Proposition 137: Voters approved $175 million lawmakers do not have to spend

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

Colorado voters agreed Tuesday to send $175 million a year to conservation and wildfire work without raising a single tax rate. The money still has to come from somewhere. In years the state collects more than the Taxpayer’s Bill of Rights lets it keep, it comes out of what would have been refunded.

Lawmakers are not bound to spend it.

Proposition 137 passed with 51.88 percent, 1,347,245 to 1,249,749, a margin of 97,496 in the Secretary of State‘s count last updated at 6:10 p.m. MST Saturday. The Associated Press called it approved at 10:12 a.m. MST Friday.

Only two measures on the ballot finished with a narrower vote margin.

What the money pays for

The certified text adds section 24-77-110 to the Colorado Revised Statutes and creates the Conserve and Protect Colorado’s Water, Land, and Forests Fund. Beginning July 1, 2027, state sales tax revenue from certain sporting goods becomes a voter-approved revenue change, which exempts it from the Taxpayer’s Bill of Rights limit, known as TABOR.

Four shares are set in the statute. Great Outdoors Colorado gets 47.5 percent. A new Colorado wildfire prevention and water fund gets 47.5 percent. The outdoor equity fund and an outdoor recreation economic development cash fund get 2.5 percent each.

In dollars, that is about $83.1 million to GOCO, $83.1 million to wildfire mitigation, forest management and watershed work, and $8.7 million to the outdoor recreation and equity accounts, according to the Blue Book.

Set against what those programs get now, the change is steep.

GOCO runs on lottery money, $87,989,409 of it in fiscal year 2025-26, and receives no state tax funding at all. Wildfire mitigation and forest management currently draw about $16.4 million annually from the state.

Legislative Council Staff estimates the fund reaches $180.2 million in 2028-29. There is no sunset.

By statute, the money must supplement rather than supplant what the state already spends on those programs.

Two officials divide the wildfire half

The wildfire money does not stay in a single account. It passes through one fund and then divides twice more. The statute sets the first of those divisions. It leaves the second to two state officials.

Half the money goes to two Colorado State Forest Service accounts, a forest restoration and wildfire risk mitigation grant program cash fund and a healthy forests and vibrant communities fund. The statute says the state forester decides how much goes to each.

The other half goes to a wildfire mitigation capacity development fund and to the Colorado Water Conservation Board’s construction fund. There the executive director of the Department of Natural Resources decides.

Earmarking is the Blue Book’s second argument against the measure. It says Proposition 137 “directs more money to organizations and government entities with specific interests and limited accountability to the legislature or voters.”

The refund is the funding source

The state does not collect a dollar more under the measure. It keeps a dollar more.

In years when Colorado exceeds the TABOR limit, Legislative Council Staff expects the measure to cut refunds by $175 million in tax year 2027. It also expects the measure to eliminate the six-tier sales tax refund in at least budget year 2027-28. That refund runs between $26 and $83 for a single filer and between $52 and $166 for a joint filer, depending on income.

In years when revenue falls below the limit, refunds are unaffected and the money comes out of the general budget instead. The Blue Book names the three largest claims on that budget as health care, education and human services.

That is the ground for the Blue Book’s first argument against the measure. It calls Proposition 137 “a tax increase in disguise because it reduces or eliminates future TABOR refunds.”

There is a second effect that only shows up because both measures passed. Proposition NN raises the ceiling on what the state can keep. Proposition 137 moves sporting goods revenue out from under that ceiling entirely. The Blue Book says 137 will reduce the amount the state actually keeps and spends under NN.

Nobody has calculated the real number yet

The $175 million is an estimate, and the statute spells out how the actual figure gets produced.

Legislative Council Staff has until March 15, 2027 to run the calculation. The method takes nine sporting goods product codes from 2022 Census data, works out what share of Colorado retail sales they represent, and applies that share to what the Department of Revenue reports.

That is a derived share. It is not a count of what the state collected on sporting goods.

After the first year, the December revenue forecast adjusts the amount annually. The statute says Legislative Council Staff must consider, in making that adjustment, whether actual sales tax receipts for those product codes have become available.

The ballot question told voters the state would “reduce revenue spent on these conservation purposes if necessary to preserve funding for certain tax credits.” The two credits are the family affordability tax credit and the earned income tax credit, which the Blue Book describes as available to low- and moderate-income households.

The statute puts that protection on fiscal years commencing on and after July 1, 2028. It does not cover the first year.

What the opponents argued

Opponents said the money would increase what they call “industrial logging” on as much as 25,000 acres a year, the Colorado Sun reported. Their argument is that thinning at that scale dries the forest out and lets grass take hold, which they say spreads fire rather than slowing it.

Proponents said the work is nothing like that. Scott Fitzwilliams, who ran the White River National Forest, described it to the Sun as small projects near homes.

“We are not talking about backcountry logging. This is community-based, smaller scale funding for work on one to 300 acres adjacent to where people live,” Fitzwilliams said.

The opposition came from two directions

Four issue committees appear on the Secretary of State’s list for the measure, two on each side. The state notes the list is not final.

Protect Colorado’s Land and Water, Prevent Wildfires and a committee called Make Good Change registered in favor. Brendan Witt and Aaron Citron filed the initiative as designated representatives.

The two committees against it do not come from the same place. One is the Colorado Union of Taxpayers, whose registered agent is Kim Monson. The other is Protect Colorado’s Land, Communities, and Tax Dollars, whose registered agent is Josh Schlossberg of Eco-Integrity Alliance.

It describes itself as a grassroots conservation movement of scientists, forest residents and taxpayer advocates, the Sun reported.

The Nature Conservancy, Conservation Colorado and the Trust for Public Land were among the groups behind the measure. Opponents included the Colorado Democratic Party and the League of Women Voters, the Sun reported.

Attorney General Phil Weiser, who won Tuesday’s race for governor, endorsed the measure in September.

RMV published Schlossberg’s commentary against the measure on Oct. 22.

Eco-Integrity Alliance said after the vote that the measure “barely passed by a razor thin margin.” It also said that “some are currently investigating one last option that may impact the passage of Prop. 137, to be announced shortly.” It did not say what the option is or who is pursuing it.

Back to the legislature

The measure became law when voters approved it. It takes effect on the date the governor proclaims the result, which the constitution requires within 30 days of the canvass. The transfers do not begin until July 1, 2027.

Because 137 changes statute rather than the constitution, the General Assembly can amend it with a simple majority.

The Sun’s Jesse Paul reported in October that Democrats in the legislature have signaled they will ignore the measure’s directives in tough fiscal years.

Voters were not told that in the Blue Book. The attempt to tell them was voted down.

House Speaker Julie McCluskie, a Dillon Democrat, pushed to add language to the Blue Book saying lawmakers could limit or cut Proposition 137 funding in years the TABOR surplus falls short.

“They would have the discretion … to be able to use revenues for other purposes in a challenging budgeting environment,” she said.

Legislative Council Staff left the language out, saying supporters had not spelled out that flexibility in the measure itself. Republicans on the bipartisan Legislative Council Committee then rejected the change, arguing that if voters approved the measure the legislature should spend the money the way the measure prescribes.

Tarn Udall, an attorney with Western Resource Advocates, one of the measure’s main backers, told the Sun the campaign wrote it as a statute rather than a constitutional amendment to give lawmakers room to change or pause it.

Where the count stands

Proposition 137 passed 1,347,245 to 1,249,749 out of 2,596,994 votes cast on the question.

AP has called all 14 statewide measures. Seven passed and seven failed.

None of these results are official.