By Rocky Mountain Voice Staff
As a result of 101 bills passed by the Colorado legislature, over $2.8 billion in state TABOR refunds will not be distributed to Colorado taxpayers between 2024 and 2026, according to a recent report from the Common Sense Institute (CSI). This amount represents nearly half of the projected $6 billion in TABOR refunds expected over the next three years.
Key Findings:
- The $2.8 billion loss in TABOR refunds is attributed to various tax cuts and the costs of bills impacting TABOR. The legislature’s actions during the 2024 session have significantly redirected funds meant for taxpayer refunds.
- CSI’s report indicates that TABOR refund cuts will increase over the next three years, with reductions of $523 million in 2024, $1.06 billion in 2025, and $1.25 billion in 2026.
- The redirection of TABOR dollars occurred amid significant revenue growth and a $40 billion state budget. Legislators used tax rate reductions, tax credits, and distribution efforts to circumvent standard refund mechanisms.
- Most of the redirected funds from the 101 bills targeted families and low-income Coloradans through tax rate reductions, tax credits, and redistributive measures.
Statements from CSI:
- Lang Sias, CSI Fellow: “Legislators focused intensely on TABOR refunds this session. What started a few years ago has snowballed into the redirection of more than 100 bills during the 2024 session.”
- Chris Brown, VP of Policy & Research: “Lawmakers circumvented the standard refund mechanisms through a long list of proposed tax rate reductions, tax credits, and distribution efforts. This undermines TABOR’s intent by divorcing taxpayers’ contributions from the refunds they receive.”
Remaining Funds:
- Of the remaining $3.28 billion, $3.1 billion will be distributed as direct payments of $800 to each Colorado taxpayer.
- An additional $180 million is allocated to the Earned Income Tax Credit, approved during the previous legislative session.
Historical Context:
- Last November, Colorado voters rejected Proposition HH, a proposal to exchange TABOR refunds for property tax relief.
- Recently, due to an accounting error, a separate $67 million in TABOR refunds is set to be sent back to Colorado taxpayers.
CSI’s report highlights concerns that the recent legislation diminishes taxpayers’ agency to decide how to allocate money they are owed, whether through saving, investing, or donating to charity. The legislative actions have sparked debate over the future of taxpayer refunds and the use of state revenue.