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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.


‘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.

Selling Gold Watches in Colorado November 24, 2007

Posted by awatcher in Colorado Governor, Colorado Legislature.
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Holy Cow!  Some fool invited me to blog here, too.

“Gold watching” is an old tradition among those who allocate government funds.  It is a term for putting something that the taxpayer or tax consumer really wants below the funding line as a means of getting as many programs with less support as possible funded (above the line).

Anyone who has observed Colorado politicians in the past few years has seen gold watching being used against the taxpayer’s interest in the most classic way.  Ref C was supposed to be a timeout from TABOR to solve three problems.  Borrowing from a Mark Hillman – Amy Oliver study:

Voters were assured by Ref C proponents that K-12 education, colleges and universities, and health care would split the lion’s share of the resources if the measure passed…

However, a closer look at the state budget shows that the supposed beneficiaries have not benefited nearly as much as the  remainder of the state budget.  Since the 2005-06 budget, passed prior to Ref C, general fund spending has increased by $1 billion, or 16.1 percent. Spending on Ref C “targets”—K-12, higher ed and health care—has grown by just 11.9 percent, or $557 million. Meanwhile, the remainder of the general fund, which wasn’t targeted for a Ref C infusion, has grown by 28.7 percent, or $446 million.

Now that Bill Ritter and his band of merry taxaholics control the legislature, they have conveniently forgotten their promises to the public.  They know that the public wants more money spent on higher education, so they will ask for another, targeted tax increase, with the money to come out of individual taxpayer’s pockets.  They think that the public can be tricked into paying for the same gold watch (higher education) two or three times while they siphon huge sums for other less popular spending projects.

Another gold watch tactic is to use an unpopular tax source to fund less popular programs.  Sin taxes are traditional sources of revenue.  No non-smoker  likes smokers, and the more it costs to smoke, a voter might think, the fewer smokers there might be. 

It is very likely that the next “sin” tax target will be the oil and gas industry, specifically, severance taxes.  With Oil hovering around $100 a barrel and Natural Gas that is like to hit $10 per thousand, what voter wouldn’t be willing to see the state take some of that money and use it for … the voter will hardly care.

The Republicans have tried to head them off at the plateau by proposing that severance taxes go toward funding higher education.  This ploy recognizes two facts 1) higher severance taxes are likely to be approved by the voters and 2) the voters want a good higher ed program.  If the Republicans can direct that fire-hose of new government funding into higher ed, they might, just possibly, be able to slow the growth of government in other areas.

The Democrats are having none of this because it destroys their gold watch plans.  Care to bet that the four month delay in approving drilling on the Roan Plateau that Ken Salazar negotiated with BLM by holding a political appointee hostage was more about giving Democrats time to figure out how to use the severance taxes and still be able to gold watch education than it was about saving the plateau?

Since this isn’t my blog, (he he) I’ll make a rash prediction:  Before Bill Ritter leaves office, he will find a way to remove his objections to drilling on the Roan Plateau as long as the windfall (more like avalanche) in new money goes to his own projects, none of which will be higher education.  Taxpayers will be asked to fund Higher Ed by digging deeper into their own pockets – again!

Note:  This is the first time I’ve used this blogging software, so I have no idea about what I will get or if I can edit it.  Have patience.

I am, as always, a watcher, though here, I might be “awatcher”