Colorful Commentary

Raise the Sales Tax, Fund Roads, and Provide Affordable Transit; CFI’s Take on HB17-1242

Posted March 29, 2017 by Chris Stiffler

by Chris Stiffler

CFI Economist

commuting trafficHouse Bill 17-1242, which would ask voters to approve a sales tax increase to provide additional funding for roads and transportation, is working its way through the Capitol. If passed by voters, the current state sales tax rate of 2.9 percent would increase to 3.52 percent.

The sales tax increase would generate an additional $651 million for Colorado in 2018. (It’s interesting to note, that the revenue from this sales tax increase is almost equal to the amount of revenue lost this year by cutting the income tax rate from 5% to 4.63%, as the legislature did in the late ’90s.).

If we want more revenue for transportation, raising new revenue is the only option. Cutting from other parts of the state budget is the wrong track. Right now, our state’s constitutional restraints on revenue force us into awkward budget dilemmas. Our economy is growing but our elected leaders can’t use the revenue that comes from normal economic growth to fund the priorities that build thriving communities. Instead we trade cuts for schools for cuts in long-term care for seniors.  We eke out a road budget as we try to keep tuition affordable.

These are false choices that lawmakers have been forced to make for years amid a backdrop of  an outdated tax code coupled with forced tax rebates. This state simply doesn’t have enough revenue to do the things it needs to build thriving communities, and our communities can’t afford to pilfer existing revenue from the general fund to do what we need to do.

An increase in the state sales tax from 2.9 percent to 3.52 percent would be the largest infusion of revenue for transportation in decades. But because it would increase the sales tax, a tax that already falls more heavily on people with lower incomes, we strongly urge that such a tax increase be coupled with a way to offset costs for these families by reserving some of the new revenue to make public transit more affordable for low-income Coloradans

Let’s be clear about something. At this point in Colorado, nearly any tax increase that does not involve a progressive, or graduated, income tax is regressive. This means that it will consume a greater portion of the earnings of lower income Coloradans. But TABOR, specifically forbids Colorado from returning to a graduated income tax, a system we had for decades and one used by all but a few states.

Currently, a Colorado household making $35,000 a year pays 4.6 percent of its income in sales tax, while a household earning $140,000 pays 2.2 percent in sales tax. With a sales tax increase to 3.52 percent, that $35,000 earning household would pay an additional $125 a year in sales tax to help fund roads, while the $140,000 earning household would pay about $290 more in sales tax. Though the higher-earning household pays more sales tax in actual dollars, it’s the lower-earning household that will pay the higher percentage of its income in sales tax.

This biased treatment of taxpayers, should be addressed.

Right now, a typical low-wage transit user in Denver pays about $80 a month in fares or about $960 annually. Increasing the state sales tax from 2.9 percent to 3.52 percent would significantly increase the amount of money that low income transit users contribute for transportation in the state.

It’s only fair that this additional contribution should be acknowledged and offset. CFI believes that reserving money from the sales tax increase for transit agencies to make fares more affordable for low-income users is the best available way to address the bias built into a sales tax increase. For example, if RTD offered the same half-off fare it currently provides seniors, students and the disabled, to people earning up to 150 percent of the federal poverty level, it could greatly offset the regressive nature of a sales tax increase.

Although the sales tax is a regressive form of taxation, it does have the benefit of generating revenue from tourists.  Twenty three percent of the new revenue would come from out-of-state individuals, so tourists visiting Colorado would help contribute to our roads. A higher portion of Colorado’s gas tax revenue is paid by out-of-state residents at 33 percent, but the gas tax is even more regressive than the sales tax.

It is time to ask voters if they are ready to pay more for a better transportation system and it makes sense that we raise those new funds in ways that don’t make those making the least take on an unfair share of the responsibility for paying for the improvements.

Action Needed NOW to Defeat House ACA Repeal Bill

Posted March 24, 2017 by Samantha Curran

exclamation-point-1421014_640The House will vote THIS AFTERNOON on the House Republican health bill.

We need to do everything we can to keep pressure on the House moderate Republicans – to make sure those who were earlier NOs stay that way.

It is not too late to keep calls and emails flowing into key House moderates’ offices to push Members to publicly oppose the health care repeal bill. We need public statements on the record so wavering Members will be less likely to flip.

Please call Representative Mike Coffman TODAY and strongly urge him to vote no on the House ACA repeal bill.

 

Contact Information for Rep. Mike Coffman:

Rep. Mike Coffman (CO District 6)- 720-748-7514  Email here.

Key messages to convey include that the House health care repeal bill:

  • Increases the number of uninsured by 24 million people
  • Makes coverage unaffordable for millions of Americans – raising premiums and out-of-pocket costs, while raising taxes for many working families
  • Removing Essential Health Benefits means that insurance plans will not cover even the barebones of basic services, even prescription drugs, that people need to treat their conditions to stay healthy.  Women will be charged more than men and lifetime limits are back.

The results could come down to just several House moderates’ positions. How this goes down today will have big ripple effects on whether the Senate has the time to move their legislation next week before the April recess or whether we live to fight another day.

