Sep 14, 2023 - News

How much Prop. HH will cut TABOR refunds in Colorado

 Colorado tax refunds per filer under <span style="background:#009144; padding:3px 5px;color:white;">current law</span>  and <span style="background:#98f0c0; padding:3px 5px;color:#333335;">Prop. HH</span>
Note: For single filers; numbers double for joint filers. Data: Legislative Council Staff; Chart: Thomas Oide/Axios

One word is missing from the Prop. HH ballot language: TABOR.

Yes, but: It's a huge factor in the debate.

What to know: TABOR refunds will increase beyond current levels for 60% of taxpayers in tax year 2023 if the ballot measure passes.

  • But in the future, the measure would decrease — and possibly eliminate — rebates for everyone, nonpartisan economists predict, making it the equivalent of a tax hike.

By the numbers: For 2023, the measure would put all TABOR refunds at a flat $898, meaning increases between $60 and $270 for individuals making $99,000 or less. Those earning more would see less than expected.

  • In the next two tax years, the annual decrease in TABOR refunds — if the state continues collecting surplus revenue — ranges between $31 for lower-income earners and $212 for higher-income brackets.

What's happening: The measure's most significant question is allowing the state for the next 10 years to keep up to 1% in additional tax revenue that would otherwise go back to voters. By the end, it would amount to $2.2 billion a year.

The big picture: Colorado is expecting to issue $7.3 billion in taxpayer refunds in the next two tax years, according to the latest estimates.

Details: Colorado lawmakers are promising to use the additional revenue to reimburse all money lost by school districts and 65-100% of local government revenue decrease from the property tax cuts.

Of note: In 10 years, the Legislature can extend Prop. HH's provisions indefinitely — including retaining more tax revenue — without an additional public vote.

Between the lines: Republican lawmakers battled to make TABOR — and the loss of refunds — feature more prominently in the ballot language and voter guide, but the Democratic-controlled Legislature rejected the moves.

  • Right now, the ballot merely references "using a portion of the state surplus."

The intrigue: Just a year ago, ahead of the 2022 election, Gov. Jared Polis and Democratic lawmakers on the ballot celebrated TABOR refunds, touting them as the "Colorado Cashback." Now they want to trim them back moving forward.

What they're saying: The about-face is leading to voter opposition, said Jesse Mallory, the state executive director of the conservative Americans for Prosperity, which opposes Prop. HH.

  • "There's a real lack of trust among voters right now," Mallory said Wednesday as his organization went door-to-door talking to voters. "The legislature says give us more and we'll spend it this way. This time people just don't believe it."

The other side: Senate President Steve Fenberg (D-Boulder), who is leading the proponent campaign, pointed to the record number of property appeals to show that residents are open to tax cuts.

  • "If we don't do anything, property taxes are expected to go up 40%, and this would have dire consequences, especially for vulnerable people," he said in an interview.

Be smart: Get an estimate of how much you'll save under Prop. HH using the state's calculator.

Read more: How much Proposition HH will lower Colorado property taxes

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