DENVER (KDVR) — Federal COVID relief is spilling into the public’s hands in Colorado this year.
Gov. Jared Polis announced today that over 3 million Coloradans who file taxes by May 31 will receive a $400 tax refund. Joint filers will get $800. Checks will come either in August or September of 2022.
The checks have their origin in a long-time Colorado state budgeting rule.
Under the Colorado Taxpayer Bill of Rights, also known as 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.
In response to the COVID pandemic, $66 billion worth of federal relief funds gushed into Colorado’s state and local governments. Colorado has posted a TABOR surplus in each of the last three fiscal years.
State general fund revenues have more than doubled in the last ten years as people and businesses poured into the state. The governor’s office most recently forecasted billions of extra dollars in the state budget in upcoming years.
“After exceeding the Referendum C cap (as restored by S.B. 21-260) by $547.9 million in FY 2020-21, revenue subject to TABOR is expected to remain above this cap through the duration of the forecast period,” reads a report from the governor’s Office of the State Budget. “Current projections show that revenue will be $2,229.2 million above the cap in FY 2021-22, $2,029.2 million above the cap in FY 2022-23, and $1,328.2 million above the cap in FY 2023-24, triggering the temporary income tax rate reduction in each year.”
In total, the fiscal years overlapping the COVID pandemic and its aftermath created $6.1 billion of state revenue in excess of the TABOR cap.