DENVER — Gov. Jared Polis announced Monday each Colorado taxpayer will receive a one-time tax refund of $400, or $800 for joint filers, due to a record state surplus.
As part of a proposal that will be introduced, the Colorado Dividend, all Colorado taxpayers who file their 2021 tax returns by May 31, 2022 will receive their rebate in the mail by August or September. About 3.1 million people will receive that rebate, a rebate totaling $1.4 billion.
However, the $400 refund is the same for everyone, regardless of income or how much in taxes each person actually paid.
During the press conference, the governor stressed the need to get the money out to families as quickly as possible with inflation.
“We know that this last year has been difficult. Rising prices, gas at $4 a gallon, groceries costing more,” Polis said. “Rather than sit on this money, we know that $400 will help people now.”
“That is a month’s worth of groceries for the average family in Colorado,” added Senate Majority Leader Dominick Moreno, D-Commerce City. “That is the kind of relief that we need to be providing to Coloradans right now in wake of rising inflation that we are seeing across the country and right here in our state.”
Polis credited the economic success Colorado has seen as the reason the state is able to introduce a proposal that provides the one-time rebates early, mentioning the state has the fifth strongest economy in the country and the recovery of more than 100% of the jobs lost during the pandemic.
“Our resilience as a state and the steps we’ve taken to position Colorado to thrive are boosting our economy and boosting our recovery,” said House Speaker Alec Garnett, D-Denver. "This is Coloradans’ money. This is their money, and we’re making sure that we make government efficient in getting those dollars back to them as quickly as possible.”
Under the Colorado Taxpayer Bill of Rights, when there’s a TABOR surplus, it gets refunded to taxpayers. What would normally come to taxpayers in April 2023 is being given in an advanced payment, due to the proposal, to address the rising costs of inflation, officials said.
Polis also confirmed during the press conference the surplus was enough to trigger a reduction in the income tax next year as well as additional money that is refunded through the six-tiered sales tax mechanism next April.
Republicans, however, have criticized Democrats for taking credit for the refund, saying the governor's party has been behind numerous fee increases and that they would prefer for people to be able to keep more of their money throughout the year rather than be given a big refund.
"The reality is we can give money back or we can just not take the money away from people to start with," said Sen. Paul Lundeen, R-El Paso. "Now, all of a sudden, because politically it's getting a little bit hot, they want to give money back."
Lundeen considers the move to be political pandering during a big election year.
Metropolitian State University of Denver political science chair Robert Preuhs agrees that there is inevitably a political motive behind the announcement.
"It really provides an opportunity for elected officials to really take credit for something that they didn't have a whole lot to do with. In the case of TABOR, particularly, this is something that's forced upon them by a constitution," Preuhs said. "I think every party and every elected official is in love with the idea of letting taxpayers know that this check is in their pocket."
Nationally and statewide, Preuhs believes inflation is one of the top priorities for voters this election year, so there could be a marginal benefit for the current administration when people receive those TABOR refunds early, right in time for the election.
Preuhs also points out that Democrats have historically opposed TABOR and have tried to either scale it back or get rid of it altogether. In fact, Moreno, who spoke at Monday's press conference, wrote an op-ed in The Denver Post last September about the downsides of TABOR refunds.
"This coming year, taxpayers will see rebate checks, but those will come at the expense of better funding for public services that reduce costs for all of us," the op-ed read. "In addition, TABOR has reduced budget flexibility, which harms our state’s credit rating, thus increasing the interest costs for any state government debt."
When asked if introducing the proposal was because of political pressure during an election year, Polis said the decision was due to the economic pressure Coloradans are facing and that “it would make no sense” to delay the refunds when Coloradans need them now.
In response to the announcement, Colorado GOP Chairwoman Kristi Burton Brown released the following statement:
"I'm happy that Jared Polis and the Democrats in the state legislature have publicly reversed course and are now joining Republicans in touting the Taxpayer's Bill of Rights."
House Minority Leader Hugh McKean, meanwhile, said it was "unfortunate" Polis and the Democrats "stepped up to agree with Republicans that Colorado families should keep more of their hard earned dollars" with only two weeks left of the legislative session.