Nov 13

Will Colorado Taxpayers Actually Receive a Marijuana Refund?

Source: http://www.fcgov.com/

In case you haven’t heard already, Colorado has been making a killing off of legal marijuana. The substance — which we’ve come to know by many names like reefer, pot, bud, herb, and gonja just to name a few — has brought in millions for the Rocky Mountain state. Colorado’s marijuana tax revenue data was just released for the month of September.

Looking at this tax data, it appears as though the trend-setting state didn’t sell as much retail marijuana as it did during the month prior. But, in spite of the sales slowdown, the state is still earning enough cash from marijuana to have its citizens profit. Under the Taxpayer Bill of Rights (TABOR), Colorado citizens may even receive a ‘refund’ because marijuana revenues were higher than anticipated.

September’s taxes and revenue

During September, Colorado brought in $2.94 million from sales taxes on recreational marijuana alone. Considering a 10% tax rate, this means sales during the month of September were just under $30 million, which is a cool $3 million less than during the month of August when the state brought in $3.31 million in recreational marijuana sales tax revenue.

On top of this cash, Colorado is still earning huge tax dollars from medical marijuana sales taxes (at 2.9%) which have brought the state over $900,000 during the month of September alone. It also earns money from the additional 2.9% tax it imposes on retail pot, and the 15% excise tax that’s imposed on suppliers, manufacturers, etc.

What is TABOR and is it unique to Colorado?

The TABOR is designed to be a kind of like a system of checks and balances. In Colorado, the TABOR limits the amount of revenue growth to the sum of the state’s population growth plus any increase in the rate of inflation. This means that if the population were to grow by 2% and inflation were to grow by 2%, available state revenue can increase by no more than 4%, unless voters approve an increase.

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According to the Colorado Department of Revenue, “Under TABOR, state and local governments cannot raise tax rates without voter approval and cannot spend revenues collected under existing tax rates if revenues grow faster than the rate of inflation and population growth, without voter approval.”

Other states have brought similar TABOR legislation to the table in the past, but Colorado is the only state that actually has such a policy in action.

Nov 13

Colorado Taxpayers In Line To Receive Refund

Two tax refunds possible in Colorado. 9NEWS at 5 p.m. 11/12/14.

NVER—Colorado taxpayers could be in for a pair of refunds from the state, depending on how lawmakers decide to handle two issues caused by the state’s taxpayer bill of rights (TABOR).

That larger of the two refunds would be because of tax revenue forecast to come in $136.6 million more than the limit set by TABOR next fiscal year, which would amount to $41.80 per adult in Colorado, using population figures from the US Census Bureau.

A smaller refund is expected to be triggered in this current year’s budget, tied to legal marijuana sales.

The state may have to refund most of the marijuana taxes it collected in the first full fiscal year of legal sales or recreational pot, an estimated $30.5 million.

That refund would amount to $7.63 per adult in Colorado.

Don’t go making plans to spend your refund just yet.

Lawmakers can always ask voters to let the state keep that money.

While Gov. John Hickenlooper (D-Colorado) has not publicly stated what he thinks the legislature should do about the refunds, there are signs that lawmakers may ask you to at least part with your marijuana refund.

MARIJUANA TAX

A refund on marijuana taxes would not happen because pot sales brought in more money than expected to state government.

In fact, the taxes raised less money than the state predicted.

However, because the state’s official voter guide for Proposition AA in 2013 underestimated the total overall tax collections that would be made by Colorado in 2014-15, TABOR requires the new tax to be refunded, a requirement only imposed in the first full fiscal year of a new tax.

“Because of a quirk in the TABOR amendment, we may have to refund all of the first year’s [marijuana] taxes,” said Sen. Pat Steadman, a Democrat who sits on the joint budget committee. “I’m pretty clear that that’s not what voters had in mind.”

Lawmakers do have the option of asking voters to allow the state to keep the money in excess of what TABOR allows.

While Republicans generally favor refunds in these cases, they may be inclined to make an exception this time because the voters directly approved the new taxes on pot.

“I think that was probably the intent of the voters,” said Sen. Kent Lambert, the Republican chairman of the budget committee. “I think that’s probably the way we’ll end up, probably going to the ballot, but I think that’s going to be a decision of the whole general assembly.”

TABOR LIMIT

The larger of the two refunds exposes the broader philosophical differences between Democrats and Republicans about taxation and the role of government.

