Colorado Gov. John Hickenlooper during his State of the State address on the House chambers of the Capitol Jan. 12, 2017. (Andy Cross, The Denver Post)

Hickenlooper pot tax hike plan vaults debate over education spending to forefront

A 50 percent increase in recreational marijuana taxes would generate $42 million

Top Colorado lawmakers on Wednesday gave a package of tax hikes introduced a day earlier by Gov. John Hickenlooper an uneasy reception, with members of both parties suggesting they found the proposal lacking but are uncertain of how to proceed.

Related: What the Colorado pot tax hike could mean for consumers, industry

Hickenlooper on Tuesday took the extraordinary step of proposing two tax hikes to send an additional $110 million to public schools, thrusting school funding into the forefront of the state’s budget discussions, even as lawmakers are already embroiled in a fight over a separate tax hike to pay for roads.

The Democrat is calling for a 50 percent increase in sales taxes on recreational marijuana starting July 1, which would generate an extra $42 million.

He also wants to cut the senior homestead property tax exemption in half, freeing another $68 million for schools. The shift would allow seniors to claim a tax break on the first $100,000 in their home value, rather than the first $200,000 allowed in current law.

The proposal is part of his plan to fill a $135 million shortfall in school funding caused by a constitutional provision that this year will trigger a cut in residential property taxes — a primary source of money for local classrooms.

Both moves would require approval of the Democratic-controlled House and Republican-led Senate. And on Wednesday, lawmakers’ reaction to the proposal underscored the increasingly dire condition of the state’s finances and the difficulty of fixing it. Next year, the state would fall more than $850 million short of its school funding requirements even if Hickenlooper’s suggestions are adopted.

“Are we going to keep putting Band-Aids on a gaping wound?” asked Rep. Bob Rankin, a Carbondale Republican who serves on the budget committee. “We need some leadership to fundamentally fix our budget — it’s imploding.”

Rep. Millie Hamner, the top Democratic budget writer, applauded the governor for calling “more attention to the problem.” But, she added: “Personally, I would like to see much bigger, long-range solutions to the problem.”

The immediate crisis was brought on by a collision of two constitutional restraints on tax collections: the Taxpayer’s Bill of Rights, or TABOR, and its lesser-known cousin, the Gallagher amendment.

This story was first published on DenverPost.com