Your voice is needed now. Call Rep. Mike Coffman to share information on why this bill is bad for Colorado.  

Contact info for Colorado congressional delegation:

Sen. Cory Gardner – 303-391-5777  Email here.

Sen. Michael Bennet – 303-455-7600 / 866-455-9866 Email here.

Rep. Diana DeGette (CO District 1) – 303-844-4988 Email here.

Rep. Jared Polis (CO District 2- 303-484-9596 ) Email here.

Rep. Scott Tipton (CO District 3)- 970-241-2499 Email here.

Rep. Ken Buck (CO District 4)- 970-702-2136   Email here.

Rep. Doug Lamborn (CO District 5)- 719-520-0055   Email here.

Rep. Mike Coffman (CO District 6)- 720-748-7514  Email here.

Rep. Ed Perlmutter  (CO District 7) – 303-274-7944 Email here.

March Sadness: HB 1187 should’ve been a slam dunk

Posted March 22, 2017 by Carol Hedges

 

By Carol Hedges

CFI Executive Director

This bill should've been a slam dunk.

How we wish the hearing on Monday would’ve gone

I know, I know. The March Madness analogies are getting stale but please bear with a few more basketball references as I describe the truly “mad” March hearing I was a part of Monday. I am, after all, a born-and-raised KU Jayhawk basketball fan.

The Senate State Affairs Committee, on a 3-2 party-line vote, rejected a very modest measure to ask voters to let the state keep their taxes to use them for schools, roads, health care and colleges. It wasn’t like watching the South Carolina/Duke game where, although the South Carolina victory was a longshot, some people put their money on the Gamecocks. By comparison, this game was fixed from the start. The vote tally going into the committee was a foregone conclusion. No Cinderella story here; the ugly sisters smashed the glass slipper as soon as they saw it.

In the case of HB 1187, it was worse than a No. 16 vs. No. 1 game, a matchup never won by the 16 seed. The other team didn’t even show up and they won. And that is what has become of Colorado’s management of its fiscal affairs.

This measure should have been a slam dunk. There must have been close to 20 witnesses testifying on the bill with just three of those witnesses asking for a no vote from committee members. Their main argument was that the bill was unconstitutional, and that argument was swatted down by Legislative Legal Services like Shaquille O’Neal blocking a lay-up by Danny DeVito.

It was patiently and clearly explained that the bill was merely implementing a component of TABOR.

There was one halftime adjustment to the defense. The chairman asked why legislators had to vote to let the people decide. Why didn’t cities, counties, special districts and school districts just raise the money and lead the effort? Again, missing the mark by failing to acknowledge just how expensive it was to get these measures on the ballot and totally abdicating any leadership role for legislators.

It is a sad day indeed when one extreme segment of the political world can hold the entire rest of the state hostage to its self-serving world view. As more people clamor for a voice in our political decision making, the actions of a slim majority of the Senate State Affairs committee reinforced the deepest fears and disappointments of many — that too many of our elected officials are more worried about staying in power than they are about the views of the people.

HB 1187 represented a centrist approach to a vexing problem in Colorado, how to keep up with the demands of a growing economy. It had bipartisan support in both chambers. It had the support of the Denver Chamber of Commerce, the Grand Junction Chamber of Commerce, C3, Club 20, Colorado Farm Bureau, Progressive 15, Colorado Nonprofit Association, AARP, Interfaith Alliance of Colorado, Colorado Catholic Conference, Bell Policy Center and CFI and lots of members of Indivisible Colorado.

Yet a small group of extremist interests locked arms to block its consideration even by the full membership of the Senate, where it very well could have passed.

All this bill would have done was ask Colorado voters if they wanted to adopt the same playing court for economic growth used by the majority of other states with revenue limits — instead of the one we have now that simultaneously results in cuts and tax rebates. All this bill would have done is give Coloradans the chance to choose what to do with their dollars.

The valuable lesson learned was that the handful of extremists who support the false choices presented by our current fiscal system support the idea of asking voters only when the proposal benefits their narrow interests.

Unfortunately, Coloradans will not get a win for public schools and affordable higher education or even a chance for a win just now. But, in the spirit of a true sports fan, sometimes we have to take solace in the sentiment, “wait ‘til next year.”

Federal Budget Watch, Mar. 20

Posted March 20, 2017 by Samantha Curran

binoculars-954021_1280Last week was truly a week of March Madness. The Congressional Budget Office (CBO) released its score of the Republican-led House “repeal and replace” health reform bill, and as of now, we expect the bill to be considered by the full House this Thursday, 5/23 — the anniversary of the ACA. In addition, President Trump released his “skinny” budget last Thursday, laying out his spending priorities for the upcoming fiscal year.

President Trump’s Skinny Budget

As noted in a new blog post from CBPP, Trump’s “skinny” budget “contains substantially less detail than “skinny” budgets of the last five administrations going back to Ronald Reagan. The Trump budget includes only estimates for fiscal 2018 and only for its proposed changes to discretionary programs (those funded through the annual appropriations process) — even though discretionary programs make up less than one-third of the federal budget.”

