Oh, the irony of Republicans in Congress passing a large federal tax minimize that may really present Colorado with a boon in state tax income, and solely a yr after state GOP lawmakers shot down a proposal to ask voters for a devoted income stream to fund the $9 billion backlog of transportation wants.
The state’s prime economists estimate the federal adjustments in tax code which can be sitting on President Donald Trump’s desk would really enhance earnings tax income in Colorado by an estimated $196 million to $340 million a yr starting in fiscal yr 2018-19.
Which means the newly handed tax invoice would generate extra money than the gross sales tax increase proposed by a bipartisan group of Colorado lawmakers earlier this yr to fund transportation wants. Republicans within the state Senate refused to ship that tax enhance to voters. However this new income would come with out that tough hurdle. Thanks, Congress!
All joking apart, Colorado’s state authorities wanted and desires extra income.
Lawmakers handed Senate Invoice 267 final session utilizing a intelligent accounting trick to permit the state to spend $1.9 billion over the following 4 years that in any other case would have been returned to taxpayers by way of TABOR refunds. It’s vital to notice that with out that compromise (pushed by Senate President Kevin Grantham, a Republican, and Home Speaker Crisanta Duran, a Democrat), most if not all the Trump tax windfall would have needed to be refunded below the Taxpayer’s Invoice of Rights.
The cash put aside by SB 267 for roads, transit and bike lanes, nonetheless, will barely make a dent on this state’s infrastructure wants.
Grantham and Home Minority Chief Cole Wist are proper to name for the lion’s share of the brand new cash to go to transportation wants. Discovering a brand new income supply for transportation now would make no sense when Congress has handed the state a present simply in time for Christmas.
There are lots of competing wants within the state’s discretionary finances: our training system, each Okay-12 and our state universities and faculties, has been underfunded for greater than a decade. But, along with the brand new income anticipated from the tax invoice, Colorado’s financial system has been buzzing alongside at a tempo that allowed Gov. John Hickenlooper to suggest an preliminary finances with beneficiant will increase to training whereas additionally setting apart extra money for the state’s emergency reserves.
In keeping with the state income forecasts launched Wednesday, there may be anticipated to be important cash on prime of Hickenlooper’s unique finances for fiscal yr 2018-19. The Workplace of State Planning and Budgeting estimated, even with out taking into account the Trump tax invoice, an additional $179.2 million this fiscal yr and $106.6 million subsequent fiscal yr. Colorado ought to save a lot of that cash for the following recession whereas investing much more in training than Hickenlooper’s first proposal.
All of that is to say that Colorado lawmakers did vital work in 2017 establishing the state to be able to capitalize on this time of prosperity. We all know some will nonetheless begrudge the state this cash, wishing as a substitute that taxpayers could be getting refunds by way of TABOR caps. However that’s a short-sighted view. It’s vitally vital for this state to put money into infrastructure for our future and to make sure reserves are sound sufficient to climate financial downturns which can be definitely on the horizon.