Colorado

New Colorado tax credit could lift 50,000 children out of poverty, is latest to tap TABOR surplus

Published

6 months ago

June 1, 2024

New Colorado tax credit could lift 50,000 children out of poverty, is latest to tap TABOR surplus

Boasting that child poverty in Colorado would soon be cut nearly in half, Gov. Jared Polis on Friday signed a large new tax credit for low-income families into law.

The ceremony put an underline on a legislative session that featured state policymakers looking again and again to the state surplus to flatten inequalities. Lawmakers passed dozens of new tax credits this year that tapped into massive revenues the state couldn’t keep and otherwise would have to return through refund checks.

The new family affordability tax credit that received Polis’ signature is by far the largest individual tax credit in terms of cost. It is also, advocates say, among the most impactful.

They expect it to lift more than 50,000 children out of poverty.

The new law, passed as House Bill 1311, will use roughly $700 million per year that comes in over the state revenue growth limit set by the Taxpayer’s Bill of Rights, or TABOR. It will send the poorest Colorado families $3,200 per child younger than 6. The amount of the credit will scale down as children grow older and family incomes increase, eventually zeroing out at $85,000 per year for joint filers and once children turn 17.

“Kids don’t choose who their parents are or what their income level is — or how they grow up,” Polis said during the bill signing ceremony at a Denver preschool. “Making sure kids everywhere have food on the table (and) have the support that they need to grow up is a big deal.”

The child tax credit stacks atop others passed or expanded by the legislature this year, including an increase to the state’s match of the Earned Income Tax Credit. In all, the new policies tap billions of dollars from projected TABOR surpluses in coming years that would have to be returned to taxpayers one way or another.

Democratic lawmakers, often over dissents from Republicans, opted mostly for directed credits rather than the general refunds that long have been typical in the state’s boom years.

How the new tax credits work

The Colorado Fiscal Institute, a progressive think tank involved in crafting the legislation, predicts families will receive as much as $4,400 a year per child 5 and younger through an expanded child care tax credit and the new family affordability tax credit.

Throw in the Earned Income Tax Credit increase, which matches up to 50% of the federal EITC that sends money to low-income households, and Colorado families could see significant financial help. The state EITC match doubled this year, amounting to nearly $1,900 extra for very-low-income working families with three or more children.

The credits depend on consistent TABOR surpluses and will be scaled down in less robust economic times. Caroline Nutter, the legislative coordinator for the think tank, estimates the credit changes will reduce the number of children in poverty — about 133,000 kids — by 40% in years when the credits are fully funded.

“What we’re really trying to do there is make sure families, even those making more than the median household income in Colorado, are receiving help,” Nutter said. “Raising kids in this state is not cheap. Even if you’re making $100,000 a year, it’s still a big cost to bear.”

The credits, while stacking together, work differently:

The EITC expansion is based on a federal tax credit worth between $600 (for individuals without children) and $7,430 (for families with three or more children). Qualification limits range from $17,640 per year in adjusted gross income for a single person up to $63,398 for joint filers. Colorado will match up to 50% of the federal credit if state growth is on a solid footing.
The child care tax credit covers a percentage of child care costs, depending on household income. At most, the federal credit covers about $1,050 for one dependent child and up to $2,100 for two or more. The Colorado credit matches up to 70% of that for households with incomes of $60,000 or less.
The new family tax credit scales down based on family income as well as the ages and number of children. Single filers making $15,000 or less per year in adjusted gross income — and joint filers making $25,000 or less — will receive up to $3,200 for each child younger than 6 and, for children ages 6 to 16, up to $2,400. The credit amounts decrease as incomes rise, with a cap of $75,000 for individual filers and $85,000 for joint filers.

Coloradans may benefit from other credits, too — notably a $1,500 credit for child care workers, home health care workers, personal care aides and certified nursing assistants making less than $75,000 per year that Polis also signed into law Friday. Earlier this week, he signed off on a new tax credit that covers two years of in-state college tuition for students whose families make $90,000 a year or less.

