DENVER (KDPR) – They’re likely to get another Taxpayer Bill of Rights (TABOR) refund, but will that be hurt by the state’s economic health?
New economic forecasts were released by the Governor’s Office of State Planning and Budgeting and the staff of the Colorado Legislative Council.
While both paint a picture of a strong Colorado economy, some warn that the outlook could change if two opportunities materialize in the near future.
Colorado appears to be doing well, but there’s a chance the nation could experience a recession. Some lawmakers are concerned about this, and two items on the ballot are about to be put to the vote.
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Public finances are in good enough shape for leaders to prepare for another repayment next spring.
OSPB executives said that thanks to 2022 revenue exceeding the TABOR cap, $677 million worth of TABOR refunds will be shipped in April with an average refund of about $250.
Some members of the state’s joint budget committee are concerned that those rebates and extra dollars could be severely reduced if two measures pass at this year’s vote.
The first is Proposition 123, which requires a portion of state income taxes to be used to fund new affordable housing.
The second is Proposition 121. It is a proposal to lower the state income tax rate from 4.55% to 4.40%. Some lawmakers on the Join Budget Committee argue that if inflation is high, passing this measure could deplete dollars exceeding the TABOR ceiling, but proponents of the proposal say passing 121 would not stop the state from doing so.
“We cut income tax two years ago in 2020 and since then we have more government revenue than ever. We’ve never had TABOR refunds this big. So to say just because there’s a government cut without that money, that’s not necessarily the case when we’ve had growth and we’ve seen growth in Colorado. So basically, you can put more money in people’s pockets and still attend to the needs of the state,” said FOX31 Republican political scientist Michael Fields.
Other supporters said the measure should help Coloradans keep more money up front.
“Why are we doing this stupid thing of collecting all these taxes so the government can keep them all the time and then bear the cost of recovering them later? The idea is to avoid that,” said Jon Caldara, president of the Independence Institute.
The Legislative Council estimates a loss of $43 per taxpayer refund in 2023 and $86 per taxpayer refund in 2024 if Proposition 123 is passed. Proposition 121 would lower the state income rate and reduce the amount returned to taxpayers, but the council predicts taxpayers would pay 3.3% less in state income taxes; the dollar amount would vary based on income.
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