This refund would be triggered purely by a healing economy, not an entanglement with a new voter-enacted tax.

Most Republicans are happy to cut you your check, in keeping with the spirit of TABOR.

“This is the taxpayer’s money,” Lambert told 9NEWS. “We have some limitations on the growth of government through the taxpayer’s bill of rights that I think most people in my caucus respect.”

Conversely, most Democrats would rather ask voters to let the state keep the money.

They’d prefer to use this money to pay for improvements to highways and bridges, or beef up school funding to pre-recession levels.

“Before we start making refunds to people we ought to ask should we fix the roof on the barn in the good year instead of just giving it all away,” Steadman said.

Now that Republicans control the state Senate, they are in the stronger position. If they don’t cut a deal, the refunds will happen automatically.

Lambert floated a more ambitious idea: lower tax rates to avoid triggering the refund.

With Democrats still holding a House majority, that’s an idea that’s unlikely to be enacted, though there could be support for tax credits that could reduce the overall size of any refund.

If a refund does move forward, lawmakers do have sway over how the money is distributed to taxpayers. People at different income levels could receive different amounts.

(KUSA-TV © 2014 Multimedia Holdings Corporation)

http://www.9news.com/story/news/local/2014/11/12/two-tax-refunds-possible-in-colorado/18942877/

Nov 09

Look to Ref C’s success for Colorado’s fiscal future

 

Editorials

Look to Ref C’s success for Colorado’s fiscal future

By The Denver Post Editorial Board

The late state  Sen.  Ken Gordon carries a sign at the Colorado Capitol showing his support for Referendums C and D  in September 2005. Voters passed the

The late state Sen. Ken Gordon carries a sign at the Colorado Capitol showing his support for Referendums C and D in September 2005. Voters passed the measure in November of that year. (Karl Gehring, Denver Post file)

The cyclically punitive nature of the Taxpayer’s Bill of Rights has put Colorado in a bind more than once.

Just last week, revenue estimates showed the state will exceed TABOR revenue caps in 2015-16 by $137 million and will have to issue refunds, which will mostly go to low-income residents as tax credits.

The “excess” is supposed to continue through 2016-17, and perhaps longer, with an additional $239 million forecast to be collected and refunded.

Yet, the state faces significant needs in education and transportation as it emerges from a recession and tries to recover from budget cuts.

And that is the bitter reality of TABOR, as true today as it was a decade ago: Its restraints hamper the state’s ability to have its budget rebound from a recession.

Now that elections are behind us, it’s time for state leaders to replicate the bipartisan will mustered in 2005 to craft a timeout from constitutional spending caps and put a measure before voters.

Referendum C was the product of intense negotiations between then-Gov. Bill Owens, a Republican, and the legislature, which was controlled by Democrats. It wasn’t easy to come to agreement on all the finer points, particularly when it came to the sunset provision of Ref C, which asked voters to let the state keep revenues above the TABOR cap.

But by the end of the 2005 legislative session, lawmakers and the governor had agreed on a plan — and after a hard-fought campaign, voters were persuaded to approve it as well.

Ref C is the template that should be followed today.

This would not be a “tax increase” any more than Ref C was, despite what critics will undoubtedly charge.

The measure would simply ask voters whether the state could keep revenues above the TABOR limit that it is already collecting.

Of course, passage of such a measure would end the prospect of refunds, but we think — we hope — voters would understand the need for fresh revenues to backfill recession-era cuts to K-12 funding.

And it should also be evident, given the recent hullabaloo over how the state has had to resort to private companies to help pay for major transportation projects such as U.S. 36, that highway funding is in seriously short supply.

Coloradans, to their credit, are pragmatists when it comes to government spending. The Ref C model, in which a broad coalition pitched specific spending needs, appealed to that sensible nature once and should be pursued again.

To send a letter to the editor about this article, submit online or check out our guidelines for how to submit by e-mail or mail.

 

http://www.denverpost.com/editorials/ci_26892088/look-ref-cs-success-colorados-fiscal-future

Nov 09

Colorado Residents Looking at Pot Tax Rebate

Colorado-Residents-Looking-at-Pot-Tax-Rebate-650x434Last Monday, Colorado Gov. John Hickenlooper unveiled the state’s $26.8 billion proposed budget for next fiscal year. The budget includes $167.2 million in tax rebates for Colorado taxpayers, including $30.5 million in rebates due to total state revenue that was higher than predicted. Under the Colorado Taxpayer’s Bill of Rights (TABOR) the state must either refund the excess amount above the estimate,or add a measure to a future ballot asking the voters to let the state keep and spend the surplus.

