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Date added

September 26, 2013

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Increasing income tax won’t harm Colorado economy

Amendment 66 issue brief two in series of three.
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Changes to state taxes have little influence on business location decisions, the creation of small businesses or other economic activity, according to Increasing the Income Tax Won’t Hurt Colorado’s Economy, an analysis released by the Colorado Center on Law and Policy, Bell Policy Center and the Colorado Fiscal Institute. Other factors, like how the nation is faring economically and how much consumers are spending, are far more important to the economic health of states.
“An extensive body of academic research clearly shows that state tax rates have little to no effect on economic growth,” said Rich Jones, director of policy and research at the Bell Policy Center. “In fact, targeted tax increases that finance better quality education strengthen the economy. Amendment 66 will help ensure we produce the type of well educated workers businesses need.”
The study, Increasing the Income Tax Won’t Hurt Colorado’s Economy, finds that:
• State tax levels only have a minor effect on economic growth.
• Businesses do not make location or relocation decisions based on state and local taxes, in part because they make up a very small portion of business costs.
• Businesses are far more likely to consider access to suppliers, labor costs, the quality of the workforce and the reliability of public services like schools, transportation, and public safety when making important decisions about their companies.
• Taxes also have a minimal effect on the creation of small businesses in a state. States that have income tax rates that rise along with income – another feature of Amendment 66 – actually had increasing rates of entrepreneurship, according to a nationwide study.
• National economic trends have a greater impact on Colorado’s economic growth than state-level tax policies. Colorado’s income growth closely tracks national income growth, not changes in the state income tax. Economic growth in Colorado has fluctuated whether the highest individual tax rate was 8 percent or 4.63 percent.
• Colorado has very little control over the national economy. However, state policymakers have a lot of control over education, and investing in education can have widespread economic benefits for all, such as higher median wages, stronger personal income growth and increased business investments.
This is the second installment in a three-part series outlining the economic benefits of Amendment 66. The first issue brief (Investing in education will boost Colorado economy) showed that investments in education actually spur economic growth. The final brief will demonstrate how Amendment 66 will improve our state tax system. 
Terry Scanlon
Public Affairs Manager
303-573-5669 ext. 311


Date added

September 26, 2013

Resource type

Filed under


To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.


Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.


Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.


Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.