TABOR Rebates: Just the Facts. What are TABOR Rebates? When state revenues (Fiscal Year Spending)...
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Transcript of TABOR Rebates: Just the Facts. What are TABOR Rebates? When state revenues (Fiscal Year Spending)...
What are TABOR Rebates?
When state revenues (Fiscal Year Spending) exceed a voter approved cap (rate of change in CPI plus rate of change in state population), the Colorado Constitution requires money be refunded to taxpayers.
Reasonable Means to Return Money
“…districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions”
-Colorado Constitution—Article X Section 20
FY 2013-2014 FY 2014-2015 FY 2015-2016 FY 2016-2017 $10,900
$11,400
$11,900
$12,400
$12,900
$13,400
$13,900
Total TABOR Revenue Legislative Council Total TABOR Revenue OSPB TABOR limit/Ref C Cap Legislative Council TABOR limit/Ref C Cap OSPB
Mill
ions
FY 2014-15OSPB: $196.8 million
above capLeg. Council: $48.2 million
below cap
FY 2015-16OSPB: $186.5 million
above capLeg. Council: $116.7 mil-
lion above cap
FY 2016-17OSPB: $269.2 million
above capLeg. Council: $620.4 mil-
lion above cap
TABOR Rebates Predicted This Fiscal Year by Governor’s Office and Next Year by Legislative Council
Revenue Subject to Cap Comes from Taxes and Cash Funds
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Cash Funds General FundThe Cap Time Out Cap
Estimates
FY 2014-15General Fund: $9.5 billionCash Funds: $2.7 billion
Income and
Sales Tax
Fees
Cash Funds
General Fund
TABOR Rebates
TABOR Rebates are Paid from General Fund
Legislature Has Authorized Three Refund Mechanisms
First, (and last) Sales Tax rebate based on income
Second, Earned Income Tax Credit
Third, temporary reduction in the income tax rate from 4.63% to 4.5%
Size of the Rebate Depends How Money is ReturnedCurrent Estimates of OSPB
FY 2014-15 FY 2015-16 FY 2016-17$0
$50
$100
$150
$200
$250
$300
Mill
ions
of D
olla
rs
Earned Income Tax Credit
$85.5 million
6 Tier Sales Tax Refund
$114.9 Million
Income Tax Rate Cut
From 4.63% to 4.5%$241.8 million
6 Tier Sales Tax Refund
Total: $27.4 million
$200.4 million
$269.2 million
$186.5 million
6 Tier Sales Tax Refund
$186.5 Million
TABOR Rebates Impact Money Available for Transportation and Capital Construction
If TABOR rebate is 1-3% of General Fund then transfers are cut by half. (1% of General Fund revenue = $101.6 million)
If TABOR rebate is above 3% of General Fund, the transfers is eliminated. (3% of General Fund revenue = $304.8 million)
December Estimates Amounts Reduce Transfers by 50%
Capital Construction Fund
Highway Users Tax Fund
FY 2015-16
$51.3 million
$25.6 million
$0
$205 million
$102.5 million
$0
FY 2016-17
$54 million
$27 million
$0
$216 million
$108million
$0
1.8% of GF Rebate Expected ($186.5 m)
2.6% of GF Rebate Expected ($269.2 m)
***OSPB Estimates
Current
Current
TABOR refund 1-3%
TABOR refund 1-3%
TABOR refund above 3%
TABOR refund above 3%
Ways to Address the Conundrum
• changes in what counts as revenue subject to the cap
• elections that allow the state to keep revenue above the cap
• significant changes to the constitution.
*(proposals to reduce revenue collections)