Dec 31

Governor Hickenlooper unveils next year’s Colorado budget & taxpayer refunds

Governor Hickenlooper unveils next year’s Colorado budget & taxpayer refunds

by Lisa Cyriacks

For the first time in many years, Colorado government finds itself in a position of having to refund tax revenue to voters. The refunds are required when state revenue exceeds the combined rate of inflation and population growth.

Taxpayer rebates totaling $167.2 million are mandated by Colorado Taxpayer’s Bill of Rights (TABOR), assuming current law and the accuracy of the September forecast by the Office of State Planning and Budget.

A $30.5 million rebate for new marijuana taxes is coming. Total state marijuana revenue was different than what was projected in the election blue book. (In November 2013, Colorado voters approved Proposition AA, which allowed a 10% retail sales tax and a 15% excise tax.) Because the estimated revenue subject to TABOR was underestimated, under TABOR the state must refund the money being collected or ask voters again to keep it for additional state spending.

According to Governor Hickenlooper, it will be important to engage the legislature when the session begins on the issue of marijuana sales tax revenue rebates. At the time he presented the proposed budget he advised that it would be unwise for the state to plan to spend any of those funds in advance of that discussion. Continue reading

Dec 29

The national impact of a Colorado court case

Who is in charge of the American republic?

 A case out of the federal district court of Colorado could answer that question, if the Supreme Court takes the matter up next spring.

In 1992 Coloradans voted to amend their state constitution in order to impose restraints on their government’s power to tax and spend. The Colorado Taxpayer’s Bill of Rights (TABOR) has since given citizens the final say on new or increased taxes and spending.

That right, however, is now under threat from Kerr v. Hickenlooper , a lawsuit calling into question TABOR’s constitutionality. A federal appellate decision allowing this lawsuit to proceed is likely to reverberate in shockwaves throughout the nation.

Controversial from its inception, opponents of TABOR were concerned the law would make it more difficult for government to pursue costly new programs or to increase funding for existing programs. But the people spoke definitively when they adopted TABOR, both because it’s their tax dollars at stake and because they believed that government exists to serve their interests.

Not surprisingly — having lost in the court of public opinion — TABOR’s opponents have turned to lawsuits. They first brought suit in state court, arguing that TABOR’s fiscal limitations were somehow in conflict with the Colorado Constitution’s requirement that the state must provide adequate funding for public schools.

Never mind that TABOR allows schools to receive continued funding at existing levels, with annual adjustments for inflation and population growth. TABOR even allows for new or increased taxes when the citizens of the community approve the measure in a vote.

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Dec 25

EDITORIAL: Colorado tax ‘refunds’ will cost taxpayers dearly

The insult to injury of the TABOR Amendment is back: Colorado must refund hundreds of millions of dollars in taxes to state residents, despite the widespread public needs


As hopeless as it might seem, Colorado must revisit the argument over its ludicrous state tax “refunds” that hurt the state and all of us much more than any individual actually benefits.

If you’re new to these parts, Colorado suffers under a unwieldy and complicated set of restrictive budget laws dubbed the Taxpayer’s Bill of Rights, or TABOR.

The measure was a product of Colorado’s notorious anti-tax crusader Douglas Bruce and misguided state voters who approved the state constitutional amendment in 1992. As it was sold to voters, the measure capped state taxes by requiring that tax increases be approved by voters. But the convoluted and labyrinthine measure does so much more. It not only caps taxes, but it caps spending. Part of the amendment sets government services at a baseline, so that when budgets decrease in lean tax years, a new, lower baseline is set, creating the so-called, dreaded ratchet-down effect.

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Dec 25

TABOR rears its ugly head

 City Sage

Maybe not, because it’s TABOR time. When Colorado tax revenues increase too rapidly, the Taxpayer’s Bill of Rights and its arcane provisions authored by Douglas Bruce kick in, forcing the state to refund “surplus” tax revenues or ask voters for permission to retain them.

The state constitutional amendment may have seemed simple, transparent and commonsensical to the voters who approved it in 1992, but it isn’t. Sold as a measure that took away the power to raise taxes from spendthrift elected officials, the measure was far more complex.

Bruce wrote every word of the lengthy amendment, explicitly designed to shrink, hobble and defund Colorado governments at every level.

TABOR limits government revenue increases to an annual figure determined by population growth plus inflation. That may sound reasonable, but Bruce’s simplistic formula doesn’t work. It has forced the state to make continual service cuts and defer infrastructure maintenance and construction, because the world Bruce envisioned bears little resemblance to the world we live in.

In the real world, tax revenues may vary sharply during any multi-year period. If revenues are flat for years before rebounding sharply, too bad! The revenue cap starts from zero every fiscal year. The 2005 passage of Referendum C mitigated TABOR’s effects for a few years, and the recession made it irrelevant for a few more. But now it’s back with a vengeance.

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Dec 24

Economists: Colorado tax refunds could come year early

Colorado Capitol Dome

Colorado Capitol Dome (Denver Post file photo)

Colorado lawmakers may have to refund money to taxpayers sooner than they initially expected.

