Oct 11

YES: It’s what voters wanted

Employee Nikki Desiderio explains different marijuana products to customers at the Helping Hand recreational marijuana store in Boulder. (Jeremy Papasso,Employee Nikki Desiderio explains different marijuana products to customers at the Helping Hand recreational marijuana store in Boulder. (Jeremy Papasso, Daily Camera)

Opinion

YES: It’s what voters wanted

Proposition BB, the only statewide issue in Colorado’s elections this November, asks voters to “allow the state to retain and spend $66.1 million, which has already been collected, rather than refund it to taxpayers.”

Supporters of limited and cost-effective government understand the importance of reminding politicians and bureaucrats whose money they’re spending. Refunds of tax revenue are perhaps the single most-effective way of doing so. However, Proposition BB relates specifically to the refund of excise and sales taxes on marijuana, taxes approved by Colorado voters in 2013 through Proposition AA as required by the 2012 passage of Amendment 64, which legalized recreational marijuana in Colorado.

If BB were to fail, the functional impact would be for the state not to have collected any of the voter-approved 15 percent state excise tax or 10 percent state sales tax on retail (non-medical) marijuana sales.

Two key points, as explained by the Legislative Council staff:

To continue reading this story, click this link: http://www.denverpost.com/opinion/ci_28945795/yes-its-what-voters-wanted

 

Oct 06

TABOR plans for years of taxpayer refunds

TABOR plans for years of taxpayer refunds

Under the 1992 voter-approved constitutional amendment known as the Taxpayer’s Bill of Rights, state and local governments are limited on how much they can grow their budgets.

Under the amendment, those year-over-year budget growths are based on a complicated formula subject to population growth and inflation.

Tax revenues that exceed that cap must be refunded to taxpayers, and that’s done depending on just how much revenue has exceeded the limit.

State economists say revenues from last year’s fiscal year, which ended June 30, resulted in a surplus of about $153.6 million. That means taxpayers will see a refund when they file their income tax returns next year, which is expected to average between $15 and $20 for individual filers.

Projections for the next two fiscal years are expected to be even higher: $252.5 million for the current fiscal year, which would be refunded with 2017 tax returns, and $352 million for the year after that.

If the hospital provider fee idea is approved during the next legislative session, which begins in January, it would eliminate the 2017 and 2018 refunds, but not the one planned for next year.

The fee, which is used to fund expanded Medicaid coverage, is collected from hospitals. But because it is counted as revenue for the state, it puts the state in a situation where the TABOR revenue cap is exceeded, triggering a mandatory refund. And that has the effect of cutting into funding for other state services, such as transportation and education.

Source: Colorado Legislative Council

http://www.gjsentinel.com/news/articles/tabor-plans-for-years-of-taxpayer-refunds

Oct 06

Lawmakers struggle with the politics of state’s budget

Lawmakers struggle with the politics of state’s budget

Health care advocates like it. So do crusaders of more funding for transportation and education.

Some Colorado lawmakers believe they can fix the state’s most immediate budget issues to meet those needs by making what, on the surface, appears to be an innocuous change in how the state accounts for a fee on hospitals to fund health programs for the poor.

What they want is to take that charge — called the hospital provider fee — out from under the revenue caps mandated by the Taxpayer’s Bill of Rights and call that program a standalone government enterprise, something allowed for under the 1992 voter-approved constitutional amendment that limits how much money the state can collect.

Doing so isn’t as easy as all that, however, because it would negate any TABOR refunds for years to come, turning the issue into more of a political question than one of policy.

REFUND, OR NO REFUND?

Some Republicans inside the statehouse say they have committed to taxpayers that they will refund money when state revenues exceed TABOR limits, something that will happen starting next year. Continue reading

Oct 06

Evolution of the state’s current tax constraints

It’s been called “The Fiscal Thicket” and “The Gordian Knot” over the past couple of decades, but however one terms it, there are conflicts in the state’s tax policies for good or ill.

While some don’t mind those conflicts, saying it keeps state and local budgets in check, others say it makes it nearly impossible to budget into the future, leaving some of the most basic needs going underfunded.

Here’s a timeline on how the state got here:

? 1982: It started when Colorado voters approved the Gallagher Amendment. That constitutional amendment split the state’s property tax burden, requiring commercial property to take the bulk of it, 55 percent, to residential at 45 percent. As a result, taxes for commercial property are assessed at 29 percent of its assessed value, while residential has dropped to 8 percent.

? 1992: A decade later, voters approved the Taxpayer’s Bill of Rights, which, among other things, placed a cap on how much money state and local government budgets could grow year after year, limiting it to population increases and inflation. It also required that any new tax be approved by voters. As a result, few tax increase proposals have been placed on the ballot.

