Category Archives: Fees

Dec 21

Herman: Course correction needed for Colorado’s economic outlook

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December 20, 2024 By Nash Herman

The University of Colorado’s Leeds School of Business recently released their 60th annual Business Outlook for 2025, and, despite a moderate outlook  in 2025, the report includes some disturbing trends in the Colorado economy.  Let’s take a look at some of what’s going wrong.

Troubling trends

As pointed out by Denver Post business writer Aldo Svaldi, Colorado was the fifth fastest growing economy in the country in the last 15 years, but was 41st this year.

In terms of personal income growth, Colorado moved from third to 39th.

Although Colorado only moved down from sixth to 15th for employment growth, it comes with the caveat that the job gains this year were skewed toward government, education and healthcare, and leisure and hospitality.

Conversely, the growth of the high-paying professional and business services industry has continued a downward trend since 2022.

Fueled by slowing migration to Colorado and an aging population, Colorado’s labor force growth ranking also moved from sixth to 29th.

Taxes, spending and regulation

Obviously, some of the problems with Colorado’s economy are externally caused, like the lingering effects of the pandemic and subsequent inflation from federal spending.

However, I think there is still more to be said as to why Colorado’s economy seems to be stuttering now.

Colorado’s shift toward bigger government and away from the free market is why these problems are beginning to manifest. Over-regulation, over-spending, and over-taxation are the key culprits. To Coloradans who have witnessed the economy’s decline, the most noticeable difference between today and twenty years ago is that the state now more closely resembles California more than the entrepreneurial Colorado of old. Continue reading →

Nov 25

Perspective: Taxes — by another name

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Perspective: Taxes — by another name

  • By Lang Sias

Since 2018, Colorado taxpayers have benefited from two reductions to the state income tax that together have brought the rate from 4.63% to 4.4%, for an aggregate reduction of 0.23%. These reductions have been much heralded by state government leaders and have elicited approving comments from a wide range of observers.

The applause for these tax cuts, however, has obscured a separate tactic that state leaders increasingly have used to extract revenue from Coloradans in amounts that dwarf the income tax reductions. During the last two decades, Coloradans have seen a steady increase in the fees paid to a wide range of state enterprises. The pattern has accelerated dramatically since 2018.

According to a recent Common Sense Institute study, fee-based revenue to enterprises has increased since 2018 by an amount equivalent to a 0.51% increase in the state income tax — so, more than double the recent tax cuts. If Colorado’s fee enterprises, minus higher education, were instead funded by the state income tax, the state income tax would increase to 7.68%, a 75% increase over the current rate of 4.4%.

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Aug 31

Colorado’s fee-based enterprises skirt TABOR, increase revenue by 3,000%

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Colorado’s fee-based enterprises skirt TABOR, increase revenue by 3,000%

State-owned enterprises increase fees from 46% of total state spending in 1996 to 71% in 2023

In 1992 voters enacted the Taxpayer’s Bill of Rights to constrain the growth of government by requiring voter approval for tax increases. Since then, the state government has built a new structure to avoid that requirement.

The creation of TABOR-exempt state-owned “enterprises” has allowed government to increase fees from 46% of total state spending in 1996 to 71% of state spending in 2023 without requiring approval from taxpayers, according to a new report released by the Common Sense Institute, a non-partisan research organization “dedicated to the protection and promotion of Colorado’s economy.”

“Fees are a rapidly growing and significant cost for Coloradans,” said Kelly Caufield, Executive Director of the Common Sense Institute. “At the end of the day, it doesn’t matter if we call it a tax or a fee, these costs are driving the cost of living in our state.”

