Tax Fairness Defenders: 2022 Legislative Wrap-Up
Advocating at the capitol for tax fairness and economic justice isn’t for the faint of heart. It takes toughness, dedication, and fearlessness to stand up to the rich and powerful special interests that descend on the gold dome every year. With that much to go up against, it’s easy to feel hopeless. But have no fear: the Colorado Fiscal Institute is here!
That’s right. Just when it seems like those who want to carve out even more special treatment for the wealthy and well-connected might get their way, who should appear but the staff of CFI. All session long, we swooped in to provide policymakers with the facts and numbers about why doubling down on unfair tax policy won’t help working Coloradans.
Those who would stop at nothing to keep our tax code unfair, to smash economic progress, and to make sure corporate CEOs get even fatter paychecks and bigger profits feel a cold chill run down their spine when they see us coming.
This year, through our research, strategic communications, outreach, and legislative expertise, we fought hard to convince lawmakers that when regular people of all races and backgrounds have more money in their pockets, that’s what makes our economy strong.
In fact, CFI was at the forefront of two of the most important bills for working families and our economy this year.
With SB22-233, if not for CFI, then it’s possible the checks of at least $400 for individuals and $800 for joint filers wouldn’t have happened at all. For months, it appeared lawmakers might be willing to do nothing and distribute a record $2 billion in required tax rebates under TABOR in a way that was inequitable and just plain unfair. Your favorite team of fiscal policy nerds did everything we could to get them to listen, and by the end of April, even when all hope seemed lost, lawmakers announced their plan, passing it on the penultimate day of the legislative session.
Thanks to CFI and our partners, less money is going to the already rich, and more money is headed to the pockets of hardworking Colorado families.
We were also front and center on SB22-234, a bill to stabilize and improve Colorado’s Unemployment Insurance system. When business groups were hoping to use $600 million of federal stimulus money to help replenish the state’s Unemployment Insurance Trust Fund, CFI made sure it also made permanent some of the improvements to the system that came about because of the pandemic.
While the dust has settled from the legislative session, there’s still trouble on the horizon. This November, ballot measures that will make our tax code more unfair threaten our public investments and the values of an economy for all. There are also going to be some very important measures that we’ll be supporting with our tax policy superpowers because they’ll inch us closer to a fair tax code.
We’ll never rest until Colorado finally has a fair tax code, and we’ll be spending the rest of 2022 finding ways to fight off threats and champion the heroic policies that uphold the values we fight for: truth, justice, fairness, equity, and widespread prosperity for all Coloradans no matter how we look, where we were born, or which part of the state we call home.
Check out our 2022 legislative wrap-up and see why we’re so excited to be use our policy superpowers to fight for a people-centered economy in Colorado.
BAM: CFI’s Priority Bills
SB22-234 – Unemployment System Stability and Solvency
Sponsors: Sens. Hansen & Rankin, Reps. Ortiz & Snyder
This bill puts the Unemployment Insurance program on a quicker path to solvency and makes policy changes that will ensure that Colorado workers, businesses and economy are better prepared for the next recession. The Unemployment Insurance program was a lifeline for 1.4 million Colorado workers and communities throughout the pandemic. Altogether, federal and state UI programs pumped $11.5 billion in direct aid to workers. That money flowed into every community in Colorado, ensuring a fast economic and jobs recovery.
SB234 allocates $600 million in federal funds to reduce the balance of Colorado’s federal loan, used to pay regular UI benefits during the pandemic when Colorado’s trust fund was drawn down in August of 2020.
Second, it makes permanent some of the policy changes made during the pandemic. It creates a permanent fund, the first of its kind of any state in the country, that will provide limited unemployment-like benefits to employees without work authorization who lose their jobs through no fault of their own and whose employers contribute to the UI system on their behalf. Other policy improvements include eliminating the one-week waiting period, permanently increasing the ability of workers to earn some part-time income without losing their full unemployment benefit, studying the benefit adequacy for single parents with dependent children, and ensuring a worker-centered process for those times when a worker is paid an incorrect benefit because of the employer or the agency’s mistake. These process changes not only make the system more fair for low-wage workers, but also allows workers and businesses greater flexibility during recessions.
