Colorado voters will decide this November whether to raise the state's Taxpayer Bill of Rights spending limit by an amount equal to total K-12 education funding and use the surplus for a decade of compounding school investments. Proposition NN, placed on the November 3, 2026 ballot by the legislature through SB26-135, would allow the state to keep and spend revenue that would otherwise be refunded to taxpayers under TABOR.
The ballot measure in detail
SB26-135 passed the Colorado House 42-21 and the Senate 23-12 on May 20, 2026. No Republican voted in favor, according to the bill status from the Colorado General Assembly. The bill was enacted as Chapter 437 of the 2026 session laws.
The ballot title asks voters whether state investment in K-12 public education should increase 2 percent each year for 10 years, with the money used for teacher pay, teacher retention, smaller classes, and career and technical courses. It states the funding would come through a voter-approved revenue change that raises the annual TABOR spending limit by the amount spent on K-12 education. An independent audit of how the money is spent would be published annually.
The measure creates a "positive factor" that compounds each year from fiscal year 2026-27 through 2035-36. In the first year, the positive factor equals 2 percent of the program foundation calculated for 2025-26. In each subsequent year through 2034-35, it equals 2 percent of the prior year's foundation plus the prior year's positive factor. After 2035-36, the factor stays at that level.
Revenue subject to TABOR is projected to exceed the current cap by $483.0 million in 2026-27 and $674.1 million in 2027-28, according to the fiscal note. The state currently spends roughly $4.6 billion from nonexempt sources on K-12, rising to $4.8 billion in 2026-27.
How the money would be used
The retained revenue goes into a new Children's Account in the General Fund. The first priority each year is reimbursing local governments for the homestead property tax exemption. Next is the positive factor for K-12. If the positive factor absorbs less than half the account, the remainder goes back to K-12 for school services, disability services, and increasing contact hours. Any further surplus is directed to child care, full-day preschool, and other children's programs. After 2035-36, the legislature decides how to spend the money beyond homestead reimbursements.
School districts may only spend positive factor money on four purposes: increasing teacher pay, improving teacher retention, lowering class sizes, and expanding access to career and technical courses. Starting August 1, 2027, each district must post its actual spending of those funds online in a sortable, downloadable format available to the public free of charge, according to the enacted bill text.
A district's share of the positive factor is proportional to its total program under the state's school finance formula relative to statewide total program.
TABOR and the long K-12 funding squeeze
Colorado's Taxpayer Bill of Rights, adopted by voters in 1992, limits the growth of state revenue to inflation plus population change and requires any excess to be refunded. The Gallagher Amendment, also voter-approved, further restricted property tax rates. The interaction of these measures has shaped school funding for decades.
The Colorado General Assembly's official publication School Finance and the Constitution documents that TABOR's ratchet-down mechanism caused school district mill levies to drop permanently whenever property values grew quickly, with those reductions requiring voter approval to reverse. The state's share of K-12 funding rose from about 40 percent before 1992 to around 60 percent in the 2000s as local revenue shrank.
From 2010-11 through 2023-24, the state used a mechanism called the budget stabilization factor, originally the negative factor, to spend less on K-12 than the formula calculated. At its peak in 2012-13, the factor cut $1.0 billion, or 16.1 percent of total program funding. During the pandemic, it hit a record $1.2 billion. The factor was eliminated by 2023-24, at which point per-pupil funding, adjusted for inflation, had returned to its 1989 level, according to the legislature.
Chalkbeat reported in February 2024 that Colorado's inflation-adjusted per-pupil spending had only recovered to 1989 levels after the factor's elimination. In 1989 the state spent $4,629 per student; the projected figure for 2024-25 was $11,319.
Previous TABOR modifications and what they did
Proposition NN is the most significant attempt to modify TABOR's revenue limits since Referendum C in 2005, according to the Colorado State Treasury. Referendum C suspended the TABOR cap from 2006 to 2010 and permanently modified it for future years, allowing the state to retain an estimated $3.7 billion over five years. Despite that infusion, the Great Recession forced deep K-12 cuts through the budget stabilization factor starting in 2010-11.
Amendment 23, approved by voters in 2000, required base per-pupil funding and categorical program funding to increase by at least inflation plus 1 percent annually through 2010-11 and by at least inflation thereafter. It created the State Education Fund with revenue exempt from TABOR. But the legislature's use of the budget stabilization factor effectively reduced total program funding without changing base per-pupil amounts, offsetting much of Amendment 23's intended effect during recession years, the legislature's School Finance and the Constitution publication notes.
What research says about Colorado's school finance structure
A peer-reviewed study published in the journal Educational Policy traced Colorado's school finance history over 45 years and concluded that the state's direct democracy mechanisms created what it called a political logjam constraining budgets for all essential government services, with K-12 education particularly affected. The study describes how voter-approved constitutional amendments interacted to restrict both state and local revenue sources.
The legislature's own School Finance and the Constitution document explains that TABOR and the Gallagher Amendment shifted the funding burden. Before 1992, local sources provided about 60 percent of K-12 funding. After the amendments took effect, the state's share grew to roughly 60 percent. TABOR caused school district mill levies to ratchet down permanently whenever property values rose rapidly, and those rates could not be increased without a new vote of the people.
Proposition NN would allow the state to retain revenue that currently exceeds the TABOR cap and direct it to schools. The fiscal note projects that if voters approve the measure, TABOR refunds would be reduced by $329.9 million in the first year and $521.0 million in the second. The amount retained would grow as the positive factor compounds over a decade.
The ballot measure does not raise taxes. It asks voters to let the state keep revenue it would otherwise have to return.