DENVER (AP) – Colorado residents will benefit from the growing state economy with special tax refunds next year, but exactly how much is a question lawmakers will wrestle with over the coming months.
Whatever the figure ends up being, it’s leaving lawmakers scratching their heads over how they’ll be able to fund some pending legislation this year.READ MORE: FBI Denver Believes Gabby Petito's Body Has Been Found In Wyoming
The state’s quarterly forecasts released Wednesday from legislative and governor’s office economists showed lawmakers they will have to refund anywhere from $70 million to $220 million in tax year 2016. Those refunds are triggered by the state’s Taxpayer’s Bill of Rights, which calls for refunds when revenue exceeds the combined rate of inflation and population growth.
Lawmakers haven’t dealt with refunds in a decade.
Sen. Kevin Grantham, a Republican on the budget-writing Joint Budget Committee, said they’re “still in wait-and-see mode.”
“The economy is going up, we knew it was going to bump up the surplus, and it was always just a question of how much,” he said.
Legislative economists arrived at the lower refund estimate of $70 million, while the governor’s office predicted $220 million because they’re projecting higher income growth and more collections from severance taxes, which mining and drilling companies pay.
For the following tax year, the refund predictions from economists are nearly identical: Between $117 million and $120 million.
All of those predictions could be adjusted with the next quarterly forecast in June.
The more immediate impact from the refunds will be on the annual budget lawmakers will vote on in the coming weeks. State revenue is increasing, but TABOR refunds and other obligations mean lawmakers have only about $50 million to fund pending bills, according to legislative economists. One big-ticket item seeks to increase penalties for repeat DUI offenders, a proposal that has failed previously over funding concerns.READ MORE: Rollover Crash In Colorado Springs Kills Active Duty Air Force Airman
“We’re going to have to get through the budget process before we can talk about proposals for new laws that require new spending above and beyond our budget,” said Democratic Sen. Pat Steadman, another JBC member.
Longer term, the refunds pit both parties in a philosophical debate over how much government should be allowed to grow as the economy improves.
Democrats have long blasted TABOR spending limits as restricting government’s ability to make investments in services, particularly when the economy rebounds after years of cuts during recessions.
“All we’re going to be able to do is barely keep up with just inflation and growth in programs and really not even that. That’s the real crisis,” Steadman said.
Republicans, meanwhile, favor TABOR and see it as a needed check on overzealous government spending during economic booms.
“I’m glad that we can actually give money back to our taxpayers,” Grantham said. “It’s not necessarily a popular sentiment, but they’re the ones that make this state go, and sometimes it’s good to give it back.”
The TABOR refund totals can change, but for now the projected amount each taxpayer can expect to receive when they file taxes in 2016 is anywhere from $28 to $89 depending on their income, according to the forecast from governor’s economists. Lower-wage earners will also qualify for an additional earned income tax credit.
State government can only keep the refund money if voters approve it through a ballot question.
– By Ivan Moreno, AP WriterMORE NEWS: 4 Large COVID-19 Vaccination Sites Opening This Week In Colorado
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