Democrats in the state Legislature sent Proposition NN to the ballot.

They say it will increase funding for K-12 education without increasing taxes. But if it passes, taxpayers will receive fewer refunds, and the state will have more money to spend.

Proposition NN would eliminate refunds under the Taxpayer's Bill of Rights, or TABOR, for the foreseeable future and allow the state to keep and spend billions of dollars more each year.

TABOR limits state spending to the growth of inflation plus population. This year, spending is capped at about $20 billion. Next year, it's expected to climb to $21 billion.

Proposition NN would raise the spending cap by another $4.6 billion in the first year alone. Any money above the current cap must be refunded to taxpayers.

If the ballot measure passes, lawmakers could keep all money up to the new Proposition NN cap, which would reach about $25 billion next year.

Initially, lawmakers would be limited in how they could spend the money.

For 10 years, the first $200 million would go to reimburse local governments for property tax breaks for seniors.

Half of what's left would go to K-12 education. Schools would receive at least a 2% increase in funding. The other half would go to children's programs to be determined by state lawmakers.

Analysts say schools would receive about $241 million next year if the ballot measure passes — money that otherwise would be refunded to taxpayers.

Schools would have to spend the money on teacher pay and retention, smaller class sizes, career and technical education, or a combination of the three. They would also have to post online how the money was spent.

After 10 years, schools would still receive a 2% increase, but state lawmakers could spend the rest of the money however they want.

The biggest proponent of Proposition NN is the Colorado Education Association, the state's largest teachers' union.

It says the TABOR spending cap has resulted in Colorado underfunding schools, even when the state has plenty of tax revenue.

The Census Bureau's 2024 Survey of School System Finances ranks Colorado 26th in school funding.

The teachers union says the state also has the worst teacher pay gap in the country and that Proposition NN would help close it.

Opponents say there's no guarantee teacher pay will increase, noting that it's just one of the spending options available to school districts. They say Colorado needs to prioritize the money it already has.

The state budget has grown 72% over the last 10 years, from $27 billion to $47 billion.

Education funding has grown 60% over the same period, from $6.2 billion to $10 billion, even as enrollment has dropped.

Proposition NN is statutory, so it needs a simple majority to pass and, once it becomes law, could be amended by the Legislature.

It's one of two ballot measures this year that would direct billions of dollars more to K-12 education. Amendment 87 would increase taxes by up to $2.7 billion a year for schools, health care, and child care.