Earlier this week, Democratic state lawmakers struck a deal with Gov. Jared Polis that could make big changes to how TABOR, or the Taxpayer Bill of Rights, is managed.
The agreement protects two pending bills that would create a new tax write-off for families and expand the state credit for low-income earners. Both would tap into the state’s surplus tax revenue — something Polis strongly opposes.
The Colorado Sun editor David Krause joined KUNC's Michael Lyle, Jr. to break down the potential impacts of this deal.
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"It's really an escalation of the Democratic-led legislators efforts to reimagine TABOR, which is really the darling of the conservative movement, as a vehicle for progressive policies," said Krause. "Higher earners pay more in income taxes, so they receive the most financial benefit from a blanket rate cut. So we should see the income tax rate dropped...and the sales tax is expected to drop as well."
Krause also said the deal should have enough support to pass and be signed by Polis, since both chambers are strongly controlled by the Democrats.
"But that doesn’t mean there’s (not) pushback, especially from Republicans who have been wanting to lower the sales tax but also keep sending the refunds back to residents when we have the surplus," added Krause. "Conservatives railed against other pieces of the deal, calling the dramatic expansion of tax credits an 'egregious' attack on TABOR."
Krause also said the amount of additional TABOR refunds will depend on what the state’s final revenue picture looks like. That will not be revealed until at least September, when budget officials will provide an update on the situation.
