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
- 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.
- “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?
- 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.
- 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?
- 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.