? 2000: As a result of those two amendments, voters then approved Amendment 23, which called for automatic increases in K-12 spending regardless of what the economy was doing. As a direct result, about 40 percent of the state’s total budget now goes to fund education.

? 2005: To deal with an issue in TABOR that required state and local budgets to ratchet down during bad economic times, voters approved a five-year timeout of TABOR’s revenue caps, meaning any additional revenue that governments collected during that time could be reapplied to state and local services.

? 2009: Because taxes for gasoline haven’t gone up since TABOR was approved, and there was an increase in caseload due to the passage of the federal Affordable Care Act, the Colorado Legislature approved two new fees. One is known as the Road & Bridge Enterprise Fund, an additional fee that all Coloradans pay when registering their vehicles each year. The fund generates about $200 million a year for transportation projects. The second was the hospital provider fee, a charge hospitals pay to cover the cost of the additional uninsured Coloradans under the Affordable Care Act. This is the same year the Legislature created a “negative factor” on school funding, reducing how much money the state was paying for K-12 education.

Source: Colorado Legislative Council

http://www.gjsentinel.com/news/articles/evolution-of-the-states-current-tax-constraints

Oct 06

Explaining the Hospital Provider Fee proposal

The Hospital Provider Fee was created by an act of the Colorado Legislature in 2009 to help provide health care to those who can’t afford their own medical coverage and were not already qualified for Medicaid.

It is assessed on hospitals based on the number of patients they have, and is used to offset the cost of Medicaid programs, meaning some of the money is returned to the hospitals based on statewide provider rates.

The Legislature uses the fee to maximize how much it gets from the federal government to comply with the federal Affordable Care Act.

Since it was enacted, more than 300,000 Coloradans who couldn’t afford health care now have coverage either through Medicaid or the state’s Child Health Plan Plus.

Under the Taxpayer’s Bill of Rights, state revenues from virtually all sources, taxes and fees are limited year over year depending on population and inflation. But some revenues can be exempt from those limits if they are used for a specific purpose and get less then 10 percent of their revenues from tax dollars. Most universities, for example, are considered standalone enterprises, something TABOR allows, and aren’t subject to its revenue limits.

The proposal to take the provider fee out from under TABOR would work just like that. It would make the Hospital Provider Fee Fund its own enterprise, which would have the effect of taking that money — about $535 million last year, and $688 million this year — out from under the TABOR revenue cap, freeing up an equal amount of money to be used for other services, such as transportation and education.

But lowering that amount also would cut into any TABOR refunds, which are projected to be about $352 million by the 2017-18 fiscal year.

Source: Colorado Department of Health Care Policy & Financing and the Colorado Hospital Association

http://www.gjsentinel.com/news/articles/explaining-the-hospital-provider-fee-proposal

Oct 03

Political diatribe

We saw this on Facebook:

Warning: Political diatribe to follow….

Love it when our state government tries to raise our taxes via a ballot initiative in a non election year. (insert sarcasm font)

This November 3, 2015, Colorado has an election in which the only issue is Prop BB, which states “allow the state to retain and spend 66.1 million, which has already been collected, rather than refund it to taxpayers”. as, note, is required by Colorado state law.

Hell no. I don’t care if my refund is only $16. It is my $16 to decide what to do with, not some wasteful government bureaucracy’s. They have enough money. If they did actually not, they would not be afraid to put this prop thru during an actual election year when people are paying attention.

If you live in Colorado, this November please vote on this. Either for or against is up to you of course, but do not let this issue be decided by an unrepresentative minority.

Thanks.

end political diatribe:

Oct 02

Proposition BB asks voters if state can keep marijuana tax revenue

TABOR rule requires state to refund all of 2014-15 pot money

In November 2012, 55 percent of Colorado voters said they wanted to legalize and tax recreational marijuana when they approved Amendment 64. One year later, 65 percent of Colorado voters approved Proposition AA, a tax plan for recreational marijuana that set up a 15 percent excise tax and a 10 percent sales tax on the newly legal product and directed where those funds would go.

This November, Colorado voters will again be asked about taxing recreational marijuana.

 Proposition BB is the only statewide ballot measure to be voted on Nov. 3, and the language voters will see is as follows:

“May the state retain and spend state revenues that otherwise would be refunded for exceeding an estimate included in the ballot information booklet for Proposition AA and use these revenues to provide forty million dollars for public school building construction and for other needs, such as law enforcement, youth programs, and marijuana education and prevention programs, instead of refunding these revenues to retail marijuana cultivation facilities, retail marijuana purchasers, and other taxpayers?”

Under Colorado’s Taxpayers Bill of Rights (TABOR), the state must refund new tax revenues if they exceed revenue estimates published at the time of the vote on the new tax, in this case Proposition AA in 2013.