U.S. Senator Michael Bennet addresses graduating preschoolers at Denver KinderCare in Denver on Friday, May 31, 2024. (Photo by Zachary Spindler-Krage/The Denver Post)

On hand at Friday’s ceremony was U.S. Sen. Michael Bennet, who has championed a short-lived federal child tax credit that he’s hoping to revive in Congress next year by leveraging the looming expiration of tax cuts. He praised the state’s new credit.

“The family affordability tax credit testifies to the idea that we don’t have to accept those levels of childhood poverty as a permanent state of our economy, or our democracy, or our society,” he said. “I think the national leadership you’ve shown here is something that we will carry back to Washington, D.C. — to be able to say that because of your leadership, governor, Colorado now has the best anti-poverty legislation of any state in America.”

Do new credits undermine TABOR?

Together, Colorado’s new tax credits represent a reimagining of how state officials handle TABOR surpluses — while trying to stay within the constraints of the constitutional amendment passed by voters more than 30 years ago.

Traditionally, state revenue that’s over the cap would be returned to Coloradans largely through a six-tier system that gave higher-income households a bigger share under the idea they paid more in taxes. Nutter called that approach “wasteful” because it directs money to people who already have the most resources.

The Common Sense Institute, a nonpartisan, free enterprise-oriented think tank, noted that the money returned through tax credits still stays with Colorado taxpayers, versus going into government programs. But a CSI report on tax credits argues that the new approach “broadly undermines TABOR’s intent” by divorcing refunds from taxes paid.

In coming years, upwards of $1 billion per year that would typically be refunded through the six-tier system will instead go to targeted tax credits, according to its report.

Lang Sias, a former state representative and now a research fellow at the think tank, said the legislature “has effectively substituted its judgment on how those tax dollars should be spent over that of taxpayers who would otherwise see the refunds.”

“We’re moving away from a TABOR refund and toward a TABOR redistribution,” he said in an interview.

He didn’t weigh in on the merits of the new policies but questioned lawmakers’ decision to tie the new tax credits to the state’s surplus and, in some cases, to give them sunsets. Assuming they’re as beneficial as proponents say, both cases mean they may not be permanent policies.

The new tax credits also aren’t the only way state officials responded to a foreseeable future of $1 billion-plus surpluses. Polis fought for a $450 million income tax cut, which predominantly will benefit wealthier Coloradans, and a decrease in the state sales tax rate during economic booms.

Taxpayers can also continue to expect flat TABOR refunds when they file their taxes — albeit closer to the $115 range than the $700-plus amounts of recent years.

Nutter argued that while the shift will affect income brackets differently compared to the prior system, people across the spectrum still will see more money in their pockets — from the credits or, for wealthier people, through the tax cuts.

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Colorado

Seeking Revenge Against the Capitals | Colorado Avalanche

Published

4 hours ago

November 21, 2024

Press Room

Seeking Revenge Against the Capitals | Colorado Avalanche

Colorado Avalanche (10-9-0) @ Washington Capitals (13-4-1)

5 p.m. MT | Capital One Arena | Watch: Altitude, 9News, My20, Altitude+ | Listen: Altitude Sports Radio (92.5 FM)

For the second time in six days the Colorado Avalanche will faceoff against the Washington Capitals. Colorado will battle to split the season series after a 5-2 loss at Ball Arena on November 15.

