TABOR Refunds

As a result of the newest state revenue forecast lots of folks are talking about TABOR and TABOR refunds as a result of our thriving economy.

In his article in Colorado Sun “How much Colorado taxpayers will get in TABOR refunds…”

reporter John Frank writes:

“… in years with major excess revenue collections, a temporary individual and corporate income tax rate cut is triggered first, reducing the rate from 4.63% to 4.5%.  It’s never happened since it was created in 2005, but it will take place in the 2019 tax year.  The total refund is estimated between $446 million and $575 million, according to the two forecasts, and taxpayers will see the break in calendar year 2020.”

“In calendar year 2021, the TABOR refund is estimated at $310 million to $412 million, and in 2022 it i projected at $342 million to $623 million.  In both these years, the refunds will go toward property tax breaks and sales tax refunds, but no income tax cut because it’s not large enough.”

Frank also points out:  “…it’s important to note that economists expect the state’s economic growth to slow and other uncertainties, including tariffs, cloud the projections. The next forecast is released in September.”

Before everyone starts celebrating, we would ask you take note of how underfunded our state’s infrastructure and services are, because of TABOR (See CPR’s The Taxman below)

After the 2019 Legislative Session, Colorado’s Budget Stabilization Factor/Negative Factor (the money owed our schools) sits at $572 million.   The aforementioned  refund for calendar year 2020 sits in the range of $446 million and $575 million. Imagine, just like that, instead of issuing the refund, we could wipe out the dollars long owed to our schools.

It would seem foolish to issue refunds when we could use that money to fund our long underfunded public schools.  Especially, since it’s such a struggle to find every single dollar distributed to schools during each legislative session.

The Colorado School Finance Project provides lists “by county, district as of May 2019 eleven (11) years of Colorado K-12 school funding cuts (2009/10-2019/20).

Total lost revenue $8,129,000,000”

For a more detailed picture, this is where we are today:

  • Since the Great Recession, the amount owed to our public schools has exceeded $7 billion ($7.5 billion to be exact)
  • Depending on the source, Colorado spends between $2,000 – $2,800 less per pupil than the National Average
  • Reaching the National Average would cost $2.1-$2.8 billion
  • 104 of the state’s 178 school districts have one or more schools on a four day week
  • Colorado ranked 42nd in per pupil spending (ranked further down the list on per pupil funding)
  • Colorado ranks last in the country in wage competitiveness for teachers

But public education is not the only large underfunded infrastructure our state has.  Transportation needs have suffered a long time as well.   You may remember last November (2018) while Amendment 73 was on the ballot to fund public ed, the transportation community had 2 ballot measures to try to get the much needed funding.  Remember Prop 109 and Prop 110 on the November 2018 ballot  (neither of which passed):

From this KDVR story:

“We will be starting from zero yet again next year, relative to a $9 billion challenge this state is facing,” Hagen Solin said.

Colorado Department of Transportation shared the following estimates with Fox 31 for typical infrastructure improvement costs across the state, saying the cost varies depending on location:

  • Paving one mile of roadway/highway:  $1.5 million for one lane/one direction
  • One mile of widening: $2 million for one lane/one direction
  • A new intersection: $3.5 million
  • One mile of guardrail: $300,000
  • Filing postholes: $60 per square yard

We all paid in taxes with the understanding these are the dollars that will fund our schools, build and maintain our roads, provide human services, etc.  Isn’t it time to take another look at how our state does things if we are sending those dollars back, but leaving all of these things severely underfunded with no option but to spend millions of dollars to run statewide campaigns to ask taxpayers to increase the taxes they are now getting refunded?

Take the time to learn more about how TABOR works.  Colorado is the only state in the Union with a law on the books that doesn’t allow the state or its legislators to take care of its citizens.