New economic forecasts are out from the governor’s Office of State Planning and Budgeting and the Colorado Legislative Council Staff.
While both paint a picture of a strong Colorado economy, some are warning the outlooks could change if two possibilities come to fruition in the near future.
Colorado is seemingly doing well but there is a possibility the nation could see a recession. Some lawmakers are worried about that and two items on the ballot you will be voting on soon.
State finances are in good enough shape for leaders to prepare to send another refund next spring.
OSPB leaders said thanks to 2022 revenues exceeding the TABOR cap, $677 million worth of TABOR refunds will be sent out in April with an average refund of around $250.
Some members of the state’s Joint Budget Committee are worried those rebates and extra dollars could be greatly reduced if two measures on this year’s ballot pass.
The second is Proposition 121. It’s a proposal to reduce the state income tax rate from 4.55% down to 4.40%. Some lawmakers on the Join Budget Committee argue that passing this measure while the inflation rate is high could deplete those dollars that exceed the TABOR cap but supporters of the proposal say passing 121 would not stop the state from doing that.
“We cut the income tax two years ago in 2020 and since then, we’ve had more government revenue than ever. We’ve never had TABOR refunds that are this big. So to say that just because there is a cut government is without that money, that’s not necessarily the case if we’ve had growth and we’ve seen growth in Colorado. So basically you can put more money in people’s pockets and still take care of the needs that the state has,” said FOX31 Republican political analyst Michael Fields.
Other supporters said the measure was meant to help Coloradans keep more money upfront.
“Why are we going through this silly thing of collecting all these taxes so that the government can hold on to it all the time and then go through the expense of refunding it later? The idea is to try to avoid that,” said Jon Caldara, Independence Institute President.
The Legislative Council estimates a loss of $43 per taxpayer refund in 2023 and $86 per taxpayer refund in 2024 if Proposition 123 passes. Proposition 121 would lower the state income rate and reduce the amount returned to taxpayers but, the council projects taxpayers would pay 3.3 less in state income tax; the dollar amount would vary by income.