Colorado lawmakers begin a mad dash to the finish next week with more than a dozen significant bills in limbo and the session’s clock set to expire.
The final flurry before the May 6 adjournment is typical each session, but this year it is complicated by a divided legislature seeking elusive common ground on a wide range of issues and a series of late bills with huge implications.
The new bills include a repeal of the sales tax on soft drinks, a new$3.5 billion transportation bonds package, two resolutions to cut the length of the legislative session, an opt-out for mail ballots, the renewal of a state consumer watchdog and a ballot measure on how to spend $58 million of marijuana taxes.
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The 2015 legislative session began with Gov. John Hickenlooper touting the state’s economic successes. It may end with him lamenting the economic problems that couldn’t be solved.
Last week, the governor sent lawmakers a letter, suggesting how they could resolve contradictory fiscal laws that limit the state’s ability to fund certain infrastructure priorities.
The problems? Not enough money for transportation projects, especially repairs to roads and bridges, with an estimated cost of $3.5 billion. And K-12 education is still almost $1 billion short of its Amendment 23-required levels. At the same time, the state is poised to start sending hundreds of millions of dollars back to residents through refunds required by the Taxpayer’s Bill of Rights (TABOR).
In the letter, the governor laid the blame on two laws from 2009. On the revenue side is the hospital provider fee, which the governor criticizes for pushing state revenue above TABOR limits and forcing refunds. The fee is expected to bring in $532.3 million in this fiscal year. In 2015-16, that grows to $688.5 million, according to Hickenlooper’s letter.
The fee counts as cash fund revenue under TABOR, and wasn’t anticipated when revenue caps were set in 2007-08.
Gov. John Hickenlooper pitched a fix Thursday to what some call Colorado’s “fiscal thicket,” a complex network of Constitutional Amendments – most notably the Taxpayer’s Bill of Rights – and state laws that dictate how state government spends taxpayer dollars.
The plan – spelled out in a four-page letter to Democrat and Republican leaders in the General Assembly – hinges on the state keeping an estimated $316.6 million in fiscal year 2016-17 instead of paying it back to taxpayers through a TABOR refund.
That money would instead go to (and yes, this adds up to more than $316.6 million): $215 million for transportation projects, $50 million for common education; $20 million to repay local governments for the impact of oil and gas operations; and $75 million to pay back money borrowed from the Medicaid expansion and increased hospital provider fees.
Under the plan, lower income taxpayers could have their cake and eat it, too. They would receive a share of $85 million in a new state Earned Income Tax Credit.
Henry Sobanet, director of the Governor’s Office of State Planning and Budgeting, said there is enough time remaining this session to address an important question for future budgets.
“Are we sure that the structure we have is providing the resources that all the aspects of the state’s priorities need?” Sobanet asked. “This idea, these conversations have been kind of back and forth for many months, and so we felt it was a good time to try and see if there was some common ground around a vision for transportation, a vision for rebates, a vision for some extra resources for K-12 education.”
Under the plan, voters wouldn’t be asked for permission for the state to keep the increased revenue, a key tenet of TABOR. Continue reading
State Sen. Pat Steadman, D-Denver, readily admits that he is not a fan of Colorado’s Taxpayer’s Bill of Rights (TABOR), a constitutional amendment restricting the spending of state tax revenues. In these last few weeks of the session’s duration, he will be introducing a bill in the Senate to allow the state to retain the revenues from marijuana tax income.
In an interview with Catherine Strode, Sen. Steadman says his bill will ask Coloradans to forego their TABOR tax refunds in order to put the Marijuana Tax income to good use across the state.
CS: Why are you bringing this bill?
PS: Voters legalized marijuana and said they wanted it taxed and regulated. Voters passed the Prop AA Marijuana Taxes but TABOR is making them vote twice. Otherwise, the entire first year collection will be lost to a TABOR refund. My bill gives voters the opportunity to reaffirm their desire to have marijuana taxed and to have those revenues put to good use.
CS: Is TABOR going away?
