Nov 1, 2023 - News

Why Proposition II matters so much in Colorado

Illustration of an umbrella made of money covering a voting booth

Illustration: Sarah Grillo/Axios

Proposition II asks voters if the state can keep $23.7 million in excess tax revenue it collected from tobacco and nicotine products.

Why it matters: The implications of the vote and financial impact go well beyond the actual ballot language.

What's happening: Colorado voters approved increases in the prices and taxes for tobacco and nicotine products as part of Proposition EE three years ago.

  • If Prop. II fails, those future increases would get negated, and the taxes on those products would actually decrease.

Be smart: Prop. EE collected $23.7 million more in taxes than initially forecast. The Taxpayer's Bill of Rights in the state constitution says lawmakers must seek voter approval to spend the overage, which is why Prop. II is on the ballot.

How it works: If it passes, the price tag on nicotine and tobacco products would continue on schedule.

  • Taxes on cigarettes would increase to $2.54 a pack by July 2027, a 31% increase from current rates. The minimum price for a pack of cigarettes also would increase 50 cents per pack to $7.50 starting in July 2024.
  • Taxes on other tobacco and nicotine products would increase to 62% of the listed price, up from the current rate of 50%.

By the numbers: That amounts to $32.1 million in new state revenue for the 2024-25 budget year, analysts say.

  • Much of it is earmarked for the state's tuition-free preschool program.

The other side: If Prop. II fails, the state would refund the excess revenue through a yet-undetermined method and lower the tax rate on tobacco and nicotine products by 11.5% to prevent future overages.

Go deeper: More voter guides

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