Colorado taxpayers could soon see almost $40 million total in refunds, according to a government forecast.
The Legislative Council’s forecast said revenue collected by the state that exceeds the Taxpayer’s Bill of Rights (TABOR) limit means that $39.8 million for fiscal year 2018-19 could be refunded to taxpayers. The forecast also said the TABOR refund could trigger an income tax reduction.
TABOR requires voter approval for all tax hikes and limits government growth. It also initiates refunds to taxpayers when the government's revenue increases faster than population growth plus inflation.
The state’s General Fund is estimated to see a $270.7 million increase so far in 2018-19, according to the Office of State Planning and Budgeting revenue forecast.
“The FY 2018-19 surplus is expected to exceed the amount that can be refunded via FY 2019-20 reimbursements for property tax expenditures, triggering both a temporary income tax rate reduction and sales tax refund on 2019 tax forms filed in the first half of 2020,” the Legislative Council’s forecast said.
Polis’ office estimates that single filers will average a $40 refund in 2019-20, a $69 refund in 2020-21, and an $89 refund in 2021-22. Joint filers would average a $79 refund in 2019-20, a $139 refund in 2020-21, and a $246 refund in 2021-22.
Colorado’s strong employment and wage growth are factors that have encouraged consumer spending, leading to the increased revenue for the state fund, but growth is expected to moderate in the coming years.
TABOR, a constitutional amendment approved by voters in 1992, has been a primary target of Democrats in the legislature.
This week the Colorado Supreme Court paved the way for a proposed ballot initiative that seeks a TABOR repeal to move forward.
Democrats also passed legislation to put an initiative on the ballot in 2019 asking voters if the state government can keep TABOR refunds.
The initiative, called Proposition CC, is being opposed by a coalition of individuals and groups under the name “No on CC,” which called the forecasted TABOR refund “encouraging” but “not a guarantee.”
“Proponents of Proposition CC want Coloradans to permanently forego receiving refunds on their hard-earned tax dollars that they never owed to begin with. Worse yet, the measure would permanently eliminate spending caps on government,” said Amy Oliver Cooke, executive vice president of the Independence Institute and a member of the coalition. “Whether it’s one dollar or a billion in any given year, Proposition CC is a tax hike which would have no guarantees in terms of funding the projects its supporters might prioritize at any given time. Coloradans should look at today’s news as further evidence that our Taxpayer’s Bill of Rights is designed to protect their pocketbooks, and that Proposition CC is a grave danger to these Constitutionally-guaranteed protections.”