The rebates are mandated by TABOR, because the revenue from marijuana sales is different than projections included in the election book for the 2013 Proposition AA. Under TABOR, since the estimate was off, the state has to either refund the excess cash or go to voters to ask if the state can keep it.

The budget proposal was announced one day before the Nov. 4 election that gave Hickenlooper another term. The spending plan includes a 7 percent increase from the current year’s budget, representing $1.7 billion in new spending of state and federal money. $908 million in state spending includes $107 million in additional funds for higher education, $103 million for road projects and a 2 percent pay hike for many state employees.

Colorado’s economy is improving, but much of the new money is due to tax collections exceeding the state’s revenue cap, triggering rebates under TABOR for the first time in 15 years. The provision requires refunds if the revenue is greater than the rate of population growth and inflation. Unless, that is, the voters decide to return the money.

Hickenlooper’s budget directs $167.2 million of the TABOR rebate for fiscal year 2015-16 toward a tax credit for low income workers, along with sales tax refunds. He did not address exactly how to rebate the $30.5 million portion for recreational pot taxes, that decision being left to state lawmakers.

The rebate issue became a campaign issue last month when the governor was noncommittal on whether he would endorse a tax rebate, or if he would ask voters for permission to spend it. At a gubernatorial debate Oct. 24 he did commit to a rebate.

Vice Chairman of the Joint Budget Committee Sen. Pat Steadman said the overage is not happening because the taxes are exceeding the estimates, but rather because the economy is growing. Hickenlooper stated that “Colorado’s economic activity continues to outperform the national expansion,” and said looking ahead, the most likely scenario is for that momentum to continue.

Lawmakers have the option to lower excise and sales tax rates on recreational pot to bring the revenue in line with projections, but that would most likely impact $40 in annual excise tax revenue that has been allocated to school construction. Rep. Cheri Gerou, a member of the Joint Budget Committee, said lowering the sales tax rate would mean the state could not take care of K-12 education under BEST, the Building Excellent Schools Today program.

So much of the marijuana revenue is allocated for school construction and reimbursing counties for regulation expenses that it is possible that the cannabis refund would have to come out of the state’s general fund. It is uncertain how the pot tax rebate will be handled, whether it will go to all Colorado taxpayers or only to those who bought recreational marijuana. Gerou said that despite the higher-than-projected revenue, legalized recreational marijuana could actually cost the state money in this first year.

By Beth A. Balen
Read more at http://guardianlv.com/2014/11/colorado-residents-looking-at-pot-tax-rebate/#fgIF8cuuEo3AYXHk.99

 

Nov 07

Support Your TABOR Team

Friends of freedom,

As the TABOR Committee approaches its annual business meeting on Saturday, November 15th, we thought to invite you to join our team.

If you are not currently engaged in an effort to advance liberty, please consider that you could make a difference with one to two hours per week of dedicated volunteering.  You likely would benefit too, perhaps building a resume’, gaining insights unavailable from the sidelines, and fulfilling your interest for successful activism and leadership.

The TABOR Committee and its sister organization, the TABOR Foundation, have been punching far above our weight, including initiating lawsuits against the Bridge Enterprise scheme and against the new RTD and Scientific and Cultural Facilities District taxes.  We filed an amicus brief in the Lobato lawsuit and acted in the federal lawsuit (Kerr vs. Hickenlooper) as the lead amicus in alliance with the NFIB’s national office legal team – the same outfit that filed the lawsuit against ObamaCare which ended with the Roberts’ decision.  (The Kerr lawsuit avers TABOR unconstitutional under the US constitution).  We also have taken tangential roles in the Aspen bag fee lawsuit and the lawsuit pertaining to the TABOR vote on the Gaylord Convention Center.  Our other ongoing volunteer work includes

– development of histories of TABOR campaigns leading to passage,

– producing a TABOR 101 introductory video,

– research and authoring a legal history of the various TABOR decisions over the decades,

– providing articles to the media,

– running a web site,

– presenting a break-out session at the Western Conservative Summit (completed – 2014).

We would like to build on that.  A deeper bench is needed, with more interested people involved so that languishing projects move forward.

