Colorado lawmakers consider redirecting TABOR refunds to low-income families

Supporters say the plan would cut child poverty in half. Meanwhile, lawmakers are also considering a plan to cut taxes.
TABOR refund check
Posted at 7:54 PM, May 01, 2024
and last updated 2024-05-02 12:22:09-04

DENVER — With just one week remaining in the 2024 legislative session, Colorado lawmakers are considering a new plan that would cut taxes and redirect TABOR refunds to lower-income families.

While Colorado's TABOR amendment requires the government to refund surplus money to taxpayers, lawmakers can decide how to distribute those refunds. The Legislative Council Staff says TABOR allows lawmakers to use "any reasonable method" to refund the money.

Those who support refunding part of that money in the form of tax credits to lower-income families say it will reduce child poverty in Colorado. Heather Tritten, president and CEO of Colorado Children’s Campaign, a child policy advocacy organization, said child poverty is often hidden in plain sight.

“There are 133,000 low-income children in Colorado,” said Tritten. “There are a lot of families in the state who are struggling to make ends meet."

That’s why she supports the plan to redirect about $700 million in TABOR refunds from wealthier families, who pay more in taxes, to lower and middle-income families. Speaker Pro Tempore Chris deGruy Kennedy, who is sponsoring the measure to create new child tax credits, said the plan will cut child poverty in half.

“This historic effort will significantly reduce childhood poverty in Colorado, boost the incomes of hardworking families and help millions of Coloradans who are feeling the greatest impacts of the cost of living in our state,” said deGruy Kennedy. “Tax credit policies that benefit children and families who could see up to thousands of dollars back under this bill will ensure our tax code works for more Coloradans and help address childhood poverty. I’m proud that we are passing legislation to help Coloradans afford essentials like rent payments and groceries and boost the incomes of thousands of families across the state.”

Under the proposal, families with children under age six could receive up to $3,200 per child. Families with children between ages six and 16 could receive $2,400 per child.

“These sorts of proposals can make a huge difference for helping them pay for childcare or helping them make those payments on their electrical bill or their groceries,” said Tritten.

The tax credits come at a crucial time. A federal child tax credit, which was passed during the pandemic, was allowed to expire.

“When that went away, that meant that families fell back into poverty,” said Tritten. “This will help counteract that and move these families back out of poverty.”

Lydia Waligorski with Clayton Early Learning in Denver said the tax credits helped families who needed it most.

“If Congress had renewed that child tax credit, we would've lifted an additional 3 million kiddos out of poverty [nationwide],” said Waligorski. “The tax policies that Colorado is working to adopt really are building off of some of the successes that we saw at the federal level.”

The expanded tax credits are part of a larger bipartisan deal, which includes a proposal to cut income taxes. In his State of the State address earlier his year, Gov. Jared Polis called for Democrats and Republicans to work together to cut income taxes.

The Republican leader in the Senate, Paul Lundeen, is one of the main sponsors of the bill to cut income taxes. He said it would put about $450 million in the pockets of Coloradans.

“This historic income tax cut is the type of relief the people of Colorado have asked us to deliver, and I’m grateful to help make it happen,” said Lundeen.

While they may support the bipartisan tax-cutting bill, Republicans in the House voted against expanding tax credits on Wednesday, saying TABOR refunds should not be distributed in this way.

“It’s not good legislation. It’s not good legislation to pick winners and losers,” said State Rep. Brandy Bradley. “I am not here to pick winners and losers.”

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