Coloradans can expect another TABOR windfall. How much depends on voters in November
Colorado economic forecasters predict another tax refund windfall next spring — though how Coloradans receive the excess collections depends on how they vote this November.
Forecasters for both the legislative and executive branches expect tax collections subject to Taxpayer’s Bill of Rights, or TABOR, caps to exceed $3.3 billion. That would be near the prior year’s record that lawmakers refunded through direct checks last fall. Following year forecasts still show excess collections, though not nearly as eye-popping.
Opponents are arguing its passage would lead to a long-term vacuuming of tax dollars that would otherwise be returned to taxpayers. Supporters, including Gov. Jared Polis and many lawmakers, argue the measure is necessary to backfill local governments and services whole while saving property owners hundreds of dollars a year in higher taxes driven by skyrocketing property values.
As an additional carrot, lawmakers attached a one-year, flat TABOR refund to the proposal passing. Economic forecasters with the Governor’s Office of State Planning and Budgeting predict individual taxpayers would receive $873 per filer — if HH passes. Forecasters for the legislative branch, who estimate a slightly lower breach of the TABOR cap, predict it would be about $854.
If Proposition HH doesn’t pass, the state would revert to the six-tier refund mechanism that gives lower-income taxpayers lower refund amounts, and higher-income taxpayers higher refunds, under the philosophy that higher-income taxpayers paid more into the overcollected taxes.
General estimates show that a flat rebate means more refund money for taxpayers reporting less than $100,000 in annual income and lower refunds for individuals with higher incomes. Forecasters for the legislative branch predict a six-tier refund would equal about $590 for single filers reporting less than $50,000 in income and $1,850 for taxpayers reporting more than $278,000 in income.
State Rep. Mike Weissman, an Aurora Democrat and sponsor of the bill flattening the rebate, called the six-tier system “inequitable” because it gives the well-off a bigger slice than lower-income folks. The updated forecasts pushed the expected flat rebate to nearly $200 more per person than when lawmakers passed the bill.
“Lower-income taxpayers — anybody under $100,000, which is a lot of Coloradans — will benefit from the passage of Proposition HH,” Weissman said. “… That’s been true since the legislative session. It’s more true now with this forecast.”
Overall, forecasters revised the economic forecast up for this fiscal year. They expect the economy to slow next year and in 2025, though still show overall growth.
“The economy is showing still positive growth, but slower growth than we saw in 2022,” Emily Dorman, an economist with the Legislative Council Staff, said. She expects that positive growth to continue through 2025.
She added that the risk of a recession is still elevated, but not as sharp as it was in March. Greg Sobetski, chief economist for the Legislative Council Staff, singled out the resolution of the federal debt ceiling fight and lower risk of a cascading financial crisis spurred by collapsing banks as positives. Looming uncertainty around long-term monetary policy and federal interest rate hikes tempers their optimism, though.
He predicted “a slow, plodding economic growth over the next year, year-plus, returning to a moderate pace of expansion in 2024 going into 2025.”
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