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CBPP President Bob Greenstein’s Commentary on the Trump Budget

CBPP President posted a commentary to Trump’s “skinny” budget laying out how the budget request would do severe damage to an array of investments that help many of the very people that President Trump has said would be his priority — people who have been left behind by today’s economy or live in distressed urban or rural communities.

As noted in the commentary, the cuts in programs for individuals and communities that the President has promised to help include:

  • cuts to job training that helps workers upgrade their skills;
  • cuts to Labor Department funding that likely would seriously weaken federal actions to ensure that factories and mines are safe, workers are paid what they have earned, and minimum-wage and other laws to protect workers are complied with;
  • cuts to student aid and work-study programs that help low- and moderate-income students afford college;
  • cuts to economic development funding for both cities and rural communities;
  • cuts to housing assistance for hard-pressed families struggling to pay the rent; and
  • elimination of the Low Income Home Energy Assistance Program, which helps low-income households, including many poor seniors, pay for heat, especially in cold winter months.

Read the full commentary here.

Republican Health Bill Heads to the House Floor

The House Budget Committee approved 19-17 a motion last Thursday to send the Republican health bill, The American Health Care Act, to the full House for consideration.

Three conservative Republicans — Reps. Sanford (SC-1), Brat (VA-7) and Palmer (AL-6) joined all Committee Democrats in voting against the motion.

The panel also approved four other “motions” offered by GOP lawmakers that directed the House Rules Committee to allow certain amendments to the bill – all of which move the measure further to the right. Those include allowing states to switch to federal block grant funding for the Medicaid program and immediately freezing enrollment in the health law’s Medicaid expansion. The other two would authorize states to impose work requirements on able-bodied adults without children in the Medicaid expansion and restructure the tax credits to provide more funding to lower-income individuals.  These motions are noteworthy for one reason:  they may augur the specific changes the House Republican leadership is considering making to the legislation to win over more conservatives and have the votes to pass the bill.

The process: The legislation will now go to the Rules Committee where Republicans hope to make several changes to the bill, though conservative and moderate factions of the party remain divided on what direction those changes should take. After the Rules Committee, the legislation heads to the floor for debate and vote(s), though there are growing concerns from Republicans about the bill and it’s possible that action on the bill will slip. However, we must continue to work as if the House will act next week and the Senate will take up the bill the following week.

Majority Leader Sen. McConnell’s goal is to complete action on the health reform bill during the week of March 27th.  Just 20 hours of debate are allowed under reconciliation, providing a very limited debate for such a consequential piece of legislation.  Numerous senators have voiced their opposition to the House health plan.  At this point, it appears that the Senate will NOT vote on the House plan (however that is modified); instead it appears that a revised measure – a substitute – may be offered by Sen. McConnell.    This substitute might address purely technical drafting issues – or it might include substantive changes sought by key Republicans whose votes are needed to pass the Senate.

McConnell wants to finish the health bill that week, allowing the first week of April (which is the last week before the spring recess) to be used to reconcile differences between the House and Senate health bills.

Here’s a good new resource:
Senator Bob Casey (D-PA), Ranking Member of the Senate Special Committee on Aging, released a 50 State Report detailing the impacts of TrumpCare on older Americans.

Factsheets for each state: https://www.aging.senate.gov/press-releases/the-american-health-care-act-will-harm-older-americans-in-each-state

CBO Releases a “Score” (or Estimate) of the House Plan

The Congressional Budget Office (CBO) has released its score on the House Republicans’ health plan (the legislation adopted by the Ways and Means and Energy and Commerce Committees). The CBO report confirms the path Congressional leaders are on to dismantle the Affordable Care Act and end Medicaid as we know it.

The CBO estimates find that the House Republican health plan would cause 24 million people to lose insurance coverage by 2026.  It would not only effectively end the ACA’s Medicaid expansion but go further by ending Medicaid as we know it – shifting costs to states, hurting local economies, and putting quality coverage for seniors, people with disabilities and families with kids at risk.

Key points:

  • 24 million people would lose health coverage under the House Republican health plan by the end of the decade.
    • 14 million people would lose coverage next year and 21 million would lose coverage by 2020.
    • CBO finds that the House plan would eventually eliminate allof the coverage gains expected under the ACA and the uninsured rate among non-elderly would be at or above the rate prior to the ACA.
  • The House Republican health plan will end the Medicaid expansion and end Medicaid as we know it – slashing federal Medicaid spending by $880 billion over the next 10 years and causing 14 million people to lose Medicaid coverage.
  • The House Republican plan takes away coverage from millions of people to help pay for $600 billion in tax cuts primarily for the wealthiest Americans, as well as drug and insurance companies.
  • Millions will pay substantially higher premiums due to large cuts in tax credits that outweigh the slight decrease in average premiums.
    • The premium decrease that Republicans are citing is the average change in the sticker price of health insurance, without accounting for the House plan’s large reductions in tax credits.
    • That means consumers will pay a considerably greater share of total premium costs than under current law — so even if average premiums fall, what many people actually pay will rise.