PS: As much as I would love to see TABOR go away, I don’t think that’s going to happen any time soon. We’re still learning lessons. Look at the marijuana tax/TABOR problem this year, a brand new TABOR problem we never saw before. When will TABOR quit turning around and biting us on the behind? Hopefully, soon. But don’t be surprised when it happens again. If you look at the first 22 years of life under TABOR, most of the things the legislature has done to adjust to the TABOR Amendment, have been kicking the can down the road. Referendum C kicked the can down the road for five years. Some of the things that were done early on, in terms of creating enterprises for unemployment, or enterprises for higher education tuition, were ways to kick the can down the road. You might describe them as slowly chipping away at TABOR’s restrictions but most of those restrictions are still with us. Most of what you see us doing in the budget, or, this talk about the Hospital Provider Fee becoming an enterprise, are all ways for the legislature to kick the can down the road so we can live under TABOR a little bit longer. I think that’s going to be our ‘MO’ going forward. Small accommodations, chipping away in very surgical, discreet, little ways, doing what we can to live under the restrictions of TABOR. I don’t see anyone with the political fortitude leading the charge to take something to the voters to fix it.
CS: How is Medicaid expansion affecting the budget?
In the most significant move so far in his second term, the Democrat is seeking to ease what he calls Colorado’s “fiscal thicket,” a mess of spending and taxing laws that often conflict and limit spending on priority areas, such as education and transportation.
“Colorado has great needs and extraordinary budgetary constraints,” Hickenlooper wrote to lawmakers in a four-page letter. This proposal “provides some measure of simplification of the rules we have and strikes a balance between limiting our revenue and addressing the needs of a growing state.”
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Governor Hick’s budget problems caused by his reckless Medicaid expansion and corporate welfare.
Dave Kopel on Colorado Public TV
Published on Apr 17, 2015
Governor Hickenloopers recent letter sent to lawmakers urging them to change how Colorado collects revenue and offers refunds to taxpayers is the topic of discussion.
The Opinion Pages | EDITORIAL
The Glitch in Colorado’s Weed Experiment
By THE EDITORIAL BOARD APRIL 6, 2015
A marijuana dispensary in Boulder, Colo. Credit Matthew Staver for The New York Times
After Colorado voters legalized marijuana, they also approved heavily taxing it and using the money for school construction, law enforcement, drug education and other useful things. The arrangement made perfect sense.
But now the 15-month-old experiment has entered a phase that makes no sense at all. It’s the prospect that all this new marijuana revenue — an estimated $58 million in the current fiscal year — may have to be returned to the voters, because of a provision in the state’s Constitution that rigidly constrains taxes and spending. The provision is the Taxpayer’s Bill of Rights, or Tabor, a complex set of rules that requires, among other things, voter approval of all new taxes and automatic refunds if tax revenues or spending exceed estimates given when tax questions are put to the voters.
As an April 1 report in The Times explained, Colorado’s tax revenues have recently surged, thanks in part to the booming construction, oil and gas industries, in addition to some $58 million from the marijuana taxes. But not only revenues but overall state spending this year are expected to end up higher than the state estimated back when the marijuana tax was on the ballot. Under Tabor — which some in Colorado have likened to a fiscal straitjacket or a statutory version of the crazed space computer HAL 9000 — the state is therefore required to refund the marijuana money. Continue reading
West Slope lawmakers talk TABOR, water at Club 20
Thurlow chimes in on effort to recall him: ‘That’s their right’
By Ron Bain
THE COLORADO STATESMAN
GRAND JUNCTION — A panel of seven Western Slope legislators — six Republicans and one Democrat — discussed diverse issues they’re working on in the state legislature at the Club 20 annual meeting on March 28, focusing on water, energy, the economy, TABOR and federal lands.
Sen. Randy Baumgardner, R-Hot Sulphur Springs, said he and Sen. Jerry Sonnenberg, R-Sterling, had introduced a bill, SB 15-232, that would create a Federal Land Management Commission to study the transfer of federally managed public lands to Colorado. But that doesn’t mean the lands would be sold to the highest bidder, he added.
“I know there’s a lot of people running around with their hair on fire, afraid that we’re going to sell the lands, but that’s not what the bill is all about,” Baumgardner said.
Rep. Don Coram, R-Montrose, who also attended the panel discussion, is the House sponsor for the land transfer study bill.
During a discussion of conflicting constitutional amendments, Sen. Ellen Roberts, R-Durango, confessed that the state legislature has been making end runs around the Taxpayer’s Bill of Rights.
“We did not follow the Constitution,” Roberts said. “We made up something called the ‘negative factor’. There are budgetary tricks.”
Amendment 23, which mandates yearly increases in K-12 education funding, is in conflict with TABOR, which restricts the growth of government revenues, a dilemma that several of the legislators complained about. Club 20 member Chris Treese asked the panel to discuss that conflict.
Sen. Kerry Donovan, D-Aspen, said she was extremely frustrated by TABOR. Continue reading