The future of Colorado's TABOR refunds remains in question
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How much of a refund Colorado taxpayers receive under TABOR will significantly shift in 2024 — and possibly into perpetuity.
What's happening: A new law — tied to the Proposition HH ballot measure — dictates equal refund checks of roughly $672 per person next year under the Taxpayer Bill of Rights, which caps state tax revenue and requires surpluses to go back to payers.
By the numbers: Any person or couple who makes more than $100,000 would get a smaller amount compared to the prior distribution system that gave more to higher-earners who paid more in income taxes.
Why it matters: The shift is opening a debate on how the state should issue tax refunds and the future of the landmark TABOR constitutional amendment.
The intrigue: The Democratic majority in the Legislature wants to make the new refund system permanent because they consider it more progressive.
Yes, but: Gov. Jared Polis signed the law with a caveat: He wants to see an overhaul in how refunds are issued in future years.
- The first mechanism to return surplus tax revenue should be a temporary decrease in the state's income tax, he argued.
- Then any remaining money would go toward flat refund checks, or only to those who qualify for the Earned Income Tax Credit by making less than $60,000.
Of note: If Proposition HH — to lower property taxes — wins in November, it will tap into TABOR dollars, leaving $10 billion less to refund in the next 10 years, meaning smaller checks all around.
- Opponents of the ballot measure are sounding the alarm, saying it eventually would eliminate TABOR refunds.
What they're saying: "If voters approve the initiative … within 10 years the TABOR amendment could be history," Tony Gagliardi, the state director for the National Federation of Independent Business, said in a statement.