Soaring Past the Flyers

The Avalanche beat the Flyers 3-2 at Wells Fargo Center on Monday. Cale Makar posted his 10th-career multi-goal game and Casey Mittlestadt added a goal. Additionally, Mikko Rantanen recorded two assists and Justus Annunen made 24 saves. Following a scoreless first period, Makar opened the scoring with a wrist shot from the slot at 8:30 of the second period after receiving Nathan MacKinnon’s set-up feed. Makar thought he had his second of the game at 10:44 of the middle frame, but the goal was taken off the board due to a successful Flyers challenge for goaltender interference. However, Makar would eventually double Colorado’s lead on the power play with his eighth tally of the season at 15:08 of the middle frame with a shot from the point that deflected off a Flyers player on its way in. The Burgundy and Blue took a 3-0 lead at 8:34 of the third period when Mittelstadt dispatched the rebound created by Rantanen’s shot into the net for his seventh goal of the season. The Flyers answered with goals from Owen Tippett at 11:48 and Tyson Foerster at 13:32 to cut their deficit to one, but the Avs held on to secure their 10th victory of the season.

Leading the Way

MacKinnon leads the NHL in points (34) and assists (27).

Makar leads NHL blueliners in goals (8), assists (19), and points (27). He’s tied for seventh among NHL skaters in points and tied for fifth in assists.

Rantanen is tied for sixth in the league in goals (12) and tied for seventh in points (27).

History

The Avalanche are 18-20-4 in 42 previous regular-season games against the Capitals. Colorado is 4-1-0 in its last five matchups against Washington dating back to the 2022-23 season.

Winning Out West

The Capitals beat the Utah Hockey Club 6-2 at the Delta Center on Monday. Alex Ovechkin scored twice, and Charlie Lindgren made 24 saves. Utah opened the scoring with a goal by Jack McBain at 3:05 of the first period but the Capitals responded with tallies from Dylan Strome at 7:46, Nic Dowd at 7:56, and Ovechkin at 11:05. Ovechkin extended Washington’s lead to three with a goal at 5:38 of the second period before Nick Bjugstad scored for Utah at 11:44 to make it 4-2 in favor of Washington entering the third period. Ovechkin did leave the game midway through the third period with a lower-body injury and has been placed on injured reserve and ruled week-to-week. The Caps added two more goals in the third period from Brandon Duhaime at 7:30 and Aliaksei Protas at 9:56 to win 6-2.

Putting Up Numbers on the Potomac

MacKinnon has posted 28 points (11g/17a) in 20-career matchups against the Capitals including 11 points (5g/6a) in 10 road matchups against them.

In eight previous meetings with Washington, Makar has recorded six points (2g/4a).

Rantanen has registered 19 points (8g/11a) in 14 previous games against Washington including eight points (4g/4a) on the road.

Capitals’ Contributors

Strome leads the Capitals in points (28) and assists (22).

Connor McMichael is second on the team in goals (12) and third in points (19).

Aliaksei Protas is fourth on the team in points (18), third in goals (7), and tied for third in assists (11).

A Numbers Game

10

Makar became the first defenseman in franchise history to record 10 multi-goal games.

3

The Avalanche have three players (MacKinnon, Makar, and Rantanen) in the top 10 in points. No other team has more than one.

165

The Avs have registered 165 high-danger shots on goal, which ranks sixth in the NHL.

Quote That Left a Mark

“Juice is great. I think he’s been great all year. [He made] some big saves, especially at the beginning there…So [it was a] heck of a job from Juice for sure.”

— Casey Mittelstadt on Justus Annunen’s performance on Monday

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Colorado

Residents rally to save Colorado Springs library on brink of closure

Published

12 hours ago

November 21, 2024

Press Room

Residents rally to save Colorado Springs library on brink of closure

COLORADO SPRINGS, Colo. (KKTV) – Hundreds of Colorado Springs residents showed up at the Pikes Peak Library District Board of Trustees meeting Wednesday night in a last-ditch effort to save the Rockrimmon Library.

The library is set to close December 1. This comes after the board voted to not renew the library’s lease due to financial issues.

In a statement posted on their website on November 8, the board called the decision to close Rockrimmon a difficult one.

“A library provides access to resources and materials to everyone in the community, so considering a closure goes against the grain of our hopes for PPLD. However, our District provides access to nearly 700,000 people across El Paso County. We must make decisions that sustain the entire District.”

