Colorado voters passed Proposition NN on Tuesday, raising the limits on how much revenue the state can keep and spend under the Taxpayer’s Bill of Rights, according to unofficial results. MultiState’s tracker had it at 55.68% yes. In the 2026-27 budget year the new limit sits $4.6 billion above the current TABOR cap, and the extra money is aimed at K-12 schools.
For Colorado taxpayers, the question is what happens to the TABOR refund that follows when the state collects more than the cap allows. Under Prop NN the state keeps that money, up to the new limit, instead of sending it back. Refunds shrink or disappear in any year when collections land between the old ceiling and the new one.
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How does Proposition NN change the TABOR cap?
TABOR, the constitutional limit on state revenue, requires Colorado to refund collections above a cap. Prop NN sets a higher ceiling: the current TABOR limit plus the highest amount the state has spent on K-12 education from certain funding sources in earlier years, according to a Colorado legislative staff summary. That limit “continues indefinitely.”
The new ceiling is far above what the state expects to collect. Colorado Politics reports that current projections show the state keeping about $500 million in 2026-27, the amount expected to exceed the existing cap. Legislative staff expected Prop NN to eliminate all TABOR refunds for 2026-27 and 2027-28, and revenue above the new limit would still go back to taxpayers. The staff summary called a collection total above the new limit unlikely for the next several years, which is why refunds are expected to stay at zero for a while.
Chalkbeat’s guide calls it a permanent change to TABOR, since the higher limit has no end date. Supporters call it a stable, long-term funding source for public education and children’s programs. The point opponents press hardest is that it gives the state billions without future voter approval.
The National Taxpayers Union Foundation says the measure raises the TABOR spending caps by over 25%. Its analysts called it “another nail in the coffin for TABOR” and wrote that refunds “will be unlikely” for the foreseeable future.
Where does the money Colorado keeps actually go?
For the first 10 years, retained revenue goes first to reimburse local governments for certain required property tax exemptions. What is left goes to a new Children’s Account for K-12 education and children’s programs, including teacher pay and retention, smaller classes, career and technical education, disability services and extra instructional time. Chalkbeat’s voter guide says the state would use the money to raise education funding by 2% a year over that decade.
After 10 years, money in the account goes first to K-12 education, and lawmakers decide how to spend the remainder. Chalkbeat notes they could put it toward any state program or service. Supporters point to a state study that found a $3.5 billion school funding shortfall, about $4,000 per pupil.
Who backed Prop NN, and who fought it?
The yes campaign, Yes for Colorado Kids, is a coalition of about 70 advocacy groups and six school boards, with the Colorado Education Association helping to lead it. Members include the Colorado Association of School Executives, the Colorado Association of School Boards and the American Federation of Teachers. Most Democrats in the legislature voted to put the measure on the ballot, and Republicans were unanimous in opposing it.
Student voices turned up in the campaign too. James Pacheck, a junior at Pueblo West High School, told KKTV that teachers lack resources and described “crappy books that are falling apart.”
Opponents included Advance Colorado, whose president, Kristi Burton Brown, said “Colorado families aren’t having an easy time.” The group argues the state can already improve education under its current budget and that the bill text does not guarantee the money stays in schools after 10 years. Other opponents called it “essentially a tax increase” and noted that school funding rose 25% over five years while enrollment declined.
Several groups ran the no side, including Keep Colorado Affordable, Let’s Go Colorado, Affordable Colorado and Your Family’s Future Alliance. They argued the state already collects enough revenue and should limit the growth of its programs instead. One argument against the measure said it would eventually hand the state more than $5 billion a year, and opponents said families rely on TABOR refunds.
What is still undecided on Colorado’s ballot?
Two other tax measures were still uncalled in MultiState’s count. Amendment 87 would replace the 4.4% flat income tax with graduated rates from 3.7% to 8.4% and drop TABOR’s uniform-rate requirement, and it stood at 50.63% yes. Proposition 136 would cap income tax rates at 4.4%, and it stood at 47.48% yes.
Prop NN’s 55.68% is a wider margin than either of those measures had in the count. The two conflict, and under state law the measure with more yes votes controls where they collide. Those counts are unofficial and still moving, so Colorado households will not know the full picture for their 2027 tax bills until the results are final.
Counting on a Colorado TABOR refund?
If Prop NN works as legislative staff expected, TABOR refunds could be gone for two budget years, which leaves a household’s own tax bill as the line it can still move. For a retiree that bill turns on what counts as income and on a state’s own rules.
Prop NN is about the state’s books, not a retiree’s return, so the closest honest help is a guide to the lines a retiree controls. Cut Your Retirement Tax Bill: 12 Moves works out how much of your Social Security is taxed on one worksheet and covers your state’s rules, including the eight states that tax some Social Security, in 14 pages of 2026 numbers.
Get the 12-move guide to the tax lines you control while TABOR refunds shrink →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