 

CBPP Blogs on the House Republican Health Bill

 

Contact info for Colorado congressional delegation:

Sen. Cory Gardner – 303-391-5777 Email here.
Sen. Michael Bennet – 303-455-7600 / 866-455-9866 Email here.
Rep. Diana DeGette (CO District 1) – 303-844-4988 Email here.
Rep. Jared Polis (CO District 2- 303-484-9596 ) Email here.
Rep. Scott Tipton (CO District 3)- 970-241-2499 Email here.
Rep. Ken Buck (CO District 4)- 970-702-2136 Email here.
Rep. Doug Lamborn (CO District 5)- 719-520-0055 Email here.
Rep. Mike Coffman (CO District 6)- 720-748-7514 Email here.
Rep. Ed Perlmutter (CO District 7) – 303-274-7944 Email here.

CFI’s Forecast Five: March Madness Edition

Posted March 17, 2017 by Carol Hedges

Note: It’s time again for the quarterly state revenue forecast. We couldn’t help but try to tie it to basketball.

By Carol Hedges

CFI Executive Director

Basketball game

“Your income must be this high to benefit from rebates.”

  1. Winning brackets: The folks with the winning brackets in terms of the March revenue forecast will Coloradans in the highest income brackets. That’s because the size of the TABOR surplus of $264 million will trigger a temporary income tax cut from the current 4.63 percent to 4.5 percent for one year. So, that means folks earning under $39,000 a year get about $8 while someone making about $221,000 will get back $511.

 

  1. “Chronic” pain: There is still talk of increasing taxes on recreational marijuana to help bridge the shortfall. The governor’s proposal would raise the current special sales tax rate on recreational marijuana from 10 percent to 12 percent, raising an estimated $41.9 million. Will this help drive more Coloradans to buy medical marijuana, which is only subject to the regular state sales tax of 2.9 percent? Will we see a sudden epidemic of back pain sweep across our state?

 

  1. Halftime adjustment: With a significant budget shortfall to fill, lawmakers are still considering cutting the Senior Homestead Property Tax Exemption, which now costs the state $140 million a year.

 

  1. Technical Foul: Our constitutional revenue limits mean less money today to invest in our transportation system. Yet a bipartisan group of legislators has recognized the need to raise new money to build the sustainable transportation system we need. Intentional or flagrant?

 

  1. Rebound: U.S. News and World Report rates Colorado’s economy as the best in the nation. The two-year slump in the oil and gas industry is ending, and rig counts are up. Consumer spending “remains robust and employers continue to add jobs at a moderate rate, further lowering unemployment,” according to Legislative Council. However, because of TABOR, our schools face more cuts and our savings account will remain depleted.

Capitol Gains: What the fiscal just happened?

Posted March 16, 2017 by Ali Mickelson

By Ali Mickelson

CFI Director of Legislative and Tax Policy

Photo by Alex E. Proimos

How Ali felt after the hearing. (Photo by Alex E. Proimos)

Once every session, a hearing comes along that completely flabbergasts me. The comments in the hearing are so contrary to how I see things, I am left completely dumbfounded by the discussion.

Well, Christmas came early this year, and I experienced my annual bafflement when the Senate Finance Committee heard SB17-149 last month.

SB17-149 was a bill that would have allowed a taxpayer to deposit his or her income tax refund into multiple accounts instead of just one as current law allows. This change would be incredibly helpful if, say, you had more than one child and you wanted to contribute to multiple 529 college savings plans, or if you would like to have some of your refund reserved in a savings account but the rest in a checking account to pay off bills. In short, this bill was a common sense measure to allow taxpayers to automatically set aside money for college savings or other long-term priorities.

This bill is especially important in Colorado because of the implementation of the Earned Income Tax Credit. Starting in the 2015 tax year, more than 350,000 Colorado families saw a boost in their tax refund as a result of the Colorado EITC. This increase could be more than $600 for some working families.

Many EITC recipients use their tax refunds on their family’s current household needs. In 2012, 84 percent of EITC recipients used part of the tax refund to pay off debt or cover bills, 61 percent used a portion to cover child-related expenses, and 33 percent used at least part of their refunds to purchase or repair a car. BUT nearly half — 47 percent — also directed part of their refund toward savings for future expenses, such as a security deposit on an apartment, a down payment on a home or a fund for emergencies. A tax refund can be an opportunity to put aside hundreds of dollars that a family may struggle to save during the year. This bill would have increased the likelihood that a family would set aside that money and save for their future.

SB 17-149 would have provided low- and middle-income families a convenient and automatic mechanism for saving. Creating savings and building assets is a critical step toward reducing poverty and creating economic security.  Studies have demonstrated savings and assets provide families with numerous important social and economic benefits, including improved household stability, reduced economic stress and enhanced welfare of children. Additionally, children with a college savings account are six times more likely to attend college than those without an account.

