Colorado taxpayers will receive about $650 or $1,300 in checks from the state next year under a last-minute bill introduced by Democrats in Congress on Saturday.
The measure is a departure from current plans to distribute about $2 billion in taxpayer Bill of Rights refunds by check based on taxpayer income level, and to remit more money to high-income earners. increase. Instead, the law, House Bill 1311giving all taxpayers the same refund.
Single filers will receive approximately $600 and joint tax filers will receive $1,200. Checks are mailed to taxpayers the following year after they file their tax returns.
With this change, the lowest-income Colorados would receive nearly $200 more than they would have earned under the default system, while the state’s highest earners would receive hundreds, if not more than $1,500. less dollars.
It’s been a year of course correction Voters Approving Another Property Tax Concession It’s ready to go to a November ballot, with three days left in the 2023 legislative session, and state legislators scrambling to work through dozens of other bills.
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It takes at least three days for the General Assembly to pass a bill. 2023 legislative period ends at 11:59 p.m. Monday
The bill, sponsored by Democrats Chris DeGruy Kennedy and Mike Weisman, and Democratic Senators Chris Hansen and Nick Hinricksen, is scheduled to go before the House Appropriations Committee on Saturday afternoon. The introduction of the bill came as such a surprise that when the commission hearings began, the bill was not posted on the Congress website.
House Republicans said they didn’t know House Bill 1311 was coming and were outraged. Watkins Republican Rep. Rod Bockenfeld said, “Fasten your seatbelts,” suggesting that Republicans would express strong opposition to the bill.
The change comes after The Colorado Sun reported Monday that the Democratic majority in Congress plans to allow refunds to be distributed through the default income-based system. Adopted by the General Assembly in 1999when the Republicans took charge.
Under this system, called the Six-Step Sales Tax Refund Mechanism, people who earn more money receive more refund checks in the mail. This idea assumes that people who make more money pay more taxes in a year.
By Saturday, the Democratic majority was set to allow refunds of money collected during this fiscal year ending June 30 to be distributed through a six-tier system. Even though they accuse the mechanism of being unfair, arguing that it should be done primarily to those who need it most.
What is TABOR?
The Taxpayer’s Bill of Rights (TABOR) is a 1992 constitutional amendment that requires voter approval for all tax increases in Colorado. It also imposes caps on government growth and spending and requires taxpayers to be reimbursed for tax revenues collected in excess of the caps. Caps are calculated using inflation and population rates.
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DeGruy Kennedy said he and Hinrichsen had planned to introduce measures to flatten TABOR refunds at the beginning of the 2023 legislative period, but the planned property tax relief measures in April were completed. He said he delayed the effort until it did. After all, the property tax bill wasn’t introduced until Monday.
“I decided to put it on hold because I wanted to understand how the two things interacted,” deGruy Kennedy said on Saturday. has finally been introduced.”
A Sun report earlier this week sparked criticism that the Democratic majority did not act to change course as it did last year. bottom.
In 2022, ahead of the November election, Gov. Jared Polis and Congressional Democrats made a one-year change, sending TABOR refund checks much earlier (August and September), with the amount based on It was the same amount for everyone instead. about income. Each Colorado taxpayer received $750 or he received $1,500, depending on whether they were single tax filers or joint filers.
The governor and Democratic state legislators celebrated the refund by naming the check the “Colorado State Dividend.”
The exact amount that Congress must return is fluid. The governor’s Office of Planning and Budget he predicted in March that the state would raise his $2.7 billion above her TABOR cap this year. (The amount will be refunded in April 2024.)
The amount is subject to change based on economic conditions. Congress also plans to tap potentially hundreds of millions of dollars in surplus funds. Expand tax breaks for families and low-income Colorados And to save people from the expected steep rise in property taxes. And finally, his TABOR refund of about $150 million automatically goes to local governments to account for property tax exemptions claimed by local seniors and disabled veterans. increase.
Ultimately, the surplus available for refund checks could be close to $2 billion, according to estimates by the Colorado Sun.
The nonpartisan Legislative Council staff said in March that under the six-tier system, Colorado taxpayers with adjusted gross incomes of less than $50,001 in 2023 would receive $480 for single filers, the lowest tier. I received a TABOR refund check and expected to pay $960 in taxes. When submitted jointly.
The LCS predicts that top tier people with adjusted gross income of $279,001 or more will receive $1,514 reimbursement checks for single filers and $3,028 checks for joint filing. I’m here.
The Bell Policy Center, a liberal-leaning fiscal policy nonprofit, calls the six-tier system unfair.that It pointed out By 2021, 79% of Colorado taxpayers will fall into the bottom three tiers.
Changes to the refund mechanism under House Bill 1311 will only occur if Congress also passes Senate Bill 303. In this bill, a 10-year property tax relief plan will be rolled out to voters in his November and will be called Proposition HH. In order for the Flat TABOR Refund System to take effect, voters must also approve Proposition HH.
If Proposition HH is not passed, TABOR refunds will be distributed through a six-tier sales tax mechanism.
DeGruy Kennedy said part of the thinking behind House Bill 1311 was to help tenants deal with rent increases caused by higher property taxes in Colorado resulting from a surge in home prices. said it is. Homeowners will get a break under Proposition HH and renters will receive a larger TABOR refund check under House Bill 1311.
DeGruy Kennedy said the bill was drafted in consultation with the office of Gov. Jared Polis.
This is a story in development that will be updated.