Fiscal Measures that Passed on Colorado’s 2026 Ballot
Prior to the election, the Romer Institute of Evidence-based Policy provided an analysis of different scenarios regarding the fiscal measures on the ballot, based on the potential outcomes of the election. Now that the voters have spoken, we provide here an updated analysis of what the fiscal measures approved by the voters means for Coloradans.
NOVEMBER | 2026
Introduction
A total of fourteen referred and initiated statewide measures appeared on Coloradans' ballots this November. Of those fourteen, four made changes to the State's fiscal policy through various mechanisms, ranging from increasing taxes on high-income individuals and corporations to diverting existing sales tax revenue from the State's General Fund to conservation efforts. In October, this memo explored what each measure does, how they could impact the State's budget, and what would happen if any combination of these measures passed. This addendum reports what voters decided and describes the impact of the combination that passed.
The Results
Three of the four fiscal measures passed. Proposition 136, which would have held the income tax rate at 4.4%, failed.
| Measure | Result |
|---|---|
| Amendment 87, Graduated Income Tax | Passed |
| Proposition NN, Raises the TABOR Limit and Keeps Excess Revenue for Education | Passed |
| Proposition 136, Limit the Income Tax Rate | Failed |
| Proposition 137, Sporting Goods Sales Tax Diversion for Conservation | Passed |
Source: Colorado Secretary of State, 2026 General Election certified results.
The Measures that Passed
The three measures that passed each impact the state budget, tax rates, and/or the TABOR revenue limit. Each measure's main points are described below.
Proposition NN – Raises the TABOR Limit and Keeps Excess Revenue for Education
What it does: This measure allows the state to keep and spend revenue it would otherwise be required to refund to taxpayers, in an amount equal to what the state spends on K-12 public education each year.
What it means: It eliminates TABOR refunds for the foreseeable future and spends those funds on education. There is no tax increase and no new state revenue.
Who put it on the ballot: The Colorado General Assembly through Senate Bill 26-135.
Fiscal impact: $329.9M in FY27, $521M in FY28, varied in future depending on TABOR refunds; eliminates refunds both years; $100k income will lose $28 as single filer or $56 as joint filer in FY27.
Where the money goes: It directs a 2% annual increase in K-12 education funding for 10 years (FY 2026-27 through FY 2035-36), funded through any revenue retained from increasing the TABOR limit. How school districts may spend the new "positive factor" funding is restricted to teacher pay increases, teacher retention, lower class sizes, and career/technical education. The measure creates a Children's Account in the General Fund to hold retained revenue, with remaining funds (beyond the education increase) directed to child care, preschool, and children's services.
Proposition 137 – Sporting Goods Sales Tax Diversion for Conservation
What it does: This measure diverts existing sales tax revenue on sporting goods away from the state's general fund to a special cash fund dedicated to conservation efforts. There is an exception to the diversion if it would impact state tax credits for low-income households.
What it means: No new tax is imposed. This reclassifies revenue that was subject to the state's TABOR limit as not subject to TABOR. This leaves more space under the TABOR cap, making it harder to reach and effectively lowering TABOR refunds.
Who put it on the ballot: Brendan Witt of Western Resource Advocates, and Aaron Citron of The Nature Conservancy.
Fiscal impact: $175M in FY2027-28 and $180.2M in FY2028-29. The measure reduces general fund revenue in years without a TABOR surplus, and decreases TABOR refunds in FY2027-28.
Where the money goes: 47.5% to the Great Outdoors Colorado program; 47.5% to wildfire prevention and watershed protection; 2.5% to Colorado's Outdoor Equity Grant program; 2.5% to Colorado's Outdoor Recreation Industry Office.
Amendment 87 – Graduated Income Tax
What it does: Changes the state constitution to allow graduated tax rates and changes the state's income tax rate from a flat rate of 4.4% for all income levels to a graduated rate structure varying from 3.7% to 8.4%.
What it means: Individuals, households, and businesses with taxable income under about $510,000 per year will pay less in income taxes, while those with taxable income over that amount will pay more in taxes. The tax cuts are relatively small, while the tax increases are large. This does not impact TABOR refunds.
