Colorado taxpayers should see hefty refund checks

Lawmakers’ pay inﬂuences debates and votes on bills

BY JESSE PAUL THE COLORADO SUN

Colorado taxpayers will be sent even larger refund checks next year than expected after state tax revenues nished the scal year much higher than budget analysts for the legislature and in the governor’s o ce predicted.

e state may now have to refund nearly $1 billion more than originally expected, nonpartisan Legislative Council Sta and the governor’s O ce of State Planning and Budgeting told state lawmakers in June, increasing refund checks by hundreds of dollars per person.

Exactly how large those Taxpayer’s Bill of Rights refund checks will be remains in ux, in part because the number will be determined by whether voters pass Proposition HH in November, a 10-year property tax relief plan from Democrats in the General Assembly and Gov. Jared Polis.

e legislature passed a bill in the nal three days of its 2023 lawmaking term, which ended May 8, that would make the refund check amounts the same for everyone if voters pass Proposition HH. ey were originally expected to be about $650 for single lers and roughly $1,300 for joint lers, but could now be roughly $850 for single lers and $1,700 for joint lers.

Last year, Colorado taxpayers received TABOR refund checks of $750 or $1,500 to account for surplus collected in the 2021-22 scal year, which ended June 30, 2022.

If Proposition HH fails, the refund checks would be tied to income levels. Under the default refund system — called the six-tier sales tax refund mechanism — people who make more money get bigger refund checks based on which of six income tiers they fall into.

People in the lowest tier, who make up to $50,000 a year, were expected to receive refund checks of $454 for single lers or $908 for joint lers. For those in the highest tier, who make $279,001 or more, the checks were expected to be $1,434 for single lers and $2,688 for joint lers. e improved economic outlook would mean larger refunds for people in every tier, though people in the top tier would bene t most. e refund amounts are determined by how much money the state government collects above the TABOR cap on government growth and spending. e cap is calculated by annual growth in population and in ation. Colorado taxpayers will get their refund checks next year after they le their taxes. e governor’s O ce of State Planning and Budgeting now expects the TABOR cap to be exceeded in the current scal year by $3.527 billion — an increase of about $870 million over what they projected in March.

People in the lowest tier would now receive refund checks of $587 for single lers or $1,174 for joint lers. For those in the highest tier, the checks would now be $1,854 for single lers and $3,708 for joint lers.

Nonpartisan Legislative Council Sta now expects the TABOR cap to be exceeded in the current 2022-23 scal year, which ends June 30, by $3.31 billion — an increase of roughly $600 million over what they projected in March.

Greg Sobetski, the chief economist for Legislative Council Sta , called the increases a “signi cant upward revision.” e updates were presented to the legislature’s Joint Budget Committee, which received its quarterly economic and tax revenue forecasts from LCS and OSPB. While the end of the scal year is fast approaching, it will be months before the state knows exactly how much money it collected over the TABOR cap.

Both LCS and OSPB said betterthan-expected corporate income tax revenue was a large driver of the improvements.

Legislative Council Sta and the governor’s O ce of State Planning and Budgeting forecasts state government to collect tax revenue in excess of the TABOR cap through at least the 2024-25 scal year, which ends June 30, 2025.

Emily Dohrman, an economist with Legislative Council Sta , said the risk of recession has also decreased.

“ e economy is still showing positive growth, but slower growth than what we saw through most of 2022,” she told the JBC. “Our forecast is anticipating that growth will continue to slow through the end of 2023 but then return to a more moderate pace of growth in 2024 and 2025.”

She said there’s still a risk of an economic downturn, but that risk is lower

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Polis touted the forecasts presented to the JBC. He said Colorado’s economy remains strong and that it’s evidence the state “continues to be the best place to live, work and do business.” e next quarterly tax revenue and economic forecasts will be presented to the JBC in September. e panel in November will begin drafting the state’s 2024-25 scal year budget, which takes e ect on July 1, 2024. e full legislature will vote on the spending plan after it reconvenes in January. is story via e Colorado Sun, a journalist-owned news outlet based in Denver that covers the state. For more, visit www.ColoradoSun.com. e Sun is a partner in the Colorado News Conservancy, which owns Colorado Community Media. discretion. Letters are published as space is available.

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Thu 7/06