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Statehouse Dems Struggling to Give Taxpayers Even a Small Break February 27, 2008

Posted by bendegrow in Colorado Legislature, Referendum C.
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With ever more of Colorado taxpayers’ money in hand at the State Capitol these days, following the Referendum C “forever tax increase,” the Denver Post reports the Democratic majority is having a hard time deciding whether to give us even targeted small breaks – out of fear that a few tax incentives now may cut into future state revenues:

For the past several weeks, Democrats in both chambers have been quietly debating a thorny issue: Should they vote for bills that reduce the state’s tax revenue while Referendum C is in place?

Ref. C is a five-year timeout from constitutional state spending limits. When that window closes in 2010, the highest amount of yearly revenue during the five-year period becomes the new figure on which to calculate future spending limits.

The quandary, then, is whether voting for small tax incentives now will bring spending constraints later. And what makes the question all the more difficult, the Democrats say, is that most of the tax-incentive bills — which range from economic development packages to encouraging people to mitigate fire danger around their homes — are worthwhile.

“I like most all of the tax credits,” Sen. Jim Isgar, D-Hesperus, said at a Democratic caucus meeting last week. “But it’s easier for us to take a position that we support none than picking and choosing.”

At the same meeting, Sen. Ken Gordon, D-Denver, said it might be better to vote down the tax incentive proposals and use the money saved to fund programs that accomplish the same thing.

The remarks of Sen. Isgar and Sen. Gordon give evidence of the sort of mentality that remind us how out of touch some state lawmakers have become. At least they have counterparts showing a modicum of common sense:

Other Democrats, though, said it would be wrong to take a blanket position of voting against tax incentives.

“The best thing to do,” said Sen. Brandon Shaffer, D-Longmont, “is to consider these bills on their merits.”

In the House, Speaker Andrew Romanoff, D-Denver, said Democrats are struggling with similar questions.

“We’re trying to balance a series of competing concerns here,” he said.

Among Republicans in the Senate, no such conversations are taking place, said Sen. Mike Kopp, R-Littleton. Instead, Kopp said lawmakers should give taxpayers a break, in light of Ref. C and Gov. Bill Ritter’s controversial property-tax freeze that is expected to bring in an extra $3.8 billion by 2017.

“We’re trying to protect the taxpayers,” he said.

Based on the most recent CUT legislative ratings, Sen. Kopp makes a mostly accurate point. With a rating of 76 out of 100, Kopp is one of the leading taxpayer champions in the state senate. And the lowest-rated Senate Republican (Sen. Ken Kester, 33.33) is considerably more taxpayer-friendly than the highest-rated Democrats (none scored higher than 12).

Still, there is room for improvement on all sides – albeit a lot more room for improvement among the majority party. Of those Democrats highlighted in the article, Sen. Shaffer was the highest with an 8, while Isgar, Gordon, and Speaker Romanoff each tallied a highly anemic 4.

Stories like the one in the Post today remind us how poorly taxpayers are being represented at the State Capitol.

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‘The most hated tax in the state’ February 19, 2008

Posted by jgmpk in Colorado Legislature.
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That’s what the Rocky calls Colorado’s business personal property tax, in a story on a bill to abolish it making its way through the legislature:

A Golden businessman jumped through hoops to figure out his business personal property tax bill, which came to a whopping $60.45.

Joe Schneckenburger, who owns rental property, complained to Rep. Joe Rice, D-Littleton. . . .

Opponents argue they pay sales tax when they buy computers, waste baskets, refrigerators, heavy equipment and such, and then pay corporate income taxes based on their profits. They question why on top of that they annually have to pay business personal property taxes on the equipment they own.

Naturally, the forms are labyrinthine:

The business personal property tax forms are based on deterioration schedules and are so time consuming — for the owner, the county and the state — that Rice estimated 42 percent of the revenue the tax brings in goes to administering it.

He introduced House Bill 1225, which would increase the number of small businesses that are exempt from paying the tax. Currently, businesses with less than $2,500 in taxable property are exempt. Rice’s bill raises the exemption to $7,000 over three years, with regular increases after that.

Under his bill, an additional 30,600 businesses would be exempt from paying what Rice called “a silly, complicated tax that no one can make sense of.”

The bill passed the House Finance Committee today.

