Amendment 73 proposes an income, corporate, and property tax hike to raise money for K-12 public education. Academic economist, Dr. Linda Gorman, commented in her thorough analysis of the 1.6 billion-dollar tax increase that there is no guarantee that increased spending will lead to additional educational opportunities. Furthermore, the amendment would end protections against continuous increases in residential property taxes. Others discuss their extensive concerns over the efficacy of this tax hike, including Jon Caldara and Larimer County Assessor Steve Miller.
From an economic standpoint, there are a few questions that seem to always elude these policy proposals. Does increasing school funding lead to improved educational outcomes? What are the adverse effects of increasing taxes on income-earners and job-creators?
Study after study has highlighted how additional funding rarely leads to improved educational outcomes, yet another state ballot measure raising taxes for education has made it onto the ballot.
In a meta-analysis of about four-hundred studies, factors such as teacher education and experience, teacher-pupil ratios, expenditure per-student, and teacher salary, were found to rarely affect student outcomes.
From 2003 to 2017, Colorado average state and local education revenues have increased by 36 percent. Although, on the National Association of Education Progress (NAEP) report, the national benchmark in educational performance, Colorado student achievement has barely moved. During the same time frame, Colorado’s 4th-grade reading NAEP scores have merely increased 0.4 percent, and 4th-grade math NAEP scores have increased 2.6 percent.
International comparisons are even more worrying. Among the high-income countries in the Organization of Economic Cooperation and Development (OECD), the United States spends the fourth most in K-12 education.
The United States spends more on K-12 education than many countries that outperform us, including Korea, Germany, the Netherlands, and numerous others. Despite spending substantially more than most other high-income countries, the United States scored below the thirty-six country average in mathematics, and only scored barely above average in reading scores.
In spite of the research, many believe the United States’ worsening K-12 international education ranking is due to insufficient funding. These findings highlight that greater systemic and cultural problems are affecting our schools and suggest that exploring other successful educational models is necessary.
In addition to concerns that additional funding rarely leads to improved education outcomes, additional taxes also negatively affect the economy in other ways. Tax policy says taxes have two main effects, raising revenue and disincentivizing the activity being taxed. In the case of Amendment 73, the measure decreases personal income, reduces incentives for business, and increases the cost of owning property. This measure will make home ownership less affordable for low-middle income families and retired individuals living on fixed incomes.
The end result of drastic tax increases will make our state less attractive for business and may slow the economic Colorado is experiencing. Other states, with more competitive tax systems, may be able to capture the business and income migration that would have come to our state if it were not for Amendment 73.
Research has highlighted how education spending rarely affects educational outcomes. Colorado’s 36 percent increase in education revenues from 2003-2017 resulted in little to no change in student achievement. Voters need to weigh whether the unlikely benefits of Amendment 73 outweigh the costs to our economy and disposable income.