At the time, state economists published an estimate that the new marijuana taxes would generate $67 million in revenue. For the first fiscal year of the new tax, from July 1, 2014 to June 30, 2015, the taxes generated approximately $66.1 million, below the original estimate and in compliance with TABOR.  Continue reading

Oct 02

Hickenlooper warns K-12 shortfall may grow

Colorado’s $855 million school funding gap may well grow in 2016-17, Gov. John Hickenlooper said Thursday in remarks to a group that advocates for improved school support.
“We might not be able to decrease the negative factor, and there might be an increase,” the governor said, referring to the 2016-17 budget plan he has to submit to the legislature by Nov. 1.
Hickenlooper spoke to the annual fundraising luncheon for Great Education Colorado, an advocacy group that long has been critical of the negative factor, the formula the legislature uses to control school spending and balance the state budget.
The Colorado Supreme Court just last week rejected the case of Dwyer v. State, a constitutional challenge to the negative factor. That decision disheartened many education advocates.
Hickenlooper’s remarks were not surprising, given the court ruling and a variety of complicated budget challenges facing the state. But it was the first time the governor publicly gave that warning to a large education audience.
The governor’s comment was made in the context of brief, campaign-style remarks during which he pushed for a change that would ease pressure on the state’s revenue ceiling and dismissed Republican criticism of two administration transportation initiatives.
Negative factor history
• Fiscal year 15-16: $855.1M
• FY14-15: $880M
• FY13-14: $1.004B
• FY12-13: $1.001B
• FY11-12: $774M
• FY10-11: $381M
• FY09-10: $130M Continue reading

Sep 30

Understanding the Difference between Taxes and Fees

March 28, 2013

Washington, DC, March 28, 2013—In a new Background Paper released this week by the Tax Foundation, How Is the Money Used? Federal and State Cases Distinguishing Taxes and Fees examines state-by-state what a tax is, what a fee is, and how public understanding of the difference between the two can strengthen taxpayer protection provisions, minimize distortions caused by hidden or mislabeled taxes, and help increase transparency of the cost of government programs.

“A tax has the primary purpose of raising revenue,” said Joseph Henchman, Tax Foundation Vice President of Legal Projects, and author of the exhaustive study. “By contrast, a fee recoups the cost of providing a service from a beneficiary.”

“This is not just a matter of semantics,” Henchman added. “In order to protect taxpayers, many state constitutions contain additional procedural steps and limitations that apply only to tax increases. These protective measures can be undermined if the legislature can circumvent them by merely relabeling what would otherwise be a tax, so a workable definition of ‘tax’ is necessary to give them meaning.”

The report finds that all but two states (North Carolina and Oregon) have adopted these definitions, with Ohio as the most recent addition. The report also reviews which states rule in favor of taxpayers when tax laws are ambiguously worded, and which states have rejected the discredited notion that taxes are “mandatory” charges while fees are “voluntary” charges.

“With April 15th arriving soon, taxes will be on the collective minds of our nation,” said Tax Foundation President Scott A. Hodge. “As taxpayers sign over checks to the government, an understanding of what the word ‘tax’ means is of upmost importance.”

Tax Foundation Background Paper No. 63, “How Is the Money Used? Federal and State Cases Distinguishing Taxes and Fees” by Joseph Henchman is available here.

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937. To schedule an interview, please contact Richard Morrison, the Tax Foundation’s Manager of Communications, at 202-464-5102 or morrison@taxfoundation.org.

 

http://taxfoundation.org/article/understanding-difference-between-taxes-and-fees

Sep 22

TABOR IN ACTION: Refunds Means It’s Working

Democrats like to lament any tax refunds as a sign the Taxpayers Bill of Rights (TABOR) is screwing over Colorado. Except,as Sen. Kevin Grantham points out in this morning’s Denver Post, these refunds just remind people why they like TABOR and that it works.

In addition to ensuring that no tax increase can pass without voter approval, TABOR also ensures that the size of state government doesn’t spiral out of control. It includes a formula that calculates population growth plus inflation, so that government keeps pace with growth instead of surpassing it during prosperous years. Refunds are the result of revenues exceeding this cap.  Put another way, TABOR reminds us that we don’t have a revenue problem, we have a spending problem.

 Sen. Kevin Grantham

But even the mention of a potential TABOR refund and the left hits the red panic button, threatening significant budget cuts and fretting about having enough money to spend. It’s the same old knee jerk assumption that everything is underfunded and there is never enough money when that’s not necessarily true.

The truth is that governing is about making hard choices and setting priorities. The current budget is $25 billion and was passed with bipartisan support, so we know it can be done.

Yes, there may be challenges ahead. But instead of trying to dismantle a popular taxpayer protection at every turn, Democrats should try some optimism for a change and work with the revenue they are generously given by the people of this state.

http://coloradopeakpolitics.com/2015/09/22/tabor-in-action-refunds-means-its-working/