1-minute voter guide: What to know about Proposition II on tobacco taxes
Proposition II asks voters if the state can keep $23.7 million in excess tax revenue it collected from tobacco and nicotine products — and continue to increase taxes in the future.
Why it matters: The ballot measure comes with a big price tag that holds significant implications for state spending in future years.
What's happening: Colorado voters overwhelmingly approved Proposition EE in 2020 to impose a new tax on nicotine products and increase taxes on cigarettes and tobacco.
- But the revenue collected exceeded nonpartisan estimates.
Be smart: The Taxpayer's Bill of Rights in the state constitution requires any tax revenue in excess of the estimate to go back to taxpayers, unless voters allow the state to keep it.
Between the lines: The estimate anticipated a slight decrease in cigarette and tobacco consumption — and lower tax collections — because of the increased prices for consumers under Prop. EE.
- But revenue actually grew — largely because of the popularity of vaping products, analysts say.
By the numbers: The excess $23.7 million would go toward providing at least 15 hours of tuition-free preschool for 4-year-olds and help address a shortage of money that hampered the program's launch this year.
- It also will make more money available for discretionary spending by lawmakers from the general fund.
The other side: If Prop. II fails, the state would refund the excess revenue through an yet-undetermined method.
- The tax rate on tobacco and nicotine products also would drop by 12% to prevent future overages in collections.
The intrigue: The implications of the vote go well beyond this excess revenue. Prop. EE calls for future increases in tax rates and minimum prices, increasing to 62% on tobacco and nicotine products by 2027.
- Those tax hikes would not happen if Prop. II fails.
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