The Colorado legislature will debate a bill this year that would ask voters in November to waive their future Taxpayer’s Bill of Rights refunds and earmark the money, potentially billions of dollars each year, to public education.
The forthcoming measure, sponsored by state Rep. Cathy Kipp, a Fort Collins Democrat and former Poudre School District board member, and state Sen. Rachel Zenzinger, an Arvada Democrat who has worked as a teacher, is sure to face pushback from Republicans, who are fierce defenders of TABOR refunds. There could also possibly be opposition from some fellow Democrats, including Gov. Jared Polis, who would like to see the money spent elsewhere.
“We need to pay our teachers,” Kipp said. “We need to fund our schools. We do not fund our public schools adequately. TABOR is a part of that.”
TABOR requires voter approval for all tax increases in Colorado and it also caps government growth and spending, mandating that tax revenue collected in excess of the cap be refunded to taxpayers. In the case of state government, the legislature decides how the refunds are distributed. Last year, Coloradans were mailed checks of $750 or $1,500 after the state collected more than $3 billion over what the cap allowed.
The TABOR cap is forecast to be exceeded in the current fiscal year, which began July 1, by more than $2 billion. That money also would have to be refunded to taxpayers.
But TABOR also lets local governments and the state ask taxpayers to eliminate the cap so that they can keep the excess revenue. In 2019, voters rejected Proposition CC, which would have let the state keep TABOR surplus. The measure failed by 8 percentage points.
Since TABOR surplus can vary from year to year – in some years there may be no surplus at all – Kipp calls her bill a “Band-Aid” until Colorado comes up with a dedicated funding source for schools, which would likely be through a tax increase.
“This is not long-term sustainable funding,” Kipp said. “But I joined the legislature so we could figure out how to properly fund our public schools. I am looking for solutions. And this is one of them – potentially.”
Zenzinger said the idea stems from a proposal from Great Education Colorado, a group that advocates for more funding for schools.
Kipp said that if a long-term, sustainable funding source for schools is identified, the legislature could vote in the future to repeal the TABOR surplus school funding mechanism.
The legislature is supposed to increase annual per pupil funding at the rate of inflation under Amendment 23, a measure passed by voters in 2000. But in the wake of the Great Recession, state lawmakers in 2010 adopted the budget stabilization factor – sometimes also referred to as the negative factor – which allows the General Assembly to allocate to schools each year less than what they are owed. The I.O.U. persists today.
Additionally, teacher pay has been a persistent area of complaint in Colorado, with districts recently struggling to attract and retain educators.
Republicans and conservative groups are already lining up against Kipp’s proposal.
State Sen. Barbara Kirkmeyer, a Brighton Republican, said the legislature should shift its funding priorities and send more money to schools rather than ask voters to waive their TABOR refunds.
“I think we should follow the Constitution and fund it like we’re supposed to,” she said. “Not with TABOR refund dollars.”
Michael Fields, a conservative fiscal activist with the political nonprofit Advance Colorado Institute, said the legislature has already invested more money in schools.
“The problem is that not enough of that money is going to teacher pay. We need better outcomes and more accountability with the billions of dollars we are already spending on education,” he said. “With the cost of living higher than ever, Colorado families want their TABOR refund checks.”
Meanwhile, Polis said in November that he wants a TABOR surplus to be used to drive down Colorado’s income tax rate. He supported Proposition CC in 2019, but since then hasn’t publicly advocated for the state to ask voters again to keep TABOR surplus. Since Kipp’s bill would be a referred measure, Polis’ signature on the measure wouldn’t be needed and thus he couldn’t veto it. It would only need a simple majority to pass, and Democrats control both the House and Senate by wide margins.
Kipp and other Democrats who support the legislation, which is expected to be introduced as soon as this week, will also likely be called hypocrites since they celebrated TABOR refunds last year ahead of the November election. Polis held multiple news conferences during which he enthusiastically publicized the checks Colorado sent to taxpayers.
Kipp even voted for a bill the legislature passed in 2022 facilitating the refunds and making them a flat rate opposed to being tied to income levels as prescribed in law. The bill also prompted the state to pay out the checks in August and September rather than in April 2023, which is when they would normally be distributed.
“That was a one-time, equitable distribution of the refund,” she said, highlighting how TABOR refund checks have generally been much smaller if they even happen at all. “People generally get very small amounts of money back. And what could we do with all that money if we put it together? We could do a lot of good things for public education. That’s what we’re trying to do.”
Kipp’s bill wouldn’t affect the TABOR surplus used to reimburse local governments for any property tax exemptions claimed by local seniors and disabled veterans. It also wouldn’t touch the roughly $300 million in TABOR surplus set aside each year for affordable housing by Proposition 123, which voters approved Nov. 8.