SB22-233 – Fairer TABOR Rebates
Sponsors: Sens. Rodriguez & Hinrichsen, Reps. Exum & Daugherty
This bill will change the way the state determines required tax rebates under TABOR to be fairer, giving working families more money in their pockets to afford basic needs like gas and groceries. The bill creates a new one-time TABOR rebate mechanism — in addition to a property tax exemption for older and veteran homeowners, an income tax rate reduction, and a “six-tier” sales tax rebate. Of the more than $2 billion in expected rebates in 2022, $1.4 billion would be through this new mechanism, giving 3.1 million Colorado households checks of at least $400 for individuals $800 for join tax filers.
This new mechanism will be the most progressive rebate mechanism since TABOR passed in 1992. While this is a much fairer rebate mechanism than what would have taken place without this plan, and it will result in a bigger reduction in overall taxes for low-wage workers and people who earn moderate incomes — all taxpayers who are more likely to be people of color than upper-income earners — it could be improved. For instance, the rebate mechanism is temporary, and we will go back to the more regressive mechanism next year and in future rebate years. While we support this policy, lawmakers looking to make these rebates even fairer could cap it at a certain high income level, or simply give more to workers who earn low incomes than people who earn incomes that put them in the top 5% or above.
An amendment added late in the legislative process will allow for checks larger than $400 or $800 to be issued if June revenue estimates indicate there is higher-than-expected revenue in the coming weeks.
POW: Centering People in Tax Policies
HB22-1055 – Sales Tax Exemption for Essential Hygiene Products
Sponsors: Reps. Lontine & Herod, Sens. Jaquez Lewis & Winter
CFI was excited to support the Women’s Foundation and partners in the Don’t Tax Dignity coalition, dedicated to ending sales tax on essential health items. This bill ensures period products, infant diapers, and older adult incontinence products will not longer be subject to state sales tax. Much like prescription medication needed for a variety of health issues, sanitary napkins, tampons, and baby and adult diapers are all necessary health-related materials and expenses shouldered predominately by girls and women. Despite this obvious fact, it took this change in law for our tax code to recognize it. The bill is tax relief that will help Coloradans who buy these products, and it’s an important part of making our overall tax code fairer.
HB22-1025 – Repeal of Infrequently Used Tax Expenditures
Sponsors: Rep. Benavidez, Sen. Kolker
Continuing CFI’s work on transparency in the tax code, HB-1025 repealed certain tax expenditures that the Office of the State Auditor (OSA) deemed too infrequently claimed to be useful, or that were not fulfilling their intended purposes. This bill is a direct result of CFI’s work to pass a bill in 2016 that required OSA to evaluate all state tax expenditures.
HB22-1010 – Early Childhood Educator Income Tax Credit
Sponsors: Reps. Sirota & Van Beber, Sens. Buckner & Kirkmeyer
CFI worked with our education partners to create a means-tested income tax credit for early childhood educators. The bill also increased the amount of the credit for educators with certain certifications, encouraging workforce development in the early childhood education field. These workers are in an industry that was hit especially hard during the COVID-19 pandemic, and it will allow us to recognize their work through the tax code in a fair way.
OOF: Tax Bills We Opposed
HB22-1021 – Income Tax Rate Reduction
Sponsors: Rep. Ransom, Sen. Sonnenberg
CFI testified against a reduction in the income tax rate from 4.55% to 4.40% arguing that there are better, more-targeted ways to give tax relief than a broad-based rate cut. The income rate cut like that in HB-1021 gives the top 1 percent of tax filers the same amount as the bottom two-thirds of filers. Or look at it another way, a reduction in the income tax rate would mean only 8 dollars a year for a minimum wage worker and $1,360 for a millionaire. This bill is also what voters will see on their November 2022 ballot. CFI used this bill as an opportunity to get our message out about how unfair it will be for Coloradans.
