Colorado
As new tax credits reroute money from budget, lawmakers brace for less certain budget growth
Even as Colorado enacts drastic changes to its tax policy, economic forecasters still expect the state to hit the constitutional cap on revenue collections in coming years.
But, the state could flirt with falling below the cap, set by the Taxpayer’s Bill of Rights, for the first time in half a decade during the adjustment period. The TABOR cap grows based on population growth and inflation, and money collected over it needs to be refunded to taxpayers.
Greg Sobetski, the chief economist for the Legislative Council Staff, didn’t raise any red flags during a forecast Thursday but acknowledged “a new set of budget circumstances” for state officials to navigate after years of explosive growth in state revenues. That growth resulted in billions of dollars being refunded to taxpayers in recent years, most notably through direct payments in fall 2022 and through tax returns this year.
Lawmakers this past legislative session, however, passed more than 30 bills either adjusting or creating new tax credits, according to a tally by the governor’s office. They include expansions to the earned income tax credit for the lowest-income Coloradans, senior housing tax credits and, if certain economic triggers are met, a new credit potentially worth thousands of dollars to families.
Collectively, the credits will reroute hundreds of millions of dollars — if not more than a billion — per year in coming years from state coffers, though it still ends up Coloradans’ wallets. In the next fiscal year, which begins July 1, the credits could also push state revenues below the TABOR cap. Economists for the legislative branch and governor’s office both expect revenue to remain above the cap, but Sobetskis’s office, in particular, warned a routine margin of error that comes with predicting the future could drop that below the TABOR cap.
Legislative forecasters expect $1.4 billion in revenue collected above the revenue cap this fiscal year, which ends July 1, will need to be refunded. They expect it to drop to about $328 million next fiscal year before bouncing back to $1 billion-plus for the fiscal year that begins July 1, 2025.
“Even without a recession, you could end up in an environment, easily, within the realm of normal forecast error where state revenue is under the (TABOR) cap,” Sobetski said.
Forecasters for the governor’s office were more optimistic and still expect nearly $700 million in money over the cap will need to be refunded for the next fiscal year. Exact TABOR refunds for the upcoming tax year won’t be set for months still and depend on future forecasts.
Overall, forecasters expected continued economic growth and lower chances of a recession in the immediate term. But, economic activity is being stymied by persistently high interest rates. State economists had originally expected multiple interest rate cuts from the Federal Reserve this year, and when those didn’t materialize, they revised state economic growth expectations down, Sobetski said.
“Because we’re expecting interest rate cuts to happen later, we’re not expecting the interest rates to accelerate as quickly,” he said.
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Colorado
Colorado man heads to Washington, D.C., to gain support for Marshall Fire survivors
Four years after the fire, recovery is still incomplete for some Marshall Fire victims. A Colorado man is joining wildfire survivors from across the country to push lawmakers to make changes and provide support for survivors still rebuilding.
Recently, a historic $640 million settlement was reached with Xcel Energy, but the Coloradans who lost everything in the Marshall Fire might not be receiving all the money that they’re owed. Some settlements could be taxed, while others were paid in full.
“I was the fourth responding fire engine to the Marshall Fire. By the end of the night, I was triaging homes in the neighborhood that I grew up in,” said former firefighter Benjamin Carter. “I’ve seen how much the community’s hurting, and I just wanted to do whatever I could to help.”
Carter is now fighting for those who lost their homes, including his mother. He’s working with an organization called After the Fire, joining up with wildfire survivors in Oregon, Hawaii and California. This week, Carter flew to Washington, D.C., to speak with lawmakers about how they can help survivors rebuild.
In 2024, lawmakers passed the Federal Disaster Tax Relief Act, which exempted wildfire survivors from taxes on related settlements, among other tax relief. But the bill expired last week, shortly after Xcel agreed to settle over the Marshall Fire.
“If the people don’t have to pay taxes on the damages, then it helps them rebuild,” Carter explained. “Some of the smaller attorneys still haven’t received payment, so all those people will be subject to those taxes; all the attorney fees, and what the actual settlements end up being. And, of what they’re actually getting at the end of the day, that’s been a huge challenge.”
Congress has already proposed extension options. But Carter hopes that by sharing their stories, legislators will act before survivors lose anything else.
“With a lot going on in Washington and everything, the representatives don’t always know about all the issues. And so, we want to educate them on this issue and hopefully gain their support,” Carter said.
Colorado
Boebert takes on Trump over Colorado water
Colorado
Colorado attorney general expands lawsuit to challenge Trump ‘revenge campaign’ against state
Attorney General Phil Weiser on Thursday expanded a lawsuit filed to keep U.S. Space Command in Colorado to now encapsulate a broader “revenge campaign” that he said the Trump administration was waging against Colorado.
Weiser named a litany of moves the Trump administration had made in recent weeks — from moving to shut down the National Center for Atmospheric Research to putting food assistance in limbo to denying disaster declarations — in his updated lawsuit.
He said during a news conference that he hoped both to reverse the individual cuts and freezes and to win a general declaration from a judge that the moves were part of an unconstitutional pattern of coercion.
“I recognize this is a novel request, and that’s because this is an unprecedented administration,” Weiser, a Democrat, said. “We’ve never seen an administration act in a way that is so flatly violating the Constitution and disrespecting state sovereign authority. We have to protect our authority (and) defend the principles we believe in.”
The lawsuit, filed in U.S. District Court in Denver, began in October as an effort to force the administration to keep U.S. Space Command in Colorado Springs. President Donald Trump, a Republican, announced in September that he was moving the command’s headquarters to Alabama, and he cited Colorado’s mail-in voting system as one of the reasons.
Trump has also repeatedly lashed out over the state’s incarceration of Tina Peters, the former county clerk convicted of state felonies related to her attempts to prove discredited election conspiracies shared by the president. Trump issued a pardon of Peters in December — a power he does not have for state crimes — and then “instituted a weeklong series of punishments and threats targeted against Colorado,” according to the lawsuit.
The lawsuit cites the administration’s termination of $109 million in transportation grants, cancellation of $615 million in Department of Energy funds for Colorado, announcement of plans to dismantle NCAR in Boulder, demand that the state recertify food assistance eligibility for more than 100,000 households, and denial of disaster relief assistance for last year’s Elk and Lee fires.
In that time, Trump also vetoed a pipeline project for southeastern Colorado — a move the House failed to override Thursday — and repeatedly took to social media to attack state officials.
The Trump administration also announced Tuesday that he would suspend potentially hundreds of millions of dollars of low-income assistance to Colorado over unspecified allegations of fraud. Those actions were not covered by Weiser’s lawsuit, though he told reporters to “stay tuned” for a response.
Weiser, who is running for governor in this year’s election, characterized the attacks as Trump trying to leverage the power of the executive branch to exercise unconstitutional authority over how individual states conduct elections and oversee their criminal justice systems.
In a statement, a White House official pushed back on Weiser’s characterization.
“President Trump is using his lawful and discretionary authority to ensure federal dollars are being spent in a way that (aligns) with the agenda endorsed by the American people when they resoundingly reelected the President,” White House spokesperson Abigail Jackson said.
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