Who put it on the ballot: Chris deGruy Kennedy with the Bell Policy Center and Kiayana Newell with the Protect Colorado's Future Coalition.
Fiscal impact: $950 million in FY 2026-27, which is a half-year impact, and about $1.98 billion in FY 2027-28.
Where the money goes: All funds must supplement and not supplant public K-12 education, publicly funded healthcare, or early childhood education or care. The measure does not specify the allocations to each bucket of funding, so it will be determined by the legislature.
Proposition 136 – Limit the Income Tax Rate (Failed)
Proposition 136 would have capped the state income tax rate in state statute at the current rate of 4.4%. Had it passed with more votes than Amendment 87, it could have blunted the graduated rate structure in Amendment 87, a conflict that might have been subject to judicial or legislative review. Because Proposition 136 failed, all of the new graduated income tax rates under Amendment 87 take effect.
Fiscal Impact Comparison
The table below shows the amount of state revenue collections and changes in TABOR refunds for the current and next two fiscal years.
| Measure | FY 2026-27 | FY 2027-28 | FY 2028-29 | |||
|---|---|---|---|---|---|---|
| Revenue | TABOR Refund | Revenue | TABOR Refund | Revenue | TABOR Refund | |
| Amend. 87 | $958.4 M | - | $1,980 M | - | $2,060 M | - |
| Prop. NN* | $329.9 M | -$329.9 M | $521M | -$521 M | ||
| Prop. 137 | $0 | -$175.0 M | $0 | -$180.2 M | $0 | -$185.6 M |
| Combined | $1,288.3 M | -$329.9 M | $2,501 M | -$696 M | $2.060 M | -$180.2 M |
|
*Proposition NN does not collect new revenue but retains revenue that would otherwise be refunded to taxpayers. Source: Legislative Council Staff Blue Book fiscal estimates; author’s calculation in FY2028-29. |
||||||
State Revenue and TABOR Impacts
To put these new funds into context, it is important to understand how these measures impact state spending relative to current spending. Only Amendment 87 and Proposition NN directly increase state spending, since Proposition 137 diverts existing state revenue to specific purposes. While Proposition 137 does not increase spending directly, it may over time, as it lowers revenue subject to TABOR, giving the legislature more funds to spend.
Starting in the current fiscal year, FY 2026-27, the state will have an additional $1.3 billion to spend as a result of Amendment 87 and Proposition NN. That equates to a 2.6% increase in total state funds appropriated for the same fiscal year, which includes cash funds and federal funds. If only considering General Fund dollars, that is a 7.4% increase in spending.
The chart below represents the prior Referendum C limit (dotted line) and the new TABOR revenue limit under Proposition NN (solid line). Additionally, revenue subject to TABOR before Proposition 137 and revenue subject to TABOR under Proposition 137 are represented in the bars. This shows the relatively small difference in revenues subject to TABOR but the large difference in TABOR revenue limits.
Each measure's distribution requirements provide funding to existing state programs. Current funding for these programs and the incremental funding they will receive is shown in the table below. The figures are illustrative of how and which programs will be funded, since Amendment 87 and Proposition NN give ultimate spending decisions to the state legislature.
| Measure | Program | Current State Funding | Additional Funding under Measure – FY 2027-28 |
|---|---|---|---|
| Amendment 87 | K-12 education (CDE) | $5.6B | $1.98B |
| Medicaid (HCPF) | $6.1B | ||
| Early Childhood Education (CDEC) | $308.7M | ||
| Proposition NN | K-12 Education | $5.6B | $521M |
| Child Care | $37.6M | ||
| Preschool | $147.9M | ||
| Proposition 136 | - | - | - |
| Proposition 137 | GOCO | $90.0M* | $83.1M |
| Wildfire Prevention | $16.4M | $83.1M | |
| Watershed Protection | $0.8M | ||
| Colorado’s Outdoor Equity Grant program | Up to $4M | $4.4M | |
| Colorado’s Outdoor Recreation Industry Office | $1.1M | $4.4M | |
|
*FY2024-25 from GOCO’s website. Source: Joint Budget Committee Appropriations Report FY2026-27. |
|||
How the Measures Work Together
In October, this memo described seven scenarios depending on which combination of measures passed. Voters chose the combination of Proposition NN, Amendment 87, and Proposition 137, with Proposition 136 failing. The impact of that combination is described below. Because no conflicting measures passed, no interpretation by the courts or the legislature is required.
