Proposed tax hikes headed for defeat in Colorado (Reuters)

DENVER (Reuters) ? A Colorado ballot proposal to raise state income and sales taxes for the sake of public schools was headed for defeat on Tuesday, according to early election returns from the state's most populous counties.

The outcome of Proposition 103, aimed at generating $2.9 billion over the next five years, was being watched closely as an indication of voter sentiment on tax hikes in a key battleground state for the 2012 presidential election.

It could also shape tax-related ballot measures expected to surface in several other states next year.

Prop 103 would raise Colorado income taxes -- a flat rate for all income levels -- to 5 percent from 4.63 percent and boost the state sales tax rate to 3 percent from 2.9 percent for five years only.

But early returns from the state's five most populous counties showed the measure trailing decisively, including in liberal-leaning Denver County, where votes against were running nearly 10 percentage points ahead of votes for approval.

The Denver Post reported at 9 p.m. local time that the measure was losing statewide, 65-35 percent, with 61 percent of precincts reporting.

The measure's chief proponent, state Senator Rollie Heath, a Democrat from Boulder, told Reuters: "There is no need to concede. The numbers speak for themselves."

Opponents, citing a Portland State University study, say the Colorado tax measure if passed would put an estimated 119,000 jobs at risk at a time the state continues to suffer from a sluggish economy and high unemployment.

"The last thing we need in this economic climate is a $3 billion tax increase," Colorado Republican Party Chairman Ryan Call said.

He said a state constitutional amendment passed by voters in 2001 already increased state funding for public education automatically, and Prop 103 failed to specify exactly how the new education money would be spent.

"There just wasn't an appetite to give the Legislature another blank check," Call said in an interview.

Prop 103 supporters say bringing in more revenue is the only way to prevent deeper damage to Colorado's strained public education system, which saw spending slashed by $227.5 million this year to help close a state budget gap.

Governor John Hickenlooper, a Democrat, on Tuesday proposed additional education cuts of more than $80 million for fiscal year 2012-13.

Prop 103 has also helped draw attention generally to flat taxes, an approach to revenue-raising espoused recently by two Republicans vying for the party's presidential nomination.

Businessman Herman Cain and Texas Governor Rick Perry have recently questioned the federal graduated tax system and proposed using a flat rate for U.S. taxes instead.

(Writing by Steve Gorman; Editing by Peter Bohan)

Source: http://us.rd.yahoo.com/dailynews/rss/us/*http%3A//news.yahoo.com/s/nm/20111102/us_nm/us_colorado_taxes_vote

apple news conference apple news conference apple news apple iphone apple iphone chris christie cnet