Continue reading →

May 14

Gaines: Getting back from the state what we’re owed under TABOR

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Pretend that your employer accidentally overpaid you, say $20 extra a month for a couple years.  Neither of you notice until one day you get an email telling you about the mistake.  The mistake has been fixed and your pay will be $20 less going forward.  Also, you now owe your employer $240.  Not a pleasant thing to consider.
Fresh on the heels of Governor Polis signing the state budget, we got similar bad news.  Due to an accounting error there’s a $67 million “oops” in the budget.
The mistake stretches all the way back to the hurried 2020 legislative session and a bill rushed through for Polis’ signature.  SB20-215 created the Health Insurance Affordability Enterprise, another of those government-run “businesses” which attaches a fee to many health insurance policies (any policy regulated by the state’s division of insurance).
These fees go to Governor Polis’ pet reinsurance programs as well as subsidies for low-income residents, including, incidentally, those here illegally.  Like all enterprises, this revenue was not subject to the revenue limits the Taxpayer’s Bill of Rights (TABOR) puts on the government.
So far a pretty standard example of how our legislature likes to meet its priorities, not by the consent of those that foot the bill, but by taking without asking first.  The problem came in because someone, somewhere in the state government, screwed up.  I can’t quite seem to find out the exact details, but someone goofed.  Tax revenues from the state’s general fund were going to this enterprise, as they were supposed to by an earlier law and no one kept the money separate.
They should have been separate because the general fund dollars are decidedly not exempt from TABOR limits.  The state was keeping money above TABOR limits pretty much since the start of this enterprise, shorting us on money we are owed.  As I say above, the exact details of who knew and when are not too clear to me; I have seen different versions in different news stories.  Some say that no one on the legislature’s Joint Budget Committee knew until after the budget was signed, the legislators being kept in the dark while the state controller and the attorney general were trying to see if they did indeed have to return the money.
If you have seen headlines on this problem, you may or may not have noted a discrepancy in the dollar amounts.  Some articles say $67 million, some say $34.  Both are right, but the semantics are important.  The total owed is $67 million:  $33 million for this year and $34 million for the past couple years of overpayments.  If I return to my analogy from before, you could liken the $34 million to the $240 you’d owe your employer, the $33 million to the $20 loss on your current check, and the loss of that $20 per month in the future to the problem the state has in trying to figure out how to fund the enterprise fully going forward.
Going forward is pretty simple.  Perhaps not pleasant, but simple.  A bill is already working its way through the legislature to make sure that this problem doesn’t recur.  Working in descending order, the next problem is how to pay the $34 million overcharge from this year.  That one will likely get paid, at least in part, by not sending general fund revenue to the enterprise this year.
Lastly, the thorniest problem, the one that I think seems to be causing the most heartburn is how to pay taxpayers back the $33 million they’re owed from the last two years.  I had to laugh when I read up on this issue because some Democrats, the same ones that howled about the irresponsibility of using the state’s reserves to help temporarily drop property taxes in the last special session, are now perfectly okay with dipping into said reserves to pay taxpayers back.  Funny how quickly reckless financial irresponsibility isn’t reckless anymore when the political need is big enough.  Tapping reserves carries a couple problems, however.  First, the legislature must enable this to happen because this size of a hit puts us below the statutory minimum, and somehow, at some point in the future, that loss would need to be made up.
Another route open to our legislature would be to reduce spending.  They could simply not spend as much this session and put that money into refunds.  You know, kind of like when you have to forego some spending you wanted due to unexpected bills.
I marvel at this whole story.

Continue reading →

May 09

EDITORIAL: Rein in violations of taxpayer’s rights

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EDITORIAL: Rein in violations of taxpayer’s rights

    •  Updated 

BIZ-WRK-ACCOUNTING-WORKLIFE-DMT

The 2024 tax and audit season, which generally stretches from mid-January to mid- or late April, hasn’t been quite as challenging as it was in pandemic years, industry experts said.

Government is supposed to be of, by and for the people. That’s why Colorado voters passed the Taxpayer’s Bill of Rights in 1992, forcing the state government and other taxing jurisdictions to obtain voter approval before raising taxes or spending revenues that outpace inflation and population.

Moments after voters passed the law, politicians began routing around it. They began levying and/or raising car registration “fees,” energy production “fees” professional registration “fees,” doing-business “fees,” plastic bag “fees,” phone “fees,” tire “fees,” alcohol “fees” and much more.

Politicians who don’t want to ask for a tax increase — those who think they know what’s best for other peoples’ money — learned early on they could call a “tax” a “fee” and from TABOR become free. Courts, which make up a major component of state and local taxing jurisdictions, have gone along with this ruse.

Boldly flouting federal law, the Colorado Legislature recently passed Senate Bill 184 to impose a “Congestion Impact Fee” on rental vehicles. The money will go to fund passenger rail and other Democratic pet projects marketed as good for the climate.

To continue reading this story, please click (HERE) to at the Denver Gazette.

Apr 07

Colorado Voter Survey Reveals Major Disapproval to Proposed Alcohol Tax

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Colorado Voter Survey Reveals Major Disapproval to Proposed Alcohol Tax

Shawnee Adelson, Colorado Brewers Guild
https://coloradobeer.org/ 

A newly proposed 200 percent hike in alcohol taxes from Sens. Kevin Priola (D-13th District) and Chris Hansen (D-31st District) has been met with strong opposition from Colorado Voters.

In a newly published survey by Nelson Research, the proposal, SB 24-181, “loses support among all major
demographic subgroups as more information is known about the funding mechanism and impacts on
economy, democratic process, small business/consumers, and overall lack of prioritization of current alcohol tax dollars.” Starting with a 2-to-1 general disapproval of alcohol taxes (48.9% opposed vs. 23.3% approve), the measure only fares worse once voters learn how the bill was structured to get around Taxpayer’s Bill of Rights (TABOR) provisions as well as its effect on Colorado’s economy. Its final disapproval rating is 58% with just 26% in favor.

In addition to the provision itself, voters also rejected the plan to label this tax as a “fee” by 61-21 percent.

This poll is clear and overwhelming evidence that Coloradans reject higher alcohol taxes. We hope that the bill sponsors listen to their constituents.

The survey was conducted from March 25 – March 27, 2024. The survey consisted of 538 registered voters in Colorado. The sample size (n=538) is sufficient to assess voter sentiment within a margin-of-error of +/- 4.2% at a 95% confidence level.

