2024 Session: TABOR Takings Tracker

PDF OF FULL REPORT

Author: Erik Gamm

TABOR Takings Tracker

Legislators have placed Coloradans’ TABOR refunds squarely in their crosshairs during the 2024 legislative session, having proposed over 100 bills that would slash the TABOR refund to a quarter of its projected size if passed. Amid a period of state revenue growth in unprecedented excess of the Referendum C spending cap and a state budget larger than $40 billion for the first time in history, the state’s legislative majority has seen fit to circumvent the standard refund mechanisms through a long list of proposed tax rate reductions, tax credits, and redistributionist projects.

As of May 2^nd, with just six days left in the legislative session, there are 103 bills either passed or under consideration that would affect TABOR refunds. Most of these redirect money out of refunds towards targeted tax reductions for specific groups, mainly families and low-income Coloradans. Through such measures, the state will diminish taxpayers’ agency to decide, whether by growing their own wealth or donating to charity, how best to allocate money that they would normally be owed. Voters rejected Proposition HH, which proposed to take TABOR refunds in exchange for limited property tax relief, just last November.

• The TABOR refund is expected to grow from $1.8 billion in the current fiscal year to $2.3 billion in FY26 under current law; more than half of the projected $6 billion of excess revenue through those years will be either seized by the state or redirected through non-conventional channels, should bills currently before the legislature all become law.
  • The recent announcement that an additional $67 million in TABOR refunds is owed to taxpayers due to an accounting error is not reflected in this report.
• 103 bills have been introduced during the 2024 legislative session that would reduce projected TABOR refunds by a combined $3.5 billion (55%).
  • These bills propose to reduce the TABOR refund by a combined $310 million in FY24, $1.48 billion in FY25, and $1.75 billion in FY26.
  • The five most impactful bills (see the list below) would reduce TABOR refunds by $2.6 billion, more than 43%, across the next two fiscal years. The rest of the bills would reduce refunds by a total of $751 million (12%) over that period.
  • Further bills, including one concerning property taxation which would reduce refunds by an additional $100 million, are expected to be introduced before the end of the session.
• SB24-228, introduced on April 30^th, proposes to change the TABOR refund mechanism by lowering the state income tax rate according to the level of excess state revenue.

The figure below shows projected TABOR refunds in the next three fiscal years and the amounts of those refunds that each bill would remove.

2024 legislation would reduce the current fiscal year’s TABOR refund to $1.5 billion, which is 85% of the latest projection. The refund would fall to $430 in FY25 and $540 million in FY 2026—both less than 25% of what’s currently projected. Several bills signed into law after the 2023 session, mostly tax credits and refunds similar to those under consideration now, also reduced these projections prior to the start of the current session.

79% of the proposed FY26 TABOR refund reduction comes from just five bills:

• SB24-146: Tax Credit for Qualified Renters
  • Adds a tax credit, starting at $1,000 for single and $2,000 for joint filers, available to low-income renters
• HB24-1340: Incentives for Post-Secondary Education
  • Allows higher-education students to claim up to $3,000 upon completion of credentials associated with high-demand jobs
• HB24-1134: Adjustments to Tax Expenditures to Reduce Burden
  • Expands several state income tax credits including the EITC
• HB24-1311: Family Affordability Tax Credit
  • Creates refundable tax credits for low-income filers with children
• SB24-166: Air Quality Enforcement
  • Increases fees for non-compliance with air quality regulations and exempts their fee collections from the TABOR revenue limit

Four of those bills reallocate their refund impacts through tax credits, tax incentives, and/or transfer payments to individuals and couples. SB24-166, in addition to increasing air quality–noncompliance fees, reduces the TABOR refund by exempting all such fees from the state’s spending limit. Of the five bills, two would apply temporarily—SB24-146 and HB24-1340 expire in FY26 and FY30, respectively—and the others would continue to reduce revenue subject to TABOR indefinitely. Although the loss of $3.5 billion in refunds would be realized largely as tax cuts, and regardless of whether the policies behind it are beneficial or not, the legislature’s approach to these cuts broadly undermines TABOR’s intent by divorcing taxpayers’ contributions to state revenue from the values of refunds they receive and deciding for them how that money should be spent instead.

Full List of Bills