Colorado to issue $4.1 billion in taxpayer refunds in next four years
Colorado is preparing to issue $4.1 billion in refunds to taxpayers over the next four years, new projections show.
State of play: Whether that's a good thing remains up for debate among state lawmakers.
What's happening: Democratic lawmakers and liberal advocates are renewing a push to bypass the Taxpayer's Bill of Rights and keep the surplus tax revenue, saying the money is needed to help the state build back from the pandemic and improve education.
- Early discussions involve moving certain revenue off the books.
- Another possibility is asking voters to keep the money through a ballot measure.
What they're saying: "This coming year, taxpayers will see rebate checks, but those will come at the expense of better funding for public services that reduce costs for all of us," state Sens. Chris Hansen and Dominick Moreno, both Democratic budget writers, wrote in a recent opinion piece.
The other side: Gov. Jared Polis, a Democrat, is cheering the refunds, saying they’re a sign of a good economy.
Conservative supporters of TABOR are blasting Democrats for wanting to keep the cash.
- "Colorado voters have said time and time again they want their TABOR refunds," said Jesse Mallory, the Colorado director of Americans for Prosperity, a limited-government group. "The legislature should not ignore the will of the voters and look for loopholes to keep them."
How it works: Under TABOR, the voter-approved constitutional amendment, Colorado's tax revenues cannot exceed the rate of inflation plus population growth. When they do, the surplus must go back to taxpayers unless voters allow the government to spend the money.
The size of the surplus determines how it is refunded.
- For the current year through 2024, the surplus is so large it will result in a temporary reduction of the state's income tax rate from 4.55% to 4.5% and a sales tax refund.
By the numbers: Refunds will total $471.4 million this year. The sales tax refund amounts to $69 for single-filers and $166 for joint-filers, while the size of the income tax cut is not yet known.
- The money will come when taxpayers file 2021 state taxes by next April.
- In future years, TABOR refunds are only projected to grow — to the tune of more than $1 billion a year, according to legislative economists.
What to watch: For years, Democratic lawmakers have explored ways to eliminate TABOR refunds, but Colorado voters rejected a 2019 ballot measure to eliminate them.
- The prospect of massive TABOR refunds in the future raises the stakes in the debate, but Democrats will need a new strategy if they want the state to keep the money.
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