote recorded nine yes and two no votes.

Next steps: SB 135 will be considered by the Committee of the Whole before a possible floor vote. The sponsors said they are willing to continue discussions about ballot language and transparency.