Democrats have drawn on surplus money for other relief
The measure joins a suite of other pitches by the majority Democrats to direct tax dollars collected over the TABOR cap toward lower- income Coloradans, including a further expansion of the Earned Income Tax Credit and a bill to provide additional tax relief to people 65 and older.
But as a consequence, the approach would chew into the tax refunds Coloradans have come to expect in recent years.
It also pits legislative Democrats against Polis, who wants an income tax cut to be part of any broader tax reform package. That desire — reiterated in Polis’ January State of the State address — is a nonstarter for some Democratic lawmakers, who argue that such a reduction would mostly benefit the state’s wealthiest earners.
Earlier this week, a committee controlled by Democrats killed a Republicanbacked income tax cut proposal.
In a statement Friday, Polis spokeswoman Shelby Wieman said the governor “looks forward to a conversation on the child tax credit and other important tax policies — including his priority of a temporary rate cut to the income tax — during this legislative session to provide relief to all Coloradans and to help our economy grow.”
Degruy Kennedy said he’s working with the governor’s office on a compromise that would include cuts to the state’s income and sales tax rates in conjunction with the expanded tax credits for families.
He said this effort was “very much about planting the flag” to establish the view that the state can use TABOR surplus money to tackle societal issues. He expects a fight over tapping into the surplus, especially because it has become a political tripwire after the failure of Proposition HH, which voters soundly defeated in November.
Proposition HH would have raised the TABOR revenue cap to pay for education and cut property taxes. Republicans in particular have taken HH’S defeat to mean voters don’t want lawmakers to touch TABOR surpluses — or their refunds.
Degr-uy Kennedy, though, framed a rhetorical question for Colorado voters: “Are you willing to give up a little bit of that ( TABOR surplus) if this could be a transformational policy change for families in Colorado who are really living on the edge?”