More than 250 community members showed up to Wednesday’s board meeting to show their support for keeping the Rockrimmon location open with another 119 tuning in virtually.

Former Rockrimmon Library manager Steve Abbott said he was glad to see the turnout.

“It shows that the community will not give up and they are going to fight to keep this library open,” he said.

For most of the almost five-hour meeting, 43 speakers took turns pleading with board members to postpone the library’s closure, extend the lease another year, and reconsider their decision to close the library in the first place.

One of those who spoke before the board, Abbott said closing the library will leave a massive gap for the 30,000 people who live in the area.

“It leaves a big library desert in the Rockrimmon area,” he said. “For a child to use a library now, they’ll have to go over I-25, under I-25, over Academy, under Academy to get to a library, and it’s six miles away from where Rockrimmon was.”

Speaker and Rockrimmon resident Jennifer Walker said closing the library would also deprive the area of a much-needed community center.

“There is no YMCA, there’s nothing else,” she said. “This is where we meet other moms when we’re desperate to talk to another human being that’s not a toddler, this is where we go to work when we need a quiet space, this is where the elderly come to use the computer or to check out books.”

The fate of the Rockrimmon Library was not on the board’s agenda and those who left the meeting tell 11 News the meeting ended with no resolution.

Walker said residents are still exploring their legal options.

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Colorado

What’s the latest on the Colorado River negotiations?

Published

19 hours ago

November 20, 2024

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What’s the latest on the Colorado River negotiations?

The U.S. Bureau of Reclamation released a breakdown Wednesday of five potential paths forward for the fragile state-to-state negotiations surrounding Colorado River operating guidelines that must be updated by 2026.

The Colorado River, which is Southern Nevada’s primary source of water, holds a precarious future as the basin experiences historic drought and state leaders disagree on how to deal with shortages. The range of alternatives is possibly the last major announcement about negotiations to come from the Bureau of Reclamation under the Biden-Harris administration.

“We have worked tirelessly over the past several years to bring Colorado River Basin stakeholders together for a transparent and inclusive post-2026 process,” Reclamation Commissioner Camille Calimlim Touton said in a statement. “Today, we show our collective work. These alternatives represent a responsible range from which to build the best and most robust path forward for the Basin.”

What to know heading into 2025

The breakdown between two coalitions of states, the Upper and Lower Basins, centers around whether the Upper Basin — Colorado, Utah, New Mexico and Wyoming — should be required to take cuts to its water allocation past what’s known as the river’s “structural deficit,” or the 1.5 million acre-feet lost to evaporation and transport. The Upper Basin has argued that it takes too many cuts already because of its reliance on snowpack instead of big reservoirs.

The Lower Basin also has called for smaller reservoirs in the Upper Basin states to be included in discussions about cuts in water usage across the system.

Notably, one of the five alternatives is based on proposals from Native American tribes, calling for the government to account for undeveloped tribal water.

The acknowledgement of the ongoing duel between the Upper and Lower Basins is the “Basin Hybrid” alternative, which appears to fall somewhere down the middle of the two coalition’s proposals.

In a statement, Upper Basin Commissioner and Colorado negotiator Becky Mitchell said it’s too early to speak directly about the five alternatives from the Bureau of Reclamation.

“Colorado continues to stand firmly behind the Upper Division States’ Alternative, which performs best according to Reclamation’s own modeling and directly meets the purpose and need of this federal action,” she said.

The Lower Basin states of Nevada, California and Arizona didn’t immediately release a statement when the announcement was released at 1 p.m.

All seven state negotiators will convene in Las Vegas in early December at the Colorado River Water Users Association conference, where experts and officials will discuss what’s to come from negotiations under President-elect Donald Trump.

This is a developing story. Check back for updates.

Contact Alan Halaly at ahalaly@reviewjournal.com. Follow @AlanHalaly on X.

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