Proposition NN replaces the revenue limit put in place by Referendum C with the new Proposition NN cap and eliminates TABOR refunds for the current forecast period (through FY 2028-29) and possibly beyond.
Graduated income tax rates take effect under Amendment 87, both increasing and decreasing taxes for individuals and corporations, collecting additional state revenue. This amendment has no impact on TABOR refunds. Because Proposition 136 failed, all of the new graduated income tax rates take effect.
Proposition 137 diverts existing sales tax revenue in the General Fund to specific funding areas, reducing state revenue subject to TABOR. Because this revenue no longer counts toward the TABOR limit, the state must collect roughly $175 million more before reaching the limit starting in FY 2027-28, which reduces what Proposition NN retains. This lowers the amount of state funds allocated to Proposition NN priorities, including K-12 public education, by $175 million during the first year it takes effect.
Other Considerations
TABOR revenues comprise both general funds and cash funds. Tax revenue, and some fees, are deposited into the General Fund and are available for flexible uses. Cash funds can be either tax or fee revenue and are earmarked for specific expenditures. The state legislature has the ability to raise fees without going to the voters for approval. When a new cash fund fee is implemented, the revenue is subject to TABOR, unless approved by voters. When cash fund revenue subject to TABOR increases, it increases total revenue subject to the TABOR revenue limit. The state is required to refund General Fund monies to voters if the limit is exceeded, while cash fund revenue is untouched.
Before this election, if cash fund fees were increased, it reduced the amount of General Fund revenue available for the state to spend or save for general purposes when the TABOR limit was exceeded. This dynamic prohibited the legislature from adding new cash fund revenue subject to TABOR. With Proposition NN raising the TABOR limit by $4.6 billion, the state legislature can raise cash fund fees without concern about hitting the TABOR revenue limit. However, General Fund revenue above the old TABOR limit will instead be allocated to the spending distributions required by Proposition NN instead of being refunded to taxpayers.
What Happens Next
The impacts of two of these approved measures start during the current fiscal year, which ends June 30, 2027. Both Propositions NN and 137 are prescriptive in their funding allocations; however, Amendment 87 leaves much of the decision making to the incoming Governor and legislature, which begins their 2027 legislative session on January 11. While a budget proposal was submitted by the outgoing administration on November 2, the incoming Governor can revise the budget proposal by the supplemental budget deadline of January 4, 2027. This may and will likely include proposals for how to allocate Amendment 87 and some Proposition NN funds.
| Measure | Effective Date | Spending Decisions |
|---|---|---|
| Amendment 87 | January 1, 2027 (tax year 2027) | Governor & legislature |
| Proposition NN | FY 2026-27 (current fiscal year) | Governor & legislature |
| Proposition 137 | July 1, 2027 (FY 2027-28) | Proposition 137 spending formulas |
Amendment 87 provides the most flexibility for decision making having only prescribed the following spending categories:
- K-12 Public school education, including:
- Improving kindergarten through 12th grade;
- Increasing access to career and technical education programs; and
- Increasing teacher pay.
- Health care, including:
- Programs to help families afford health care;
- Replacing Medicaid funding lost due to recent federal legislation, and paying for implementation of new federal requirements;
- Increasing funding for primary care, behavioral health and rural health care;
- Supporting health care, long-term care, and other supports for older adults and people with disabilities; and
- Programs that increase access to nutritious food.
- Early child care and education, including:
- Programs to help families afford child care;
- Increasing pay and support for the child care workforce; and
- Improving access to high-quality early childhood education programs
The next update to Colorado’s fiscal outlook will come on December 18 when state economists present updated revenue forecasts and roll the impacts of these measures into the state’s fiscal outlook. The December forecast also provides updates to the Family Affordability Tax Credit and the expanded Earned Income Tax Credit, which determines whether these credits will be “on” or “off” for the upcoming tax year. There will likely be additional debate about tax credits in the upcoming legislative session given the reduced flexibility of excess TABOR revenue to fund tax credits.