No-brainer, right? Of course not. The Senate Finance committee saw it quite differently. One senator who voted against the bill was very concerned about the government’s role in this bill and the attempt to “micromanage people’s personal decisions.” In a rather confusing question to the Bell Policy Center’s Rich Jones, who was testifying in support of the bill, the senator asked about the government “employing behavioral economics” to get people to do what they want them to do and whether this is the appropriate role of government.

The problem with this argument, as Jones and the sponsor, Sen. Daniel Kagan, also addressed in his response, is that we weren’t trying to get taxpayers to do anything with this bill. There is no incentive to save or split your refunds, certainly not any more than there is to spend your tax refund on a new TV the day after you get the refund.

We merely wanted to give taxpayers the opportunity to choose what they want to do with their money.  I simply can’t even understand the idea that allowing taxpayers to choose where to spend their money is any kind of government direction or manipulation.

Another senator who voted against the bill acknowledged that it provided convenience for taxpayers, but said he was bothered that retirement savings programs weren’t included in the refund direct deposit process. This, of course, is an important policy question, but it has nothing to do with this bill and the convenience provided for taxpayers. In fact, it is an acknowledgement that directly depositing your tax refund is a great option for Colorado families who want to be thoughtful stewards of their family budgets.

Yet another senator who opposed the bill explained his opposition as government trying to manage people’s lives. He agreed with the economic theory behind the bill but stated it’s not the role of government to make choices for people, and when government does, people don’t learn to make choices on their own. He then explained how he learned to save money growing up, arguing the bill would create more dependency.

I couldn’t make this stuff up.

Go back and read what this bill would have done. I’ll wait. Now, how we have gone from allowing people the convenience of choosing what to do with their money to creating more government dependency is beyond me, but again, Christmas came early this year, and I must have been really good.

Needless to say, this bill died on a party-line vote. I hope we will see it again next year because common-sense policy is what I would like to create dependency on. There’s a behavioral economic theory I think we can all agree with.

Widespread Funding Inequities Now Plague School Districts Across Colorado

Posted March 14, 2017 by Samantha Curran

By Samantha Curran

CFI Communications Associate 

A child’s chance of getting a quality education in Colorado is becoming more and more dependent upon their zip code as schools across our state are forced to rely more heavily on local tax revenue.

Over the last 25 years, Colorado has cut K-12 funding significantly, causing our schools to fall behind. We currently spend $2,053 less per student than the national average, rank last in the nation for providing teachers a competitive wage, and 49 school districts now operate on four-day school weeks due to financial reasons. In an effort to make up for the shortages in state funds, many school districts are increasing per pupil funding through voter-approved property tax increases.

However, many districts simply do not have the property wealth to raise funding sufficient to make up for diminishing state dollars. As a result, Colorado is beginning to see widespread, gross inequities in the quality of education across the state.

Colorado primarily funds its 178 school districts through a combination of local and state sources. Each legislative session, policy makers decide how much the state will allocate to K-12, and a comprehensive calculation called the School Finance Formula determines how that amount of money gets distributed across all districts. Once a school district’s total program level is calculated, local tax revenue is determined and applied, then state aid makes up for the difference.

The purpose of the School Finance Formula is to compensate for the differences in wealth and needs across Colorado’s diverse school districts. The formula considers a variety of different factors such as a district’s size, number of at-risk students and cost of living to determine how much money it should receive beyond the base amount. This ensures that all districts receive the same proportion of funds. However, as school districts independently raise funds through local property taxes, per pupil funding varies immensely across the state.Per-Pupil

For example, the school finance formula allocates $7,353 per student for Boulder Valley School District RE-2, $7,163 per student for Douglas County School District RE-1, and $7,389 per student for Pueblo City 60. Boulder however, spends $1,737 more per pupil than Douglas County and $2,262 more per pupil than Pueblo City, once local tax increases are accounted for.

The school districts that have the property wealth and appetite to raise local taxes are increasing school funding, but the school districts who cannot raise money locally are being left behind. For example, this past November, Cherry Creek, Boulder and Steamboat Springs all passed tax measures to raise more money for their schools while Greeley, Pueblo and Colorado Springs were not successful.

It’s no coincidence that Cherry Creek, Boulder and Steamboat Springs are also ranked as some of the best schools in Colorado while Greeley, Pueblo and Colorado Springs are ranked toward the bottom according to Niche 2016 school rankings. These local tax measures act as the deciding factor between the school’s ability to offer full five-day school weeks, providing extracurricular programs, updating infrastructure or maintaining small class sizes; all factors that lead to quality education.

Out of Colorado’s 178 school districts, 89 of those operate on four-day school weeks. Half of these schools made the decision to shorten school weeks due to financial reasons, meaning that the number of school districts operating on four-day weeks has doubled since the year 2000. Half of Colorado’s school districts have some or all schools operating on four-day weeks.

As the state continues to make cuts from the state proportion of school finance, it cripples our ability to compensate for disparities across districts and ensure that each child is receiving the education they deserve. We need to urge our policy makers to increase, not cut, state school funding as this is the only viable and fair solution to making our schools a place where all children can flourish.

