Tax Expenditure Report pushed by CFI helps Colorado go from ‘D+’ to ‘B’ in transparency of spending
The Colorado Fiscal Institute’s relentless push to bring transparency to the state’s tax expenditures has helped move the state’s overall grade for transparency in spending from a “D+” to a “B” this year.
Colorado in 2013 had received a score of 60 for transparency in spending and ranked in 42nd among states, according to a study by the CoPIRG Foundation that ranked states by criteria such as whether you could search for spending online by agency name or keyword. One of the criteria, however, was whether the state tracked and made public tax expenditures, which include tax credits, deductions and exemptions.
In 2013, CoPIRG gave Colorado zero points for publicly disclosing tax expenditures in 2012. But in 2014, CoPIRG is now giving Colorado 9 points for tracking tax expenditures in 2013. What changed from one year to the next? The creation of the state’s first Tax Expenditure Report, something required under SB 184 in 2011, a bill CFI pushed.
The legislation was controversial at the time, with many lawmakers questioning the need for it. It only passed after an agreement that its modest fiscal note would be funded through a portion of revenues from a bill granting tax amnesty to certain delinquent taxpayers.
But the 2011 bill paid off, with the state for the first time publishing a tax expenditures report in January of 2013, too late for the CoPIRG report that examined disclosure in 2012. This year, lawmakers made funding for the tax expenditure report permanent. How controversial was the idea this time? Lawmakers loved it so much the measure, HB14-1018, passed unanimously out of the House, and it became a consent bill in the Senate. Gov. John Hickenlooper signed it into law earlier this year.
Because of the 2013 Tax Expenditure Report, CoPIRG in 2014 has moved Colorado’s transparency score from 60 to 86, giving it a “B” and moving it from 42nd to 16th among all states.
“The Colorado Fiscal Institute believes now, as it did in 2011, that transparency in the tax code is essential for effective decision-making,” said Carol Hedges, CFI executive director. “We’re glad to see that the Tax Expenditure Report has been recognized for providing needed information.”
