Apr 18

Steadman: Bill will provide marijuana, TABOR fix

The Colorado Statesman

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.

Sen. Pat Steadman

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?

Continue reading

Apr 18

Gov. Hickenlooper asks lawmakers to overhaul state spending, TABOR refunds

Colorado Gov. John Hickenlooper. (Helen H. Richardson, Denver Post file)

The Spot Blog

Politics & Policy - The Spot BlogGov. John Hickenlooper on Thursday asked a divided legislature for a major overhaul in how the state spends money, outlining a plan that would shift taxpayer refunds in the next two years toward middle-income earners but eliminate the largest tax breaks expected in 2018.

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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Apr 17

Hickenlooper asks for budgetary move to ensure Colorado roads funding

Gov. John Hickenlooper on Thursday asked leaders in the Legislature to back a plan that would ensure years of increased funding for transportation and K-12 education in exchange for lowering the amounts of refunds going back to Colorado residents under the state constitution’s Taxpayer’s Bill of Rights.

In a letter, Hickenlooper endorsed a five-point plan that involves removing the six-year-old hospital provider fee and the nearly $600 million in revenues it brings in annually from the general-fund portion of the budget, a move that would reduce revenue that is considered to be under the state’s TABOR cap.

Bringing that revenue below cap levels would trigger full transfers of transportation funding — more than $200 million a year for the next four years — under a complex 2009 bill that tied that funding to personal-income growth and the amount the state budget could stay under the TABOR cap.

Business leaders have pushed the idea of relocating the hospital provider fee for months in an effort to get desperately needed money for the state’s aging and overcrowded roads, which have not received general-fund repair money since the 2007-08 fiscal year.

The move would not affect the amount of money generated for hospitals. Continue reading

Apr 07

The Glitch in Colorado’s Weed Experiment

The Opinion Pages | EDITORIAL

The Glitch in Colorado’s Weed Experiment


boulder marijuana shop

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

Apr 01

Colorado Lawmakers Scramble to Keep Millions in Marijuana Taxes

Robert Grandt worked in the grow room at 3D Cannabis Center in Denver last month. Hefty taxes on recreational marijuana have generated millions in state revenue. Credit RJ Sangosti/The Denver Post, via Getty Images

A year after Colorado became the first state to allow recreational marijuana sales, millions of tax dollars are rolling in, dedicated to funding school construction, marijuana education campaigns and armies of marijuana inspectors and regulators. But a legal snarl may force the state to hand that money back to marijuana consumers, growers and the public — and lawmakers do not want to.

The problem is a strict anti-spending provision in the state Constitution that touches every corner of public life, like school funding, state health care, local libraries and road repairs. Technical tripwires in that voter-approved provision, known as the Taxpayer’s Bill of Rights, may require Colorado to refund nearly $60 million in marijuana taxes.

Continue reading

Mar 28

TABOR refund likely to go to voters

By Marianne Goodland

The Colorado Statesman

Budget writers this week finished their work on the annual state budget and turned their attention to what to do about a $58 million projected TABOR refund.

Sen. Pat Steadman, D-Denver, took the lead on coming up with a proposal for the Joint Budget Committee on Wednesday.

The $58 million refund was triggered by tax revenue received by the state through excise and sales taxes on marijuana, and which pushed the state over its allowable TABOR revenue cap.

The $58 million is made up of two different funds: $27.7 million from marijuana taxes, and $30.3 million the JBC had to take from general funds to cover expenditures already made on certain marijuana programs like prevention and education. Steadman explained Wednesday that the $30.3 million was spent before the state (and JBC) knew they would have a TABOR refund situation. So they had to replace that money with general fund dollars.

Steadman’s proposal won’t go into final drafts until after the General Assembly finishes work on the Long Appropriations Bill.

The major part of the proposal is a referred measure to the voters for this November, asking if the state can keep the money. Steadman proposed that $40 million of the total go to BEST, the school construction fund that was to be covered with marijuana revenues.

Steadman explained that to date, only about $25 million has gone to that fund, although in both Amendment 64 and Proposition AA (passed by voters in 2013) the state pledged at least $40 million to public school capital construction. Tax revenues from marijuana haven’t lived up to what was billed; Prop AA asked voters to allow up to a cap of $70 million per year. However, the most recent revenue forecast from Legislative Council economists explained that the amount of the refund would be capped at the total amount of taxes collected.

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Mar 27

Could Colorado’s hospital provider fee be the key to increased road funding?

Reporter-Denver Business Journal

Some Denver business leaders are pushing a state budget fix that would ensure a boost in transportation funding and could help to increase education spending simply by moving the six-year-old hospital provider fee out of the general fund into what is know as “enterprise fund” status.

However, with the Colorado Legislature’s Joint Budget Committee set to introduce its proposed budget for the 2015-16 fiscal year on Friday, the idea has not gained enough traction yet even to be discussed formally by the committee.

And Democratic and Republican legislative leaders disagree on whether it should be considered, especially since that solution likely would eliminate any Taxpayer’s Bill of Rights (TABOR) refunds to residents statewide in the near future.

However, the same bill says the transfer can be cut in half if TABOR refunds — which are required when state-government revenue grows above a certain cap — are between 1 and 3 percent of the general-fund budget. And they can go away altogether if TABOR refunds exceed 3 percent.

Right now, the TABOR refund is projected to be a little more than 1 percent, which means the $204 million that had been planned for transportation funding would sink to $102 million. Continue reading

Mar 26

RETURN TO OWNER: Tabor Tax Rebates May Be Coming to a Mailbox Near You

Money IIIt has been almost 15 years, but hard-working Colorado taxpayers may be in for a TABOR refund in the near future.  The combination of an improving economy and tax receipts from the state’s nascent marijuana industry have created a surplus that must be refunded to Colorodans under the state constitution, unless a ballot measure calling for the funds to be retained and spent by the government is passed in a statewide vote.

Of course, there will be fierce resistance from Democratic lawmakers to refund a penny of the excess tax payments that was dropped into the states’ coffers.  It was not too long ago that the Speaker of the Colorado House of Representatives, Dickey Lee Hullinghorst,staked out her position on the issue, saying that “the people would be far better off if we invested that…” and went on to marginalize the refund by comparing it to “50 bucks to spend on a tank of gas or something.”

In case Speaker Hullinghorst has not been part of the middle class for a while, $50 is a lot of money to someone not making six figures.

Hullinghorst’s wild guesstimate of the figure is most likely wrong.  According to current estimates, the surplus tax collections will amount to somewhere between $70 million and $220 million during the 2015 fiscal year.  This would result in refunds between $15 – $89 per taxpayer, with lower-income people getting more.  There is also a possibility that some low earners will get an additional $230, according to a Denver Post story.

We have to ask – are Democrats really representing the middle and lower earners as they claim?  If they were, would TABOR refunds even be a question?

As an interesting side note, while TABOR is well-known in Colorado, relatively few states have a similar government spending limit mechanism in their constitutions.  The American Legislative Exchange Council (ALEC) actually has a model bill that is based on Colorado’s TABOR amendment that lawmakers in other states can pick up, make minor changes to, and introduce in their own jurisdictions.  We would bet there are constituents in many states who would appreciate a cap on their legislature’s wanton spending.