Further polling insights include:
? Opposition to a 200% tax increase: Results when told the bill raises the tax on beer, wine and liquor by
200% – or three times the current tax level. 22.1% In Favor & 66.0% Opposed
? Economic impact: Results when told Senate Bill 24-181 would hurt Colorado’s vibrant tourism
economy as it would cost local restaurants, brew pubs and craft breweries over $25 million in lost retail
sales. 16.6% In Favor & 70.4% Opposed
? Current tax allocation: Results when told the state already collects millions of dollars in alcohol tax
payments, but does not prioritize treatment and recovery services. Respondents were asked if legislators
should prioritize the way they currently spend their alcohol tax dollars instead of requiring more taxes.
65.0% Agree or in favor & 40.7% Opposed

Colorado Voter Survey Reveals Major Disapproval to Proposed Alcohol Tax

Mar 24

Water district subject to TABOR vote requirement

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Water district subject to TABOR vote requirement

Water districts are like all other government entities that are subject to the Taxpayer’s Bill of Rights when it comes to voters approving tax increases, the Colorado Appeals Court ruled Thursday.

In a precedent-setting case out of Logan County in the northeast corner of the state, a three-judge panel overturned a lower court’s decision that the Lower South Platte Water Conservancy District that serves four Eastern Plains counties violated TABOR by doubling its mill levy starting in 2019 because it did so without voter approval.

The lower court had ruled in favor of the district, saying its raising of the levy from 0.5 mills to 1 mill did not violate that 1992 constitutional amendment because the water district was formed before TABOR was approved, and is required under the state’s Water Conservancy Act to set a mill levy based on a mandatory and non-discretionary formula.

The water district tried to argue that the Colorado Supreme Court, in Huber v. Colorado Mining Association, allows such mill levy increases because of that formula.

But a three-judge panel said that high court ruling applies to entities that aren’t making a legislative or governmental act for a tax-rate increase, but a non-discretionary duty under pre-TABOR taxing statutes, such as the Colorado Department of Revenue making legally required adjustments to severance taxes. Continue reading →

Mar 24

TABOR: The enduring success story empowering Colorado taxpayers

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TABOR: The enduring success story empowering Colorado taxpayers

BY BARRY W. POULSON, OPINION CONTRIBUTOR – 03/22/24 7:00 AM ET

AP Photo/David Zalubowski

The dome of the State Capitol shines in the early morning sun Friday, May 28, 2021, in downtown Denver. (AP Photo/David Zalubowski)

 

Even as economists tout a soft landing for the U.S. economy, Americans are facing sticker shock at the grocery store, the gas pump, and fast-food restaurants, among other places.

After a long bout of double-digit inflation, not unlike that of the 1970s. We have learned once again that unconstrained growth in federal spending funded by borrowing and accommodative monetary policy eventually triggers high inflation.

In response to stagflation in the 1970s, Congress enacted statutory fiscal rules designed to balance the budget and stabilize debt. The Federal Reserve also pursued tighter monetary polies to stabilize prices. In the 1990s, a period referred to as “The Great Moderation,” the federal government achieved sustainable debt levels and low rates of inflation.

Unfortunately, over the last two decades, the federal government largely abandoned these fiscal and monetary policies. Federal spending has far outpaced the growth in national income, and federal debt has grown at an unsustainable rate. The statutory fiscal rules designed to constrain federal spending are routinely circumvented and suspended.

The Federal Reserve has again used monetary policy to accommodate these fiscal policies, resulting in wide swings in the rate of inflation. It is difficult to argue that we are experiencing a soft landing and that all is well. A more realistic forecast is that over the next decade we will again experience stagflation.

But there is a bright spot in this gloomy outlook.

In response to stagflation in the 1970s, citizens launched state and local tax revolts. Beginning with property tax limitations in California, citizens began to challenge profligate fiscal policies at the state and local level. Using the initiative and referendum, citizens enacted tax and expenditure limits to constrain fiscal policies. Continue reading →

Feb 28

Fiscal Rules and ‘Learning by Doing’

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February 28, 2024

Fiscal Rules and ‘Learning by Doing’

By Barry Poulson

An important discovery in understanding productivity change and economic growth is the phenomenon of “learning by doing.” One of the first discoveries of this phenomenon was in the aircraft industry during World War II. Defense contractors discovered that in producing a particular aircraft, the labor force was more efficient with each successive contract. The labor force gained knowledge in producing aircraft in the initial contract that they applied in subsequent contracts.

Learning by doing is found to increase productivity across many industries. It is found in pursuing public policies as well. I gained insight into these learning effects as a member of the Colorado Tax Commission. We held hearings across the state to gain insight into citizen attitudes toward fiscal policy, and in particular to Colorado’s Taxpayer Bill of Rights Amendment (TABOR). If any government in Colorado wants to increase taxes, revenues, or issue public debt, it must have citizen approval. Citizens in Colorado have voted on hundreds of these ballot measures at all levels of government since TABOR was passed through citizen initiative in 1992. Continue reading →

Feb 23

Freedom Minute | Colorado’s Taxpayer Bill of Rights (TABOR)

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Economist Dr. Paul Prentice explains Colorado’s Taxpayer Bill of Rights (TABOR) amendment. TABOR allows the state budget to grow each year at population plus inflation, while giving taxpayers the ability to vote on all tax and debt increases.