Here's a movie of my kid and I making some colored salt...
As you can see, these are pretty easy to make. I know the big name guys like Discount School Supply sell this stuff inexpensively, but really, you can make it yourself and use the money you'd save on some colored butcher rolls. (Always seems like there's never enough of that...)
Home Depot or Lowe's will have sand in different grades (play sand is fine to use but white sand is way better) in giant bags... and generic salt is pretty cheap. If your center has a Sam's account, go ahead and invest in the ginormous bag of salt for a project like this. Better yet, just have parents pick up a 30 cent tub of salt on their next grocery run and bring it in... that way each child has their own.
So, the easiest way to make different colors of salt is to give each child a heavy duty zip locking back (gallon size if you are using a whole tub of salt), pour in the salt and then add a few drops of food coloring. Close the bags and make sure there isn't too much air in there or the bags will bust... Then have the children start smooshing the salt and food coloring together by pressing on the bag, turning it over and over, shaking it a bit. It's pretty fun.
Each child can work on a color and then you can set up a community art station afterward where everyone has access to all the colors.
I've found that for blended colors like purple or orange, the best way to do this is to make one color first and then add the second color later once you've acheived the right "tone" in the first color. You know, yellow first, then add a tiny bit of red and blend until you've got the orange you're seeking.
To make colored sand, just put sand in a bowl (a cup or so) with a teaspoon of powdered tempera and a tiny bit of water (teaspoon to a tablespoon depending on how much sand you are using) and let the kids mix it up with a fork or wisk. Add the water after the sand and tempera have been mixed sufficiently.
When you've reached the desired color, spread the sand out to dry (use cookie sheets, paper towels spread out on the table... I wouldn't use regular towels because the color from the tempera will leech into the fabric). This drying period is one reason I prefer using salt... salt is ready to go right away.
I've used food coloring to make colored sand before, but it takes a lot more of it than when making salt, thus making it not worth the cost... 3 drops of yellow will make a cup of salt a nice pastel shade, but it takes maybe 15 or more on sand. If you're working with a whole classroom of kids, that adds up.
Also, a caution when using salt with toddlers... they like to eat it and lick their fingers, so sand might be better. Too much salt is toxic. They might lick the sand once, but few of them are going to keep eating that after one try. :)