DENVER (KDVR) — Colorado is rocketing out of the pandemic’s doldrums, and Coloradans will stand to reap the rewards.
The State Office of State Planning and Budget released a cheery forecast and update on the Centennial State’s economic outlook. In sum, the state is doing better than officials thought it would. Driven by pent-up consumer demand and high savings, Colorado’s jobs growth and spending have roared back enough to create a budget surplus. Under Colorado law, this will be returned to Coloradans.
“The actual economic results so far this year are well above expectations,” said Gov. Jared Polis in a release. “As long as this year finishes out strong, there is some terrific news on the horizon: Not only will Coloradans get another income tax cut next year, but every Colorado taxpayer will also get a tax refund.”
Under the Colorado Taxpayer Bill of Rights, or TABOR, the state has a cap on how much taxes it can collect. It has to return anything past that cap back to taxpayers in the form of an income tax reduction from 4.55% to 4.5%, a targeted property tax reduction or a sales tax refund.
“Every taxpayer will get a refund check. Every Coloradan who pays taxes will get about $30-120. We’ll know the exact amount in November. If the economy stays strong, it could certainly be in the mid to high range of that. And the income tax will come down for next year,” Polis said.
According to the forecast, the state will collect $2.8 billion more than its legally allowable tax revenue in the next three years, and Coloradans will see a refund as a result.
Two of these surpluses are projected to be the largest since TABOR was passed in 1992.
Tax revenues have gone up in the last 30 years as Colorado grew wealthier and more populous.
Democratic Rep. Leslie Herod is on the state’s joint budget committee. She said members are already thinking about how to divvy up the dollars.
“We’re feeling pretty optimistic about the Colorado’s future but we have to remember, and we have to make sure that the prosperity felt in Colorado is felt by everyone. Right now, richer are doing well and the poorer continue to fall behind,” Herod said.
State Republicans are also positive about the revenue, but say it should not be “a justification to punish the incredible efforts of our citizens through higher costs of living like increasing taxes, fees, and tuition. Imagine how much better our state would be doing without the ongoing restrictions continuing to hold us back and weighing us down,” House Minority Leader Hugh McKean said.
Colorado general fund revenue has quadrupled from $3.3 billion 1992 to $12.6 billion in the 2019-20 fiscal year.
In that time, only six years passed the TABOR cap, including a $429 million surplus in 2019.
Before now, the largest TABOR refund on record was in 2000, when the state passed the cap by a $940 million. Both 2022 and 2023 will go past that with $1 billion and $1.1 billion, respectively.