What kinds of control on government spending growth work? February 18, 2008

Posted by davekopel in TABOR.
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A new article in the Cato Journal, by Robert Krol, examines various strategies for limiting government spending growth. He finds several methods to have proven success: Tax and Expenditure Limits (such as those in Colorado’s Taxpayer Bill of Rights), balanced budget requirements (a long-standing requirement in Colorado), and citizen initiatives (part of the Colorado Constitution since the early 20th century). In contrast, two methods have been shown not to work: Rainy Day Funds (which are often used to avoid tax and spend limitations), and term limits (which are actually associated with higher spending; legislative, but not gubernatorial, term limits are associated with lower taxation).

So Much Tax Money, So Many Ways to Spend It February 18, 2008

Posted by awatcher in Uncategorized.
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There is a gusher of tax money awaiting those who can figure out how to tap and spend it, and the environmentalists are working over time to lay claim to it.

We have written earlier about the severance tax and how it could grow to unimaginable sums of money if and when the oil companies figure out how to recover one million barrels of oil per acre from oil shale lands.

The environmentalist extremists have set their sights on that money and the power it would bring if only they could control it.  The Aspen Times reports:

Environmentalists introduced four ballot proposals Thursday to increase the taxes paid by the oil and gas industry as they seek to build support for a statewide campaign.

The move comes as state lawmakers and the governor are still considering whether to ask voters to increase the state’s severance tax this year.

The coalition, which includes Trout Unlimited, Environmental Defense, The Wilderness Society and others, wants to use the estimated $200 to $300 million the proposed hikes could generate to boost renewable energy, protect wildlife habitat and help communities impacted by the boom. Joe Neuhof, West Slope field director for the Colorado Environmental Coalition, said some coalition members have been involved in the Capitol discussions about whether to raise Colorado’s tax — the second-lowest in the West — but wanted to put forward their priorities for how the money should be spent as they continue to talk.

These people aren’t thinking small:

The four ballot proposals include different combinations of getting rid of the current tax exemption for small wells, adding an extra 3 percent tax for all oil and gas wells and setting a new 10 percent tax rate for wells that produce more than $300,000 a year. Some would also bar energy companies from deducting their property tax in calculating the severance tax they owe.

One of the more likely goals of imposing a 10% severance tax is to slow down or even stop oil and gas development in the state.  Oil shale recovery has been delayed in part because of technology, but also because the proposed technology is so expensive.  If the environmentalists could add an extra 10% to the costs of recovery, they might be able to make it impossible to recover oil shale economically until the price of a barrel of oil hit $150.

In addition, by putting a dollar threshold at which taxes begin to be collected, they can depress the production of working wells.   As the price of oil and gas inevitably rise, every well will hit that threshold, but the owners will want to curtail production to avoid the tax.

This just follows the usual pattern.  If there is to be a tax increase, wouldn’t it be better if the proceeds went to more normal government activities such as funding higher education, building prisons, or building and maintaining roads? 

Date Set for Tax Hike Showdown February 11, 2008

Posted by bendegrow in Colorado Governor, Property tax increase, statewide, TABOR.
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Face the State has the latest on the court case requesting a vote of the people on Gov. Bill Ritter’s statewide property tax increase:

The State Board of Education, claiming that CDE is the wrong agency to be targeted, has asked the court to be removed as a defendant. Meanwhile, Ritter has sought to intervene as defendant. A Denver District Court hearing has been set for May 5.

State Board of Education member Bob Schaffer, R-Fort Collins, believes Ritter has a lot at stake in the courts’ pending decision, having approved a property tax hike over the objections of the state’s attorney general.

“He has a clear interest in proving the attorney general wrong,” said Schaffer. “While the massive tax increase bill was passing, the legislature and governor understood that they were likely in violation of the law and the constitution.”

I know, I know. The money from the property tax increase is supposed to be “for the children.” Clearly, since I want to honor the state constitution and have the people of Colorado vote first, this makes me very cold and heartless person. (more…)

Roads & Bridges Shut Out, Maybe February 5, 2008

Posted by awatcher in Uncategorized.
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The Gazette isn’t very happy that Bill Ritter isn’t buying us new roads and bridges:

Switching from practical to principled arguments, of the big three issues competing for Ritter’s support, education and health care are not really government’s business; transportation is. Proponents for more government involvement in education and health care like to point out that the free market doesn’t work in those areas. Actually, it does, it just doesn’t work in ways those folks like. The market allocates limited resources to the places consumers deem them most needed.

Of course, Bill Ritter wants it both ways.  He wants the legislature to take the heat on the $100 “fee” while he goes to the voters on another subject.