8:00 p.m.: Amendment 66, the $950 million tax hike attached to school finance reform, went down to defeat Tuesday night.

With almost half of the statewide votes counted, it trailed by a substantial margin, 66 percent to 34 percent.

“We congratulate Coloradans for having the common sense to reject this unnecessary and unjustified tax grab,” said Dustin Zvonek, the Colorado state director for Americans For Prosperity, which opposed the measure. “Passing Amendment 66 would have gravely wounded the state’s economy and business climate, while rewarding a reform-resistant education system with an un-earned windfall.”

7:40 p.m.: Rejection of Amendment 66 continued to hold strong with 42 percent of the statewide vote counted, as no votes held a 63-37 percent lead with over 600,000 votes cast.

* * *

7:30 p.m.: With 34 percent of the statewide vote in, voters were giving a thumbs-down to Amendment 66 by a 62-38 percent margin.

* * *

7:11p.m.: Voters in El Paso and Jefferson counties were rejecting Amendment 66 by wide margins in early returns Tuesday night, while Denver, where the measure would have significant positive impact on the district, showed only a slim, 186-vote lead for the tax hike and school finance overhaul.

El Paso County was saying no to 66 by a 75-25 percent margin, while Jeffco came down 67-33 percent against.

* * *

As clerks tallied the last wave of ballots Tuesday, voters waited to hear the fate of a proposed tax increase that, if approved, would pump nearly a billion dollars into Colorado K-12 education, reconfigure the state income tax and trigger sweeping change in school finance.

Amendment 66, the big-ticket item of this election cycle, would inject $950 million of new money into K-12 education by changing the state income tax from a flat rate of 4.63 percent to a two-tiered arrangement. The first $75,000 of taxable income would be taxed at 5 percent and everything above that threshold at 5.9 percent.

The new revenue stream would be channeled to several areas, including preschool, full-day kindergarten, additional support for English language learners and locally determined innovations like longer school days and years.

It also would provide greater funding for charter schools and help support previously passed reforms such as the educator effectiveness framework that went into effect this school year.

The whole package promised financial transparency through a website that would track spending.

The amendment offered the first major overhaul to school finance in nearly two decades, crafted over more than two years by a consortium of interests and carried into the political arena primarily by Sen. Mike Johnston, the Denver Democrat who had earlier success achieving bipartisan education reform.

The new system would seek greater equity in state funding for lower-income districts by resetting state and local shares based on factors like median income.

It also would shift the level of overall state funding from an annual increase tied to inflation to a requirement that 43 percent of the general fund go to K-12 education.

Gov. John Hickenlooper invested considerable political capital to support Amendment 66, whose passage he said would constitute “the most comprehensive education-reform initiative in the history of the United States.”

Critics seized on what they called insufficient reform and accountability as well as the inequity of a tiered tax structure and its implementation while the Colorado economy remains fragile amid a slow recovery from the recession.

Backers amassed a huge war chest to convince voters that a tax hike to bolster education constituted a worthwhile investment.

But this effort proved a formidable challenge.

Johnston’s Senate Bill 213, which reconfigured the way the state would distribute education dollars to its 178 districts, made its way through the legislature on party-line votes. Although many Republicans found something to like in the rewrite of the School Finance Act — a rolling student count day and more robust funding for charter schools chief among them — the bill didn’t receive a single Republican vote.

Although it passed and was signed by the governor, SB 213 would go into effect only if voters approved the accompanying tax increase.

There was relatively little organized opposition, but election watchers predicted that proponents faced the uphill battle in making their case for such a sweeping — and expensive — change. The last proposed statewide tax increase for education, Proposition 103 in 2011, lost by a large margin.

Business interests were split on Amendment 66 and some organizations, like the Denver Metro Chamber of Commerce, simply chose to remain on the sidelines during the campaign.

The South Denver Metro Chamber of Commerce opposed the measure in large part because of the two-tiered tax structure it labeled as bad for business. The Hispanic Chamber of Commerce of Metro Denver backed Amendment 66 as a wise investment in the state’s future.

The race attracted national attention, including support from U.S. Secretary of Education Arne Duncan, who said passage of the amendment would make Colorado an “educational model.” Both the New York Times and Wall Street Journal weighed in with op-ed pieces pro and con, respectively.

National money also entered the campaign in a big way. Supporters have collected more than $10 million in donations, according to the last campaign finance report, with millions coming from the National Education Association and late donations from New York Mayor Michael Bloomberg and philanthropists Bill and Melinda Gates.

Final reports won’t be out until Dec. 5.

That money gave proponents a huge edge in spending on television advertising. Opponents relied on a much smaller TV presence financed by an arm of the Independence Institute, which raised about $734,000 for “educational outreach.” Critics also tried to derail the measure with an ultimately unsuccessful court challenge of the signatures that placed the initiative on the ballot.

But experts noted that opponents would have an easier job selling their message — especially in a still-recovering economy. Some voters also faced local mill levy increases on the same ballot.

Kevin Simpson: 303-954-1739, ksimpson@denverpost.com or twitter.com/ksimpsondp