Colorado’s tobacco and nicotine taxes will remain unchanged and the state will reap an extra $23.65 million in preschool program funding after voters on Tuesday night approved Proposition II.
As of 10:40 a.m. Wednesday, nearly 67% of voters were supporting Proposition II while 33% voted against it, out of 1.4 million votes counted.
Prop. II is a tax-retention measure that asked voters to allow the state to keep excess tax collections under the Taxpayer’s Bill of Rights. It’s a sequel to 2020’s Proposition EE, which raised taxes on cigarettes and other tobacco products and created a new tax on certain nicotine products, such as e-cigarettes and vapes. Voters approved that tax increase by a 2-to-1 margin.
Prop. EE added $1.10 to the price of a pack of cigarettes on top of an existing 84-cent tax; the EE portion of the tax is set to increase to $1.40 in July and then to $1.80 in July 2027. Tax increases on other items included an initial 50% tax on e-cigarettes and vape products that is set to increase to 62% by mid-2027.
The 2020 measure resulted in more tax revenue collected than state analysts projected, requiring voter approval under TABOR for the state to keep the excess amount. If Proposition II failed, the state would have had to refund the extra tax money back to tobacco and nicotine product wholesalers and distributors, as well as lower EE’s tax rates.
The state instead plans to direct the nearly $24 million at issue in Prop. II toward supporting Colorado’s fledgling universal preschool program, one of the beneficiaries of the EE taxes.
Universal preschool leaders have said they would use the money to make more low-income families eligible for 30 hours per week of class time, versus the 15 hours every child qualifies for during the year before they begin kindergarten.
Prop. II faced scant opposition, according to campaign finance records, while groups including Healthier Colorado, the American Heart Association, Gary Advocacy, and Save the Children bankrolled the initiative with about $265,000 in contributions.
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