For more information on school finance, check out our data library.

Federal Budget Watch, March 14

Posted March 14, 2017 by Samantha Curran

binoculars-954021_1280Some of the long-awaited details of the House GOP’s health plan have been released. First, though, we want to call attention to a special report just released from the Center on Budget and Policy Priorities called, “At Risk: Federal Grants to State and local Governments,” by Iris J. Lav and Michael Leachman.

The report, which contains state-by-state data for your use, shows that low- and moderate-income families are likely to bear the brunt if federal funds that go to state and local governments as grants are cut. These grants help finance critical programs and services on which residents of every state rely.

Colorado, for example, receives $9.5 billion in federal grants, comprising 26.3 percent of state spending.

The programs these grants support are at serious risk of being substantially diminished or eliminated, based on past proposals from President Trump and congressional Republicans and the cuts likely in the forthcoming Trump “skinny budget.”

These programs are too important, particularly to low- and moderate-income people, to be considered as available resources that can be cut — either immediately or over time — to reduce the overall budget, to pay for greater defense spending or a wall on the Mexican border, or to finance other administration priorities such as deep tax cuts for high-income people.

Now, here’s the latest budget intel from our friends at the CBPP:

The House Ways & Means and Energy & Commerce Committees considered and approved the legislation before they got a “score” or estimate from the Congressional Budget Office (CBO) on how the bill would impact coverage and federal costs. Even without the CBO estimate, we already knew that the House GOP’s health plan would:

  • Effectively end the Medicaid expansion – which is currently providing 11 million people with coverage and has helped bring the U.S. uninsured rate down to the lowest in history.
  • End Medicaid as we know it by capping federal dollars and shifting billions in costs to states.
  • Make marketplace coverage less affordable and more out of reach for millions of Americans.
    Democrats on the Committees unsuccessfully offered dozens of amendments to the legislation.

Since then, CBO has released their estimates and found that the House Republican health plan would:

  • Cause 24 million people to lose coverage by 2026.
  • Cause the number of uninsured to rise by 14 million in 2018.
  • Cut federal Medicaid spending by $880 billion or 17.6 percent over the next ten years.

To read more on CBO’s findings, read CBPP’s blog, CBO: 24 Million People Would Lose Coverage Under House Republican Health Plan.

House Speaker Paul Ryan is plowing ahead with his plans to hold a House floor vote on the legislation as early as the week of March 20th, despite opposition from some conservative and moderate Republicans. From there, the bill is likely to go right to the Senate floor, bypassing the normal committee process. Senate Majority Leader McConnell has indicated that if the House passes the bill by March 24th, he will likely move to bring the legislation to the Senate floor the following week. The Center had expected that Sen. McConnell would bring a substitute plan to the Senate floor, but that no longer appears to be the case. Instead, McConnell aims to pass the House bill as is – or with only very small changes if necessary. It all depends on whether McConnell will have enough support to move the House bill within his Republican caucus. McConnell is still committed to passing the legislation before the April 10-21 recess, but several Republican senators have expressed misgivings about the bill as drafted.

The next several weeks are critical in our fight to beat the House Republican health plan in the Senate. Here are a few ways you can quickly plug in and lend your voice.

  1. Reach out to our Representatives and Senators. Email or call senators’ health care staff (as well as key state or district staff) to share information on why this bill is bad for Colorado.
  2. Make your voice heard. Tweet at, call, email and comment on the Facebook pages of our Senators and House members with opposition to the bill. The message to deliver in these interactions is:

a. In the House: Urge House members to oppose the House Republican legislation to repeal and replace the Affordable Care Act (ACA).

b. In the Senate: Urge Senators to oppose the House bill or any similar measure in the Senate that would end the Medicaid expansion and the basic Medicaid program as we know it.

Contact info for Colorado congressional delegation:

Sen. Cory Gardner – 303-391-5777 Email here.
Sen. Michael Bennet – 303-455-7600 / 866-455-9866 Email here.
Rep. Diana DeGette (CO District 1) – 303-844-4988 Email here.
Rep. Jared Polis (CO District 2- 303-484-9596 ) Email here.
Rep. Scott Tipton (CO District 3)- 970-241-2499 Email here.
Rep. Ken Buck (CO District 4)- 970-702-2136 Email here.
Rep. Doug Lamborn (CO District 5)- 719-520-0055 Email here.
Rep. Mike Coffman (CO District 6)- 720-748-7514 Email here.
Rep. Ed Perlmutter (CO District 7) – 303-274-7944 Email here.

For more information on how the House GOP’s Medicaid provisions will impact coverage and costs, check out these resources:

Completing FY 17 Appropriations

The House passed a defense appropriations spending bill Wednesday for the current 2017 fiscal year though the bill faces an uncertain vote in the Senate. Congress has only about five working weeks left before April 28, the date when funding for most federal agencies runs out under a continuing resolution appropriations measure adopted in December.

