Coloradans could get up to $2.5 billion in tax refunds

BY JESSE PAUL THE COLORADO SUN

Coloradans will receive more than $2.5 billion in tax refunds from the state as long as there isn’t a recession, according to two quarterly economic and tax revenue forecasts presented this month to the legislature.

An economic downturn is increasingly likely, however, given international nancial instability, including stubborn in ation and the banking industry’s headline-grabbing struggles over the past month.

Nonpartisan Legislative Council Sta said the state government will collect $2.75 billion in tax revenue in excess of the Taxpayer’s Bill of Rights cap on government growth and spending in the current scal year, which ends June 30. e legislature is required to refund that money.

e Governor’s O ce of State Planning and Budget expects the TABOR cap to be exceeded by $2.7 billion in the current scal year.

e cap, set by a 1992 constitutional amendment passed by Colorado voters, is calculated by multiplying the prior year’s limit by in ation and population growth rates.

e money will predominantly be refunded to taxpayers in April 2024 in the form of checks tied to people’s income — with higher refund amounts going to higher earners — as long as the legislature doesn’t change the refund formula this year, as it did in 2022.

e forecasts are provided to the Colorado General Assembly to help lawmakers draft the state budget for the next scal year. e data presented in March to the legislature’s powerful Joint Budget Committee, which drafts the budget, is considered the most important each year because it’s used to set spending.

e good news for the legislature is that it will have all the money it’s entitled to. e bad news is that the in ation rate used to calculate the TABOR cap lags current economic conditions. at means that while the legislature would seem to have more money to spend next year, the amount is actually lower than this year’s when adjusted for real-time population and in ation increases.

In fact, Greg Sobetski, chief economist for Legislative Council Sta , told the JBC that even without