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Questions surround tax refunds

Carroll

DENVER – Leadership from both sides of the aisle in the Senate agree that it is not the Legislature’s place to ask voters to let the state keep surplus revenue.

The conundrum has to do with the Taxpayer’s Bill of Rights, a constitutional amendment that requires the state to issue refunds to taxpayers in the form of tax credits during times of budget surpluses.

Lawmakers were originally planning for refunds in the 2016 tax year. But better-than-anticipated economic growth suggested that the payments could be due as early as this spring.

State economists are still uncertain about how much would be refunded, but the estimated 2016 figure totaled about $137 million, or a $16 sales-tax credit for each taxpayer.

The uncertain future means that lawmakers may have to budget in the refunds this year or ask voters for permission to keep the money.

But on Monday, it appeared both Republicans and Democrats in the Senate were wary about referring a measure to voters. It would take a two-thirds majority to refer an initiative to voters.

“Any real solution on how we’re going to handle that is going to need and require the input of the voters,” said Sen. Morgan Carroll, D-Aurora, the Senate president who was demoted to Senate minority leader after Republicans took control of the chamber in the November election.

“The voters are probably going to be most skeptical of anything that is originating in this building,” Carroll added. “So, any solution here is likely going to have to be grass-roots, community coalitions that are coming together.”

Democrats have consistently criticized TABOR for limiting the Legislature’s ability to make investments in the state, while Republicans have generally defended the constitutional amendment as a critical tool to curb excessive government spending.

Sen. Bill Cadman, R-Colorado Springs, who will take over as Senate president when the Legislature convenes Wednesday, said he was “pleasantly surprised” to hear that Democrats were not comfortable with referring a measure to voters.

“The bipartisanship is building early,” Cadman joked.

“There’s a lot of legal opinions being generated right now on how to maneuver those issues. The decision is around what’s fair,” he said.

Lawmakers also are grappling with an entirely separate TABOR refund issue concerning marijuana. A refund could be triggered from marijuana tax revenues, generated from a 25 percent total tax assessed on sales and excise. It remains unclear just exactly how much that refund would be.

Voters in 2013 approved Proposition AA, which authorized the taxes to fund regulatory enforcement and education. But because total state revenue is higher than projected, the state could be required to refund the money being collected.

Cadman and Carroll believe the marijuana refund is a separate issue, and so they are willing to discuss sending an initiative to voters to keep the money.

“The marijuana money needs to be used for what it was promised to the people of Colorado,” Cadman said.

“I feel less certain about what’s going to happen with the marijuana issue,” Carroll said. “We have heard from the voters, who actually thought they were allowing this revenue to be raised and retained for certain specific, explicit purposes.”

pmarcus@durangoherald.com

Jan 5, 2015
Lawmakers outline their agendas


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