It’s highly unlikely that Congress will complete all the individual appropriations bills, instead extending the CR for the rest of the fiscal year for most agencies. That said, bipartisan negotiations are underway in the Senate to see if they can work out some of the appropriations bills.

To resolve their time crunch, senators of both parties have suggested they may try to pass a single final spending package for fiscal 2017, which would include the House-passed defense bill, all remaining unfinished appropriations measures, and any supplemental funding requested by Trump for the military and the wall/border security, said to be around $30 billion.

President Trump’s FY 18 Budget Request Coming March 16

President Trump’s fiscal 2018 “skinny budget” should arrive on March 16.

Administration officials have said Trump’s proposal would boost planned defense spending next year by $54 billion and offset the cost with deep cuts to domestic and international discretionary programs. Democrats have made clear they would object to any defense spending increase without an equivalent boost for domestic programs, while conservative Republicans are pushing to slash domestic spending to bring down deficits without raising taxes and ending a commitment made in a bipartisan budget deal in 2015 that called for parity between defense and nondefense spending increases.

For more information on what these big cuts in domestic programs would mean, check out CBPP’s blog: Trump Plans Big Cut in Domestic Programs.

Resources on Problems with a SNAP Block Grant

CBPP has three new resources that detail the problems with a SNAP block grant, or other proposals that would cap SNAP funding or merge it with other programs.

  1. A short video featuring Jared Bernstein, a Senior Fellow at CBPP.
  2. A blog post highlighting that Senate Agriculture Chairman Pat Roberts (R-KS) this week said a SNAP block grant “is not the answer.”
  3. A paper detailing the main problems with a SNAP block grant, including state-by-state estimates of the amount of SNAP funding that would not have been available in 2013 had a SNAP block grant been in effect at pre-recession levels.

Property taxes in Colorado nearly the lowest in the nation

Posted March 9, 2017 by Chris Stiffler

property tax rankings by state

By Chris Stiffler

CFI Economist

How do property taxes in Colorado compare to those in other states? Before we answer that, let’s start with the basics.

Your property tax bill is a function of three factors: the market value of your home, the statewide assessment rate (what portion of your home’s value is subject to taxes) and the local tax rate applied to your home (called the millage rate). If you own a $350,000 home in Colorado, you pay on average $2,103 in property taxes.

These tax rates vary across different districts in Colorado. For instance, while the owner of a $350,000 home in Denver pays about $2,293 a year in property taxes, that property tax on that same home in Gunnison would be about $1,722 because of the various millage rates (think tax rates) across counties and schools districts. This also means that as the value of your home increases, as we have seen with steep increases in home values along Colorado’s Front Range, your property tax bill also will increase.

Where do those property taxes go?

About half of the tax revenue goes to fund your local school district, while the other half is split between the county, the city and some special taxing districts set up for specific purposes (such as fire protection districts and sewer/sanitation districts). All property tax revenue stays in the local district, with none of it going to the state.

property tax ranking chartsWhat if you picked up that same $350,000 house and moved it to Texas? Then you’d see your property taxes more than triple. The owner of a $350,000 home in Texas pays $6,635 in annual property taxes. If that $350,000 house were in Kansas, $4,903 would be owed each year in property taxes. In Nebraska, the homeowner would pay $6,482 a year.

When you rank states by effective home property tax rates (basically, total property taxes divided by home value), Colorado ranks 44th  — meaning only six other states have lower property taxes on homes than Colorado. It is also important to remember that a state’s revenue comes from property taxes, income taxes and sales taxes. So while Texas has no income tax, the Lone Star State’s property taxes are among the highest in the country.

Just because Colorado’s property taxes rank as some of the lowest in the country doesn’t mean they are affordable for all homeowners. Retired seniors, who are typically on fixed incomes, can have a hard time paying their property tax bills, particularly if the value of their home (and therefore their property taxes) has increases dramatically. This is why Colorado has a property tax break for seniors called the Senior Property Tax Homestead Exemption.

This property tax break for seniors saves the owner of a $350,000 house on average $600 a year. Local schools and local fire departments don’t lose out on that $600 because the state reimburses local governments for the exemption. This ultimately means that the state pays the tab.

But the homestead exemption is not always available each year. The legislature has the power to change the size of the credit and can even lower it to zero during tough budget years. The homestead exemption costs the state about $140 million each year. It has also been one of the things that might be cut to help bridge the budget shortfall this year.

 

Federal Budget Watch, Mar. 6

Posted March 6, 2017 by Samantha Curran

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House Republicans are poised to roll back expanded Medicaid coverage under the ACA. We’ve got the latest intel, thanks to our colleagues at the Center on Budget and Policy Priorities. Let’s get started with this week’s Federal Budget Watch.

House Republicans and Republican Governors Crafting Health Proposals

House Republicans are crafting a legislative package to repeal and replace the Affordable Care Act (ACA) which is now expected to be marked up this week in the Energy & Commerce and Ways & Means Committees. It’s becoming increasingly apparent, based on press reports and other indications, that the House bill will effectively end the Medicaid expansion within a few years, and will shift significant costs to states in converting the program to a per capita cap or block grant.

