DENVER | The fate of a sweeping ballot measure that would direct an estimated $300 million a year to affordable housing projects by rewriting Colorado’s tax law was too early to call late Tuesday.
As Colorado residents and people nationwide struggle to afford housing, Proposition 123 is the only statewide affordable housing initiative in the country to make the ballot for the 2022 election, according to the National Conference of State Legislatures.
If the measure passes, it will direct 0.1% of Colorado’s taxable income every year to a number of programs that include helping essential workers buy homes, offering eviction defense and providing funding for local governments to address their housing troubles as they see fit.
Proponents say the measure could build 170,000 homes and rental units over two decades in this rapidly growing state. The U.S. Census Bureau estimates Colorado’s current shortage at 225,000 homes; supporters say Proposition 123 could help make up that deficit while avoiding a tax hike.
But the measure would also eat into tax refunds guaranteed to residents under a constitutional amendment called the Taxpayer’s Bill of Rights, or TABOR — which Coloradans tend to favor. The amendment caps the amount of money the government can spend annually and mandates refunds of any revenue surpassing that cap.
For the 2021 tax year, Coloradan taxpayers each received $750 checks. And under TABOR, any tax increase, be it local or statewide, must be approved by voters.
Allegra Shippy, 24, said pandemic-era housing prices and increased homelessness pushed her to support the measure. She said the reduced tax refunds were a “small price to pay,” adding the measure could save money in the long term on emergency and healthcare services for the homeless population.
“It’s an issue individuals cannot solve,” said the software engineer, who voted late Tuesday in Arvada, a Denver suburb, with her sister.
But investment banker Sameer Kandola, 30, said the measure “seems more like a Band-Aid” that would take too much out of tax refunds amid inflation and does not address the core problem of homelessness and bloated housing prices. Instead, he said, there should be a broader plan to support more housing construction from the market and offer expanded mental health and addiction treatment.
Many past measures that would have affected state refunds have failed. In 2019, a ballot measure that would have allowed the state to keep excess revenue to spend on education and public transportation was defeated by 53% of voters.
Despite that history, advocates of the housing measure are optimistic, believing that sky-high rents and home values brought on by the pandemic will encourage Coloradans of all political persuasions to vote for it.
Opponents, including the conservative advocacy group Advance Colorado Action, argued there is no guarantee that the state-directed funds would produce the number of housing units promised.
Jesse Bedayn is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.