DENVER (AP) – Colorado’s growing economy means tax refunds are on the horizon for residents.
State economists told lawmakers Monday that projections for tax collections continue increasing and they need to budget for refunds mandated by Colorado’s Taxpayer’s Bill of Rights, also known as TABOR. It calls for refunds when revenue exceeds the combined rate of inflation and population growth.READ MORE: Colorado Weather: Winter Weather Advisory For The Front Range
The first refunds are expected to happen in 2016, and economists told lawmakers they need to budget about $130 million for that in next year’s budget. The following year, lawmakers have to budget anywhere from $239 million to $393 million for refunds.
While that’s an indicator of better economic times, the growing revenue pie can also highlight the ideological divide over TABOR, which Republicans favor and Democrats often criticize.
Supporters of the 1992 voter-approved constitutional amendment see it as forcing state government to be prudent with spending even during economic expansions, while opponents see it as restricting investments in schools, transportation, and other services when more money is available.
The last refunds happened about a decade ago.
“I think for a few years I’ve been telling you all that there would come a point and time when the economy is trucking – at least in Colorado it feels like it’s trucking – but the budget is going to hit the TABOR limit and that means that there will still be tough budget decisions to be made. And we’re there,” said Natalie Mullis, chief economist for the Colorado Legislature.
Mullis’ quarterly revenue forecast was one of two presented to lawmakers Monday. The other was from the governor’s economists. Both had similar projections, saying Colorado revenue continues to exceed expectations because of strong sales and income tax growth.READ MORE: Mauricio Anchondo-Olivas Sentenced To Life In Prison For Murder Of Former Roommate
Recreational marijuana taxes may also trigger refunds, barring legislative action, even though pot revenue is nowhere near the estimate voters received when they approved the taxes in 2013. Instead, the refunds would occur because of the overall rise in state revenue and because of a TABOR provision regarding new taxes.
Voters approved the pot taxes for school construction and enforcement and prevention programs. So far, the taxes are estimated to generate about half the $70 million predicted.
“People voted for this, people wanted it, and TABOR’s going to give them their money back and not let it do any of the things they wanted it to do,” said Sen. Pat Steadman, a Denver Democrat who is one of the state’s budget writers.
Steadman said if lawmakers refund the marijuana tax money, they’ll have to cancel spending they approved with the new revenue or dip into the state’s general fund to make up for it.
With refunds looming, lawmakers returning to the state Capitol in January can expect pressure from interest groups to try to keep the additional revenue by putting the question to voters, as TABOR requires.
– By Ivan Moreno, AP WriterMORE NEWS: PHOTOS: Cheesman Park Homes & Governor's Mansion Vandalized With Spray Paint
(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)