Capitol Gains: Will we finally measure tax credits?
By Ali Mickelson
Director of Legislative and Tax Policy
Just past the halfway point in the 2015 legislative session, the Colorado Fiscal Institute is pulling some surprising wins out of a divided legislature.
CFI’s biggest success has come in the House, where one of our priority bills, House Bill 15-1205, was passed unanimously and without opposition in House Finance, Appropriations and on the House floor. The bill creates a first-ever process to evaluate tax expenditures — deductions, credits, exemptions and incentives.
Under the bill, the state auditor would evaluate all 186 of our tax expenditures to determine if they are achieving their purpose in the most effective way possible. The bill has received bipartisan support, with Rep. K.C. Becker and Rep. Lori Saine sponsoring it in the House and Sen. Mike Johnston and Sen. Owen Hill sponsoring it in the Senate. In addition to CFI, the legislation is also supported by the National Federation of Independent Businesses and the Denver Chamber of Commerce. No one has testified in opposition to it.
The bill will next be heard in the Senate. We’re optimistic this bill will go all the way to the governor’s desk and become law.
Another CFI-supported bill failed in committee but arguably won the battle for public opinion and lived to fight another day. The Senate Finance Committee defeated Senate Bill 15-118, sponsored by Sen. Michael Merrifield, on a 3-2 party line vote. The bill would have restructured Colorado’s 529 college savings plan to increase the tax deduction for the middle class.
After nearly an hour of great discussion hinging on savings from a cap for Coloradans in the top 1 percent of income being used to boost the benefit for middle-class Coloradans, the bill died. But in the aftermath, The Denver Post did a story on how the bill worked and how it died, prompting a significant amount of attention to a piece of legislation aimed straight at the middle class. Even better, the spotlight on the bill was so strong, it is being reintroduced in the House by Rep. Brittany Pettersen in April. Please let us know if you would like to be involved with this bill as it moves in the House.
As usual, CFI has also been playing its fair share of defense against a few of the 20-plus tax credit bills that have been introduced this legislative session, including two especially egregious proposals. The first is a bill to give tax breaks to “data centers,” which most folks might call server farms — warehouses full of computer servers. These facilities create very few jobs, and companies have been locating them in Colorado for years without getting tax breaks.
The other is a bill to monetize an enterprise zone tax credit for renewable energy. Both these bills are reincarnations of equally as bad bills that died last year. Currently, both bills are waiting to be heard in House Appropriations.
