DENVER – A continued rosier revenue picture for Colorado means taxpayers could be receiving a refund in the coming years.
Gov. John Hickenlooper’s economists Monday presented the September revenue forecast to lawmakers – during a meeting of the Joint Budget Committee – pointing to expected growth of 7.4 percent in fiscal year 2014-15, and 6.4 percent in fiscal year 2015-16.
Projections show an increase of $80.9 million in 2014-15, or 0.8 percent higher compared with the June 2014 forecast. Projections for 2015-16 are 1.3 percent, or $131 million higher.
“Colorado’s economy continues to expand at a pace that is among the best in the nation,” the governor’s budget office stated in its report.
Henry Sobanet, director of the Governor’s Office of State Planning and Budgeting, described the economy as “one of the best in the country.”
Budget gurus highlighted a concentration of individuals and businesses focused on products that are in high demand. They also pointed to a “growing culture for innovation and collaboration among individuals and firms.”
Much of the revenue picture emerging after the economic downturn comes from income taxes wage withholdings and sales-tax collections that continue to grow.
The state’s general fund reserve is projected to be nearly $233 million above its required amount for 2014-15, according to the governor’s budget office.
The Legislature’s economists reported similar numbers. Revenue forecasts include presentations by the governor’s office and legislative economists.
Natalie Mullis, the Legislature’s chief economist, said general-fund revenue is expected to rise by $128.5 million in the 2014-15 fiscal year, which began July 1.
Revenue under the Taxpayer’s Bill of Rights, or TABOR, is forecast to exceed a state cap by more than $133 million in fiscal year 2015-16 and more than $239 million in fiscal year 2016-17.
The projections indicate that a refund would be required to taxpayers unless voters allow the state to keep the revenue.
Mullis also highlighted that marijuana revenue has not changed. The state collects a combined tax of 25 percent on sales and excise taxes related to cannabis sales, in addition to the usual state sales tax of 2.9 percent.
Since the June forecast, revenue from marijuana stands around $30.5 million.
But the infusion of money, coupled with other positive economic indicators, adds to discussions about a refund.
“What has changed is other state revenues unrelated to marijuana taxes, but because those revenues are increasing, we’ll owe a refund on the marijuana tax,” said Sen. Pat Steadman, D-Denver, a member of the JBC. “It’s not marijuana tax collections ... that’s driving the refund, but in fact, it’s everything else going on with the state budget.”
How TABOR works
Colorado’s voters approved the Taxpayer’s Bill of Rights as a constitutional amendment in November 1992.
The measure limits taxing and spending increases by the state and local agencies to the level of inflation plus the percentage growth in population. For instance, if inflation is at 2 percent and population is at 1 percent, the state can increase spending and taxing by 3 percent.
Revenue from taxes collected in excess of the constitutional amendment’s limit must be refunded to the taxpayers.
The state can ask voters to allow it to keep revenue beyond the limits set in the amendment.
Center on Budget and Policy Priorities