HB22-1127 – Income Tax Deduction for Rent
Sponsors: Rep. Woog
On the grounds of needing a sound tax system and better-targeted affordable housing policies, CFI testified against an income tax deduction for rent. The bill would have cost Colorado $500 million a year, and was not means-tested. Additionally, when analyzing bills that are meant to lift up Coloradans with lower incomes, CFI looks for refundable credits, which better benefit taxpayers with little to no tax liability, than deductions.
HB22-1163 – State Income Tax Deduction for Medical Expenses
Sponsors: Rep. Soper, Sen. Smallwood
Similar to HB-1127, HB-1163 would not have been the most effective way to provide medical cost relief to Coloradans, and would have cost to the tune of $370 million per year to run. Again, CFI argued that a means-tested, refundable credit with a dedicated funding source — so as not to jeopardize other critical General Fund programs — would be the best way to provide relief for basic necessities like healthcare.
WHAM: Economic Equity is Health Equity
SB22-182 – Economic Mobility Program
Sponsors: Sens. Hansen & Coram, Reps. Daugherty & Young
As long-time advocates of targeted tax credits that support working families, CFI recognizes that these credits are only as powerful in supporting our families and economy if communities know about them. That’s why CFI was proud to support SB 182 this session, which codifies the Economic Mobility Program in statute and provides funding to support outreach efforts, ensuring that families are aware these credits exist and have access to credible, trusted, and free Volunteer Income Tax Assistance (VITA) sites.
HB22-1314 – Towing Carrier Nonconsensual Tows
Sponsors: Reps. Ricks & Hooton, Sens. Gonzales & Sonnenberg
Access to a reliable vehicle is crucial for the economic security of individuals and families. That’s why we engaged in supporting the COVID Eviction Defense Project and other partners in advocating for HB 1314 the “Towing Bill of Rights,” which will protect working class folks from the predatory towing industry in the state, which uses its power to fine and fee people into poverty.
HB22-1289 – Cover All Coloradans
Sponsors: Reps. Gonzales-Gutierrez & McCluskie, Sens. Moreno & Fields
As a longtime partner and member of the Coalition for Immigrant Health, CFI supported organizing and member-based partners Center for Health Progress (CHP) and CO Immigrant Rights Coalition (CIRC), who led the coalition in the passage of this bill, to expand health care coverage to pregnant people through 12 months postpartum and children through age 18 regardless of immigration status. Immigrant community members from several parts of the state have led the effort on this legislation, which is building on years of policy wins to create a Colorado where all immigrants, regardless of status, can live a healthy and thriving life.
ZOOM: Worker Justice and Power to the People
SB22-161 – Wage Theft Employee Misclassification Enforcement
Sponsors: Sens. Danielson & Jaquez Lewis, Reps. Duran & Froelich
The advocates of this bill used and quoted CFI’s wage theft figures that estimated that 440,000 low-wage workers in Colorado were at risk of losing nearly $730 million annually in wage theft. CFI testified in both chambers adding wage theft data to the record to show that it’s not only the construction industry that is at high risk of wage theft. We also added some statistics about how wage theft disproportionately impacts women and Latino workers.
HB22-1133 – Family and Medical Leave Insurance Fund
Sponsors: Reps. Gray & Caraveo, Sen. Winter
We continued our efforts to ensure all Colorado workers have access to paid time off when a family or medical need arises by advocating on HB 1133. In November 2020, Colorado voters across the state overwhelmingly supported the passage of Proposition 118, thereby creating the state-run Paid Family and Medical Leave Insurance (FAMLI) Program. HB 1133 is a financing bill that provides the necessary funds to the CO Department of Labor & Employment’s FAMLI division for the program’s startup costs.
