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
Grand jury indicts over half the officers in a rural Colorado county
DENVER — Five of the seven law enforcement officers in a rural Colorado county, including the sheriff, have been indicted in an investigation into allegations of misconduct, prosecutors said Friday.
A grand jury indicted Costilla County Sheriff Danny Sanchez and former Deputy Keith Schultz on charges of allegedly mishandling human remains discovered in October 2024, according to court documents. A man who found the remains and reported them to the sheriff’s office said Sanchez and Schultz took only the skull and left the other remains behind, including teeth, court documents state.
Two months passed before Schultz wrote a report, saying he left bones in a bag on his desk and went on another call, the documents state. A coroner’s official said he received the skull in an unlabeled paper bag from the sheriff’s office, the documents state.
Separately, Undersheriff Cruz Soto, Sgt. Caleb Sanchez — the sheriff’s son — and Deputy Roland Riley are charged in connection with the use of a Taser against a man who was suffering a mental health crisis in February and tried to leave when they insisted he go to the hospital, according to the documents. The man said he was “roughed up” by deputies and was left with broken ribs, according to the indictments.
Soto was charged with failing to intervene and third-degree assault, according to court documents. Caleb Sanchez and Riley were charged with second- and third-degree assault.
In announcing the indictments, 12th District Attorney Anne Kelly said she’s committed to investigating and prosecuting crimes no matter the offender.
“I cannot and will not ignore violations of the trust that a community should have in their police. No citizen of the San Luis Valley should have any doubts about the integrity of their police force,” Kelly said at a news conference Friday evening.
A person who answered the phone Friday at the sheriff’s office said it had no immediate comment but planned to post a statement online. Phone numbers listed for Danny Sanchez, Soto and Riley did not work. Caleb Sanchez did not have a listed number. An unidentified person who answered a number for Schultz referred The Associated Press to an attorney, Peter Comar. The AP left a message Friday for Comar seeking comment.
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Colorado
Colorado residents face earliest water restrictions ever — a harbinger of worse to come
As a result of a snow drought and a heat wave that have both set records, some Colorado residents face the earliest restrictions on their water use ever imposed.
Denver Water announced Wednesday that it is seeking a 20% cut in water use, asking people to turn off automatic watering systems until mid-May and restricting the watering of trees and shrubs to twice a week.
“The situation is quite serious,” said Todd Hartman, a spokesperson for the utility. “We’re in such a dire situation that we could be coming back to the public in two or three months and saying you’re limited to one day a week.”
It is the earliest in the year that Denver Water has ever issued a restriction, Hartman said.
Colorado’s snowpack peaked at extremely low levels on March 12 — nearly a month earlier than usual — then cratered during the recent heat wave that cooked nearly every state in the West.
“We already had the lowest snowpack we’ve seen since at least 1981, and now, with the heat wave conditions, we’ve already lost about 40% of the statewide snowpack” since the March 12 peak, said Peter Goble, Colorado’s assistant state climatologist. “Conditions are looking more like late April or early May.”
The water restrictions are a harbinger of what’s to come in many Western states as officials try to manage widespread drought concerns. Nearly every snow basin in the Mountain West had one of its warmest winters on record and is well behind normal when it comes to water supply, according to the U.S. drought monitor. The dwindling snowpack is likely to raise the risk of severe wildfires, hamper electricity generation at hydropower dams and force water restrictions for farmers.
Hartman said nearly every community east of the Rockies, along Colorado’s front range, is in much the same boat as Denver.
City Council members in Aurora are considering similar water restrictions; reservoirs there stand at about 58%, according to the city’s website. In the town of Erie, officials declared a water shortage emergency on March 20 after they observed a massive spike in consumption.
Gabi Rae, a spokesperson for the town, said Erie was perilously close to having taps run dry because so many residents had started watering their lawns early amid the unseasonable heat.
“We were a day away from running out of water. That’s why it was such an emergency,” she said.
Erie officials demanded that residents stop using irrigation systems altogether.
Goble said this month’s heat wave has set records in every corner of Colorado, sometimes by double digits.
“I can’t remember seeing a single heat wave that broke this many records, and seeing it across such a large portion of the country is certainly eye-popping,” he said, adding: “I’m located in Fort Collins, and we got up to 91 last Saturday. The previous record for March was 81, so we smashed that record. And it wasn’t just one day, either.”
Denver Water, which serves about 1.5 million residents in the city and its surrounding suburbs, gets about half of its water from the Upper Colorado River Basin and the South Platte River Basin. The latter’s snowpack was at about 42% of normal Tuesday, the utility reported. The Upper Colorado River Watershed was at 55%.
Systemwide, Denver Water’s reservoirs are about 80% full, which is only about 5 percentage points lower than in a typical year.
“That sounds pretty good,” Hartman said. “Except that what we’re not going to be able to rely on is that rush of water that will bring those reservoirs back up, because the snowpack is so low.”
In other words, the snowpack — a natural water reservoir — is mostly tapped already and won’t replenish reservoirs later this spring and into summer, when runoff usually peaks.
In Erie, city workers plan to aggressively police water use until sometime next week using smart meters that monitor residential usage. Rae said the city is also sending utility workers to patrol neighborhoods and look for sprinklers that are turned on.
“People have been kind of annoyed with how aggressive we were, and I don’t necessarily think they understand the ramifications if we weren’t,” Rae said. “It is an actual serious emergency situation. We were so close to reaching empty, there would literally be no water coming out of the taps — hospitals, schools, fire hydrants, your home would have no water.”
Although the limits on outdoor watering will be lifted soon, Rae expects more restrictions later this spring and summer.
Colorado
Suddenly hazy skies in Denver prompt some residents concerned about wildfire smoke to call 911
Some people who live in the Denver metro area on Thursday afternoon were making calls to 911 after skies became noticeably hazy and winds kicked up. It was due to smoke from wildfires in Nebraska moving into Colorado. A cold front also was moving through the Front Range, and there is dust in the air.
The poor air conditions led to reduced visibility downtown after 3 p.m. Several of CBS Colorado’s City Cams showed dust or smoke in the air.
Temperatures were expected to drop by as much as 20 to 30 degrees with the cold front.
The suddenly dusty skies prompted at least one fire agency to put out a plea to residents to please only call 911 “if you see flames.” That warning was put out by South Metro Fire Rescue, which shared a photo on X of an office building with haze visible outside.
South Metro Fire Rescue said in their post that the smoke is from Colorado’s neighbor to the east. They called it a “significant haze” in the air.
Earlier this month, the Morrill Fire and the Cottonwood Fire burned a significant amount of Nebraska grassland and ranchland. They have mostly been contained by firefighters. Nebraska Gov. Jim Pillen said those two fires combined with several others have burned approximately 800,000 acres of land. On Thursday, Pillen announced that he is signing several executive actions intended to ease the burden caused by the fires.
There were no wildfires burning in the Denver metro area on Thursday afternoon.
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