Category Archives: Why TABOR Matters

Jan 28

River district considering tax hike

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The board of the Western Slope’s Colorado River District is considering whether to ask residents in the 15 counties it serves, including Mesa County, to approve a tax hike.

The district’s general manager, Andy Mueller, is recommending that the board consider seeking voter approval in November to raise the district’s property tax mill levy to 0.5 mills. That would boost annual revenues by about $4.9 million, much of which the district could use to work with partners to fund water projects.

The increase would cost the average homeowner in the district an estimated $8.63 a year, but that amount would vary widely across the district due to disparities in property values, ranging from about $3.71 a year in Moffat County to $23 a year in Pitkin County. The increase would cost about $1.90 a year per $100,000 of assessed valuation.

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Jan 23

Bipartisan bill proposes fee-based hazard mitigation enterprise; to fall outside TABOR revenue limits

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Bipartisan bill proposes fee-based hazard mitigation enterprise; to fall outside TABOR revenue limits

January 22, 2020 By Scott Weiser


Hazard mitigation controlled burn
Courtesy of W. Perry Conway

DENVER–House members Matt Soper, R-Grand Junction and Lisa Cutter, D-Jefferson County are proposing to create a new state-owned hazard mitigation enterprise that would collect a 0.05% fee on certain policies from insurance companies.

The enterprise would in part “assist entities that apply for federal grants that require matching funds and are dedicated to assisting in the implementation of pre-disaster hazard mitigation measures.”

Other tasks include “public education on the importance of insurance in buying down risk and for the continuity of business operations, and provide local governments technical information and support on natural hazard mitigation through land use and building codes.”

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Jan 23

Income tax rate reduction bill killed by Senate Democrats

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Income tax rate reduction bill killed by Senate Democrats

(Photo illustration by Tinnakorn Jorruang, iStock)

Gov. Jared Polis, in his state of the state address on Jan. 9, continued to voice support for the concept of an income tax rate reduction, but it isn’t going over well with Democrats in the state legislature.

And they showed that on Wednesday, when Democrats on the Senate State, Veterans and Military Affairs Committee put to an end Senate Bill 20, voting it down on a 3-2 party-line vote.

The measure is the second attempt in the past two years from Sen. Jerry Sonnenberg, R-Sterling.

Sonnenberg’s bill would reduce the state’s individual and corporate income tax rate from 4.63% to 4.49%. The bill’s fiscal analysis said it would cost the state $143.8 million in lost tax revenue in 2019-20 and $294.6 million the following year.

And because of the Taxpayer’s Bill of Rights (TABOR), that reduction would be permanent unless voters decided to allow the state to increase income tax rates through a ballot measure.

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Jan 19

2020 Triggers Blue State Tax Cuts, As Colorado Shows How To Insulate A State From Higher Taxes And Unsustainable Spending

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The new year has brought reduced income tax rates to two Democrat-run states: Colorado and Massachusetts. These income tax cuts were the result of two and nearly three decade old laws that triggered this new round of income tax relief in the face of opposition from progressive politicians who control state government in Denver and Boston.

Massachusetts’ flat income tax rate dropped from 5.05% to 5.00% on New Years Day 2020, the result of a ballot measure approved by Massachusetts voters in the year 2000, the implementation of which was subsequently delayed by Massachusetts legislators. Colorado, like Massachusetts, is another state where the ruling political class saw an income tax cut that it opposed take effect on January 1, with the rate dropping from 4.63% to 4.5% for one year. This temporary rate cut is the result of a law approved by Colorado voters eight years before Massachusetts’ two decade-old tax cut-triggering ballot measure.

The temporary income tax cut that recently took effect in Colorado is due to the state’s Taxpayer Bill of Rights (TABOR), an amendment to the state constitution approved by voters in 1992 that to this day is the strongest taxpayer safeguard in the nation. Under TABOR, state revenue cannot grow faster than the combined rate of population growth and inflation. Any state revenue collected in excess of the TABOR cap must be refunded to taxpayers.

