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.

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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.