Refunds are a sign of Colorado’s booming economy. But they also mean lawmakers will be restricted in how much money they’ll be able to keep and spend under Colorado’s Taxpayer’s Bill of Rights, also known as TABOR. It requires refunds when revenue exceeds the combined rate of inflation and population growth.

State economists giving lawmakers a quarterly revenue forecast Monday gave conflicting estimates about whether refunds are required in the 2015 tax year. Legislative economists say no but warn that the possibility exists.

Gov. John Hickenlooper’s economists predict, however, that the state needs to refund $196.8 million next year because of revenue increases in the current budget year. Lawmakers weren’t expecting refunds until the 2016 tax year, and Hickenlooper’s budget request sets aside nearly $137 million for those.

But the latest predictions by the governor’s economists have increasing revenue collections in cash funds and severance taxes, hence their predictions for sooner-than-expected refunds. Henry Sobanet, Hickenlooper’s budget director, said the state has a revenue cushion to cover most of the $196.8 million that needs to be refunded. Still, about $73 million of that was already budgeted, so the governor’s office will present lawmakers with an adjusted spending plan by Jan. 2 to account for that amount. Continue reading

Dec 22

Colorado budget forecast shows continued growth but TABOR worries ahead

TABOR moneyColorado’s economy keeps getting better, and it continues to be reflected in the amount of money the state takes in from taxes.

That’s the conclusion from the latest estimates from state officials that show overall tax collections continue to improve in the state, coinciding with the continuing improvement in the state’s economy.

Revenue forecasts released Monday from the Office of State Planning and Budgeting (OSPB) and the nonpartisan Legislative Council both showed increases in forecasted revenues. The forecasts are used to set budget priorities for the state government for the remainder of the current fiscal year, which ends on July 1.

The more conservative forecast, from OSPB, suggests that general-fund revenues in the 2015-2016 fiscal year will be $53.6 million more than previously forecast just three months ago, when forecasters agreed that about $1 billion more in revenue would be available to lawmakers for spending on state programs in the coming fiscal year.

Forecasters continue to predict, however, that lawmakers will have to set aside as much as $120 million of the increased revenue to pay refunds to taxpayers mandated by the Taxpayer’s Bill of Rights, which limits the amount of increased revenues the state can take in and how much lawmakers can spend each year. Continue reading

Dec 19

Hickenlooper warns of budget perils to come, thanks to TABOR

Colorado Governor John Hickenlooper

Governor John Hickenlooper addresses his supporters at Union Station in Denver, Tuesday, November 4, 2014. (AAron Ontiveroz, The Denver Post)

The month before his second term starts, Gov. John Hickenlooper is painting a bleak picture of Colorado’s future budget situation, even as the state’s economic fortunes improve.

“Some of the things we’ve taken for granted and counted on in terms of our quality of life, we probably won’t be able to continue to afford,” he told the Denver Forum at a luncheon Tuesday.

The reason for the strife, the Democrat made clear, is the state’s constitutional spending limit known as the Taxpayer’s Bill of Rights.

It’s politically volatile to point the finger at TABOR, and Hickenlooper sought to walk a fine line as he raised questions about its impact.

In fiscal year 2016, Colorado is forecasting taxpayer refunds because the state’s revenues are exceeding the inflation-plus-population-growth-cap for the first time in 15 years.

Unless lawmakers seek to keep the money, the refunds will go out the door even as the state struggles to meet its constitutional requirement to fund education under what is known as Amendment 23. The state is short $900 million on education funding, according to analysts. Continue reading

Dec 19

Estimated $15 TABOR refund in 2017 could keep CDOT from getting $271 million for I-70 viaduct plan

A Colorado taxpayer refund of around $15 could keep the Colorado Department of Transportation from getting $271 million for its Interstate 70 viaduct project.

CDOT has been working on a plan to lower the I-70 viaduct, put a cap over some of the road and add two toll lanes in each direction from Interstate 25 to Interstate 225. That project is estimated at $1.2 billion.

CDOT was anticipated $271 million from the state, as a result of a funding mechanism from a Senate bill (SB 228) passed in 2009. However, if Colorado taxpayers are due a Taxpayer Bill of Rights (TABOR) refund, then CDOT’s share of state money would be reduced or eliminated altogether. Continue reading

Dec 18

Coloradans face choice: tax refund or pay for services, governor says


Audio: Gov. John Hickenlooper speaks with Ryan Warner

Newly re-elected Colorado Democratic Gov. John Hickenlooper smiles to applauding supporters as he arrives to deliver his victory speech, at the Capitol, in Denver, Wednesday, Nov. 5, 2014. Hickenlooper won a second term in office, narrowly defeating Republican challenger Bob Beauprez.

(AP Photo/Brennan Linsley)

Democratic Gov. John Hickenlooper says that voters will soon face difficult decisions regarding the state’s finances.Economists predict the state will be forced to refund excess tax money to citizens under to Colorado’s Taxpayer’s Bill of Rights in coming years.

Hickenlooper says that will mean the state may have to cut some essential services. As an example, he says the state won’t be able to provide oversight of nursing homes to the extent it currently does — and at a time when the nursing home population is growing.


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