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Jan 17

House Republican Whip Rod Montoya to introduce New Mexico Taxpayer Bill of Rights

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By NEW MEXICO HOUSE GOP • JAN 15, 2020

Commentary:  Today, Rep. Rod Montoya (R-Farmington) announced he will introduce legislation for the upcoming 2020 Legislative Session establishing a New Mexico Taxpayer Bill of Rights (TABOR). The constitutional amendment, if enacted, will restrict annual spending by state lawmakers and require any future tax increase to be approved by a three-fifths majority in both chambers. Additionally, the amendment would provide taxpayers with annual rebates after spending limits are met. If approved, the constitutional amendment would be placed on the ballot for voter ratification in the 2020 general election.

Since Governor Lujan Grisham was elected, she has supported increasing state spending by $3.7 billion and signed into law one of the largest tax increases in the state’s history.

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Jan 16

House Republican Whip Rod Montoya to introduce New Mexico Taxpayer Bill of Rights

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Commentary:  Today, Rep. Rod Montoya (R-Farmington) announced he will introduce legislation for the upcoming 2020 Legislative Session establishing a New Mexico Taxpayer Bill of Rights (TABOR). The constitutional amendment, if enacted, will restrict annual spending by state lawmakers and require any future tax increase to be approved by a three-fifths majority in both chambers. Additionally, the amendment would provide taxpayers with annual rebates after spending limits are met. If approved, the constitutional amendment would be placed on the ballot for voter ratification in the 2020 general election.

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Jan 16

Colorado progressives have a new target in their pursuit of a tax overhaul: the rich. Here’s why:

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A host of proposed ballot measures for 2020 and proposals at the state Capitol are putting Colorado’s uneven tax system in the spotlight

The Colorado tax code, it pays to be rich and it’s expensive to be poor.

For decades now, that’s been the stark takeaway buried inside the 286-page report on Colorado’s tax system the state Department of Revenue releases every two years: The less you make, the more you spend on taxes, as a percentage of your income.

But despite growing public frustration over income inequality and the state’s rising cost of living, the tax disparities apparent in Colorado’s law have drawn little political attention.

That is, until now. After years of defeats at the ballot box, progressive advocates believe they’ve landed on a tax plan that can resonate with Colorado voters: making the rich pick up more of the bill.

The Colorado Fiscal Institute in December introduced 35 possible ballot proposals that would advance the idea and ask voters to re-establish a graduated income tax in the state for the first time in more than 30 years. Structured like the federal income tax, graduated or progressive state tax brackets would levy higher tax rates based on how much money residents make.

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Jan 13

Coming This Spring: TABOR-Triggered Income Tax Relief in Colorado

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Tax Foundation@taxfoundation
 
A pleasant surprise awaits Coloradans when they file their taxes this spring: a reduced tax rate of 4.5 percent will apply to income earned in 2019

January 6, 2020

Katherine Loughead

A pleasant surprise awaits Coloradans when they file their taxes this spring: a reduced tax rate of 4.5 percent (rather than the usual flat rate of 4.63 percent) will apply to income earned in 2019. This temporary income tax rate reduction, which will be enjoyed by individuals, pass-through businesses, and corporations alike, was triggered because state tax collections exceeded the Taxpayer’s Bill of Rights (TABOR) revenue limit by $428 million in fiscal year (FY) 2019.

TABOR, enshrined in the state constitution since it was approved by voters in 1992 (but amended by a an increased “Referendum C” cap in 2005), places an annual limit on state revenue growth, capping it at the prior year level after adjusting for inflation, population growth, and any voter-approved revenue changes. Any collections above that limit, by default, are returned to taxpayers unless a majority of voters authorize the state to retain the surplus.

The Colorado Constitution does not prescribe specific refund mechanisms but instead authorizes the General Assembly to make those determinations. Under current law, TABOR surpluses can be returned to taxpayers using up to three refund mechanisms: a property tax exemption reimbursement to local governments, a “sales tax refund,” and a temporary reduction in the state’s income tax rate. The income tax rate reduction is the most difficult to trigger since it requires the largest amount of revenue.