THWACK: Environmental Justice
HB22-1244 – Public Protections for Toxic Air Contaminants
Sponsors: Reps. Kennedy & Gonzales-Gutierrez, Sen. Gonzales
Toxic air pollutants are emitted from facilities across the state and are known to pose a risk of cancer or serious health impacts such as difficulty breathing, nausea, birth defects or even death. Workers, communities of color, and communities where the majority of residents are low-wage workers have disproportionately faced cumulative impacts from living in and near pollution hot spots.
This bill establishes annual state-level and publicly-available reporting of toxic emissions from sources across the state, strengthens monitoring of air toxics, prioritizes monitoring in disproportionately impacted communities, requires the state to set protective health-based air quality targets for each “priority” toxic, and requires regulators to adopt air toxics control rules to reduce “priority” toxics of concern. CFI testified in support of this bill.
HB22-1358 – Clean Water in Schools and Child Care Centers
Sponsor: Rep. Sirota, Sens. Winter & Fields
72% of Colorado children under the age of 6 have detectable amounts of lead in their blood. Even though water is not the only source of lead exposure in Colorado, there are still an estimated 80,000-90,000 lead service lines connected to taps in Colorado homes, schools, child-care centers, and businesses. There is no safe level of lead for children. Lead exposure is disproportionately associated with adverse effects in vulnerable groups including immigrant children, low-income families, and young children of color.
This bill requires each public K-12 school, child care center, and family child care home to ensure that a filter is installed on every drinking water source and that each water filter complies with certain standards. The bill creates the school and child care clean drinking water fund and requires money from the fund only helps schools, child care centers, and family child care homes pay for the costs of complying with the bill’s new requirements. CFI testified in support of this bill.
THOOM: Referred Ballot Measures
SB22-222 – Amount of Tax Owed Table for Initiatives
Sponsors: Sens. Pettersen & Moreno, Reps. Kennedy & Weissman
This measure will create greater transparency for ballot initiatives that increase or decrease state income tax by requiring that a fiscal impact statement be added in the ballot title for voters to consider. The impact statement must be in the form of a table that shows by eight different income categories, the current average income tax owed in each category, the average income tax paid in each category if the measure passes, and the difference between average tax owed before and after the rate change.
The table must be included in the ballot language and on the petition so that voters can clearly understand how an income tax increase or decrease will affect them and their families when deciding whether or not to sign a petition or to approve or deny a measure. Because Colorado voters are the primary decision makers when it comes to tax policy (due to TABOR); they should have the full picture of the impact of their decisions and this bill help them make more informed decisions.
HB22-1414 – Healthy School Meals for All
Sponsors: Reps. Gonzales-Gutierrez & Michaelson Jenet, Sens. Pettersen & Fields
CFI worked with several leaders across the hunger, education, and health spaces to support the creation of HB-1414, a referred measure that, if passed, will provide free, healthy meals to every public school student in Colorado. This bill is fully funded by lowering the itemized and standard deduction caps on taxpayers making over $300,000. Feeding kids and making the tax code fairer; what more could we want?
SB22-238 – 2023 & 2024 Property Tax
Sponsors: Sens. Hansen & Rankin, Reps. Weissman & Neville
While this is not a referred measure, the debate at the capitol over property taxes was in response to a number of measures proposed by business groups and conservative special interest groups. With the issue dominating the last few days of the legislative session, this bill represents a deal cut by legislative leaders, the governor, and those special interests to head off disastrous property tax ballot measures.
The bill will reduce commercial and residential property taxes for two years and provide either a full or partial backfill to communities that will lose property tax revenue as a result. Progressive groups, including Together We Thrive – a broad coalition committed to a fair and equitable tax system to support thriving communities – issued a statement denouncing the use of backroom deals led by rich and powerful special interests and advocating instead for lawmakers to put working Colorado families first by passing targeted, progressive tax policies that actually solve the problems that working people and families face.
Although the session is over, there is much work to be done to fight against other unfair tax cuts we’ll see on our ballots in a few short months. Stay connected to CFI to stay up to date and learn how you can fight for a fair, people-centered tax code.
