With the state of Colorado in a rare and temporary condition of having plenty of revenue resulting from a quick recovery from the economic disruption of COVID and lots of federal relief money still working its way out the door, state economic forecasters had good news for the legislature’s Joint Budget Committee today–and thanks to a change in the distribution formula for refunds to taxpayers triggered in sunny economic times by the state’s notorious Taxpayer’s Bill of Rights by majority Democrats this year, the JBC’s good news is about to directly impact your bottom line. The Colorado Sun’s Jesse Paul reports:
The big takeaway: State lawmakers are expected to have more money to fund government services in the coming years as revenue continues to exceed the Taxpayer’s Bill of Rights cap on government growth and spending, which is calculated through population growth and inflation. When the TABOR cap is exceeded, Coloradans get tax breaks and, if the excess is large enough, which it is expected to be for the foreseeable future, refund checks…
Colorado Legislative Council said the state’s economy also has fared better than expected in the final months of the 2021-22 fiscal year, which ends June 30. As a result, the nonpartisan office expects Colorado taxpayers will get TABOR refund checks of $750 per individual filer and $1,500 for joint filers starting in late August. [Pols emphasis] (People who file their returns after June 30 will have to wait several months longer to receive their refund checks.)
As readers know, TABOR requires the state to refund “excess” revenue over the law’s prescribed limits to taxpayers. In most years when economic conditions were good enough to trigger refunds, the average Colorado resident would receive a tiny sales tax refund check–in 2021 averaging $69 per taxpayer, along with other indirect refund mechanisms like reducing the income tax rate. Senate Bill 22-223, a single-year TABOR refund plan, made the checks equal for everyone, which had the effect of routing much more money to lower income levels. In addition, the law pays out the refund this summer instead of next spring, which is the pretext for Republicans calling the bill an “election season giveaway.”
We don’t know anybody who likes waiting for money. And if it was about the election, the checks would arrive in October.
Does this mean Democrats have suddenly become TABOR fans? Certainly not. But while TABOR remains on the books, redistributing the “excess” revenue the law forces the state to refund irrespective of need to better benefit working families is a far better outcome than giving rich people big checks and regular people checks so small they’re practically an insult. The latest economic forecast doesn’t predict a recession in the immediate future for Colorado, but the lean times will most certainly return–and when they do, TABOR will still be dictating fiscal policy to today’s lawmakers instead of allowing them to do their jobs.
In short, Democrats took one of Colorado’s most regressive constitutional provisions and redirected it to do something relatively progressive: helping many more people in a much bigger way. Republicans can’t really complain about what will prove to be a very popular plan when the checks arrive, even though the formula that made this a much more lucrative stimulus for regular taxpayers wasn’t their idea.
2022 will be remembered as the year TABOR finally did some good despite itself.