The passage of Amendment 66, which proposes a $950 million tax increase along with a restructuring of Colorado’s K-12 school finance system, would be a long-term drag on the economy — but that could be more than offset if the reforms produce significant educational gains, a pair of studies found.
The infusion of tax revenue into education would boost employment most years until 2040, but those gains would be countered by slower growth in other sectors due to the tax increase, according to economic models analyzed by the Leeds School of Business at the University of Colorado Boulder.
But if the education reforms produce higher graduation and college matriculation rates, the economic benefits could average an additional $139 million in GDP annually over that same time span, according to a companion report.
The studies were commissioned by a consortium of business groups — the Common Sense Policy Roundtable, the Denver South Economic Development Partnership and the Metro Denver Economic Development Corporation.
Tom Clark, CEO of the Metro Denver EDC, said the group advanced the studies in the hope of creating “a less polarized conversation on policy and tax issues.”
The second CU study sought to find the level of academic success necessary to improve economic conditions to the “break even” point, said Brian Lewandowski of the Business Research Division at the Leeds School.
“Even when you’re the best in the nation, graduation rate alone doesn’t get to break even,” he said. “We need a lot of improvement in educational performance for it to have profound positive impact on Colorado’s economy – but it’s not unachievable.”
The study also examined various taxing alternatives and found that a progressive tax increase provided the least damaging means to increase funding for public programs.
Proponents of Amendment 66 noted that another study, by the Daniels College of Business at the University of Denver, projected an ever greater economic boost than the best-case scenario of the CU study.