My request of you is to become involved in policy & politics to preserve and advance the Taxpayer’s Bill of Rights.  We need more help:

The committee that should be sending out a speaker’s bureau is moribund, because our Outreach Director’s professional life has taken a new direction.  We need a small team with the skills and attitude to schedule the speakers bureau, organize the speakers’ training, coordinate feedback and lessons learned.  If Bell Policy/Colorado Fiscal Institute soon launch a renewed attack on TABOR as expected, we will discover the libertarian/conservative movement is already behind.

We should recruit more support and organizing help in producing the TABOR 101 videos.

A major objective within our mission statement has gone unaddressed – the offer to support other states’ efforts to pass their own TABORs.  We have not followed up adequately on expressions of recent interest from Kansas, Florida and Arizona.  A leader with diplomacy skills and dogged determination would be a wonderful addition.

Citizens in Charge/Paul Jacob has planned to put national attention to TABOR during the coming spring with a series of different activities and a symposium.  We don’t currently have the volunteer time available to support his plan, coordinate and collaborate with him, and to create successful events.

If you are interested, please contact our Executive Director, Bob Foland, at bobfoland@iraspecialists.com or me at constecon@hotmail.com or telephone me at 303-233-7731.

Your response and support will be greatly appreciated.

Thank you,

Penn Pfiffner

Nov 03

Hickenlooper’s budget plan endorses tax rebates, new state spending

 

Gov. John Hickenlooper (Craig F. Walker, Denver Post file photo)

A day before voters decide whether to give him another term, Gov. John Hickenlooper on Monday unveiled a $26.8 billion state budget proposal for the next fiscal year that includes about $200 million in rebates to taxpayers.

The Democrat’s spending plan represents $1.7 billion in new spending in federal and state money, a 7 percent increase from the current fiscal year budget.

The $908 million in new state spending includes $103 million for road projects, $107 million in additional funds for higher education and a 2 percent pay hike for most state employees.

The new money available reflects Colorado’s improving economy but tax collections also exceeded the state’s revenue cap under the Taxpayer’s Bill of Rights — triggering rebates for the first time in 15 years.

Hickenlooper’s budget puts aside $167.2 million for a TABOR rebate in the fiscal year 2015-16 budget, which state law directs toward a tax credit for low-income workers and sales tax refunds.

The constitutional provision mandates refunds when revenue exceeds the rate of inflation and population growth, unless voters decide to return the money.

Hickenlooper sidestepped the question about how to rebate another $30.5 million in excess recreational marijuana taxes, leaving it to state lawmakers to decide the appropriate method.

The TABOR rebate issue became a campaign touch-point a month ago when Hickenlooper wavered on whether he would endorse a tax rebate or ask voters for permission to spend it, but eventually committed to a rebate at an Oct. 24 debate.

The governor’s aides briefed reporters on the budget proposal Monday afternoon while Hickenlooper worked the campaign trail.

In his 28-page letter to lawmakers outlining his plan, Hickenlooper touted the state’s economy. “Colorado’s economic activity continues to outperform the national expansion,” he said.

Republican challenger Bob Beauprez saw the governor’s budget as an opportunity to poke at Hickenlooper about the TABOR rebates, which he firmly supported in the campaign.

“We’re pleased that, thanks to Bob Beauprez’s leadership, John Hickenlooper has suddenly discovered it’s the taxpayers’ money, not his,” campaign spokesman Allen Fuller said in a statement. “Even this election eve 180-degree flip is not enough to erase over a decade of pushing for billions in tax increases.”

The timing of the governor’s budget release only added to the political context, but the date is prescribed in state law. The Joint Budget Committee — a panel of three House and three Senate lawmakers — will meet Nov. 12 to hear Hickenlooper’s plan and begin deliberations.

Other key provisions in the governor’s plan include:

• A total $480 million more for education, including a one-time $200 million infusion from state coffers, to increase per pupil funding to $7,496, a $475 increase.

• Another $155 million to cover an expected 218,000 new Medicaid patients whose cost is not entirely paid by the federal government under the program’s expansion

• More than $8 million for counties to hire 130 new child welfare employees meant to reduce onerous case loads.

• An additional $282 million to finish state constructions projects underway, including money to reduce wait times by upgrading the state’s driver’s license system.

Senate President Morgan Carroll, D-Aurora, said she supports Hickenlooper’s spending priorities. “We are at a turning point with the economic recovery, and we have a lot at stake with this next budget,” she said in a statement.

What happens Election Day will influence the budget plan’s direction. Democrats now control both chambers and hold a 4-to-2 advantage on the budget committee.