As the Center on Budget and Policy Priorities wrote in their report, House Republican Proposals to Radically Overhaul Medicaid Would Shift Costs, Risks to States, the document shows that their starting point remains the ACA “repeal and delay” legislation that President Obama vetoed last year (with modifications) — a bill that would increase the number of uninsured by 32 million people, according to Congressional Budget Office (CBO) estimates. Moreover, the document shows that House Republicans intend to use ACA repeal legislation to fast track their longstanding proposal to convert Medicaid to a per capita cap or block grant. The full report details the enormous impact on states and beneficiaries and includes state-by-state data, showing that in 2019, Colorado’s federal dollars for the expansion group would be reduced by $631.6 million, increasing the state’s expenses by about the same amount.
Last Thursday, House Republicans unveiled to a few Republican members their new ACA repeal legislation. The Center’s newly released blog, House GOP Medicaid Provisions Would Cut Federal Medicaid Spending by $560 Billion Over Next Decade, discusses the impacts of ending the ACA’s enhanced federal funding for Medicaid expansion, which outlines, leaked discussion drafts. The blog reports that the House Republican health plan would shift an estimated $560 billion in Medicaid costs to the states over the next ten years, effectively ending the ACA’s Medicaid expansion for 11 million people.

Meanwhile, a number of Republican governors are also crafting a health plan that would cap federal funding for Medicaid, leaked documents show. The Center posted a blog from Aviva Aron-Dine Sunday that explains how this plan would require states to accept a per capita cap or a block grant in place of current federal funding for the ACA’s Medicaid expansion, and “allow states to opt for a per capita cap or block grant for other groups that Medicaid covers, including parents, children, pregnant women, seniors, and people with disabilities. The plan also proposes other damaging changes in Medicaid, such as letting states cap enrollment and deny coverage to eligible individuals.”

In addition, The Center explains why “a work requirement in Medicaid would penalize those least able to get and hold a job — while keeping others from improving their health and participating in the workforce,” in their blog, A Medicaid Work Requirement Would Block Poor Families From Care. Many conservatives in Congress and among the nation’s governors seek more flexibility in their Medicaid programs, such as the option to impose work requirements.

Finishing up FY 17 Appropriations

The current “continuing resolution” (CR) funding most appropriated or discretionary federal programs expires April 28, so Congress is turning its attention to trying to finish up the appropriations bills for the rest of this fiscal year. It’s unlikely that Congress will complete all of the individual appropriations bills, instead extending the CR for the rest of the fiscal year for most agencies. That said, bipartisan negotiations are underway in the Senate to see if they can work out some of the appropriations bills.

The President has signaled that he will submit a request for additional FY 17 defense spending, funding for greatly increased immigration enforcement and his wall along the border with Mexico. Conservatives may insist on offsetting cuts to pay for immigration enforcement and the wall, and there’s a risk that the cuts could come from nondefense discretionary programs.

President Trump’s FY 18 Budget Request Coming March 16

In his inaugural address to Congress last week, President Donald Trump promised to deliver a budget that would produce “one of the largest increases in national defense spending in American history.”

President Trump’s address focused fiscal priorities on rebuilding the military, improving care for veterans, and launching a $1 trillion infrastructure program. How to pay for it all won’t be made clear until the President submits his fiscal 2018 budget request, a preliminary outline of which is promised to Congress on March 16. While initial budgets submitted by Presidents in their first term often lack certain details, they typically cover all major policy areas. However, this one will reportedly only address discretionary spending, not entitlements, revenues, or deficits. Administration officials have said Trump’s proposal would boost planned defense spending next year by $54 billion and offset the cost with deep cuts to domestic and international discretionary programs.

In a new blog, Trump Plans Big Cut in Domestic Programs, The Center explains that “President Trump’s plans to raise defense funding by $54 billion in 2018 and cut non-defense discretionary (NDD) spending — which funds key priorities like education and job training, clean water, scientific and medical research, veterans’ medical care, and homeland security — by the same amount would lower NDD funding by 11 percent below this year’s level. The additional $54 billion cut would come on top of sequestration cuts that are already scheduled to take full effect in 2018 under the 2011 Budget Control Act.”

Moreover, the cuts in most NDD programs compared to 2017 will likely be significantly larger than 11 percent, as programs in some areas – such as veterans and border security – are expected to receive increases, requiring deeper cuts in other areas.

Tax Cuts

President Trump and Congressional Republican leaders continue to press for action in Congress this year on tax reform and tax cuts. When Congress takes up the Budget Resolution for FY18, these leaders reportedly will include reconciliation “instructions” in the plan to advance tax cuts in the very same procedural manner they are advancing the ACA repeal: a filibuster-proof measure that requires just 51 votes instead of the usual 60 votes. Trump, Speaker Ryan and others are pressing for deep tax cuts for the wealthy. Administration officials have called on Congress to complete action on a tax bill by August, though many observers think that is an unrealistic goal.

This legislation could also include harmful provisions affecting the EITC and the CTC in the name of “program integrity.”

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