The state House is likely to remain in Democratic hands, but Republicans are vying for control of the state Senate. If Republicans win the Senate majority, the budget committee will split the political parties 3 to 3.

If Beauprez wins, he will get the opportunity to submit his own budget proposal early next year.

John Frank: 303-954-2409, jfrank@denverpost.com or twitter.com/ByJohnFrank

http://www.denverpost.com/news/ci_26856988/hickenloopers-budget-plan-endorses-tax-rebates-new-state

Nov 01

Colorado Taxpayers May See First TABOR Refunds in 15 Years

By Jackson Brainerd

As Colorado’s economy rebounds in the aftermath of the Great Recession, taxpayers may receive a tax refund courtesy of the state’s Taxpayer’s Bill of Rights (TABOR).

TABOR, the nation’s most stringent tax and expenditure limitation, mandates refunds when revenue exceeds the rate of inflation plus population growth, unless voters decide to let the state keep the money.For the first time in 15 years, Colorado’s tax collections are expected to exceed TABOR’s revenue cap. Lawmakers are in a quandary over whether to return the money to taxpayers, or ask their permission to keep it.  Since its implementation in 1992, the state has refunded more than $2 billion to taxpayers.  Voters have chosen to forgo refunds before, however, most notably when they approved Referendum C in 2005 to raise the state’s revenue limit in the midst of a difficult budget climate due to TABOR limitations.

Governor John Hickenlooper, who will submit his proposed budget to the legislature on Nov. 3, has not yet indicated if he will recommend a tax refund, or let voters decide through a referendum. If the surplus is refunded, the Colorado Legislative Council has estimated that lawmakers will need to set aside $125.1 million for fiscal year (FY) 2017 and $392.6 million for FY 2018.

In FY 2017, the refund would come in the form of an earned income tax credit and sales tax refund estimated at $11 per taxpayer. The next year, it would come as a temporary income tax rate reduction from 4.63 percent to 4.5 percent and a six-tier sales tax refund would also become available.

Embroiled in this discussion is the fate of $30.5 million of marijuana tax revenue. Even though voters already approved this money for education spending in 2013 via Proposition AA, it could be returned to them in the likely event that state fiscal year spending  exceeds the 2013 Blue Book estimate for FY 2015.

A TABOR provision regarding new taxes requires a full refund in such cases (though state legislators may be frustrated by the absence of statutory guidelines regarding how these excess tax dollars should find their way back to taxpayers). Should this occur, lawmakers will either have to dip into the General Fund to compensate for the lost education money, or Colorado’s school system will have to go without.

The silver lining surrounding this issue is that Colorado’s economy is growing. While many in the state would like to take this opportunity to rebuild programs that received years of cuts during the recession, others would prefer to see the TABOR refunds carried out.

Jackson Brainerd is a research analyst in NCSL’s Fiscal Affairs Program.

http://www.ncsl.org/blog/2014/10/30/colorado-taxpayers-may-see-first-tabor-refunds-in-15-years.aspx

Oct 28

Colorado Goes to the Supreme Court to Defend TABOR

Three years ago, a group of primarily government plaintiffs sued in federal district court to void Colorado’s Taxpayers Bill of Rights (TABOR). TABOR allows the people, not just the legislature, to vote on most tax increases, most debt increases, and some spending hikes.

http://blog.tenthamendmentcenter.com/2014/10/colorado-goes-to-the-supreme-court-to-defend-tabor/

Oct 27

Petitioner’s Supplemental Appendix To The Petition For Writ Of Certiorari

Plaintiff seeks enforcement of the Taxpayer’s Bill of Rights of the Colorado
Constitution (“TABOR”).  TABOR requires a vote of the people
before the State or any local government may: create new debt, levy new taxes, increase tax
rates, or institute tax policy changes directly causing a net tax revenue gain. Id. Without a vote
of the people, the Colorado Bridge Enterprise has created new debt, levied new taxes, increased
tax rates, and instituted tax policy changes causing a net tax revenue gain to the Colorado
Department of Transportation and the Bridge Enterprise. By taking these actions without a vote
of the people, Defendants have violated the rights of Plaintiff’s members to vote on the
imposition of new taxes and debt, as guaranteed by TABOR. Plaintiff therefore seeks
declaratory and injunctive relief to abate and correct Defendants’ unconstitutional actions.

 

Supplemental Appendix Final