Highlights

• While different approaches exist for how best to articulate the economic impact of the oil and gas industry, Colorado Fiscal Institute’s analysis of federal economic data finds total jobs attributable directly to oil and gas development averaged just over 29,300, or less than 1 percent of total covered employment in Colorado, from 2006-2016.
  
  
• State data show economic activity created directly by oil and gas development averaged a modest 2.5 percent of total state GDP from 2014-2017.
  
• Other issues outside of the scope of changing oil and gas regulations should be considered, including how development of new technologies and other efficiencies, as well as the global energy economy and commodity prices, will affect the industry; and the economic impact of health outcomes associated with air pollution.

Introduction

Colorado’s environment, health, energy, and economy always live in a delicate balance with one another. This balance has been shaken in recent years, as a record-high number of oil and gas wells mean Coloradans are seeing drilling operations closer to residential neighborhoods than ever before. This tension became front page news after a deadly home explosion in 2017 in the town of Firestone was determined to have been caused by an improperly capped natural gas well.

Though the Firestone explosion was an extreme example, accidents involving oil and gas operations are not an unusual occurrence according to state data compiled by The Denver Post in 2018. For instance, while the annual number of oil spills is down from a peak of 792 in 2014, there were still 590 such incidents in 2018 – about 11 per week. In total, the Colorado Oil and Gas Conservation Commission (COGCC) has issued nearly $20 million in fines for regulatory violations since 2014 according to their annual reporting.

With residents and environmental advocates calling for solutions, state legislative leaders introduced a bill (Senate Bill 19-181) in 2019 that would, among other provisions, allow local governments to determine whether or not to allow oil and gas industry activity in their towns, cities, and counties. Groups representing the oil and gas industry have been vocal in their opposition to the proposal, which they say could have the effect of severely limiting drilling, or even ending the industry altogether. Such consequences, they argue, would have a devastating effect on Colorado’s economy.

As is the case with regulation of any industry, there are always trade-offs between the freedom of those industries to operate without limitation, and the freedom of the people to determine what legal safeguards are necessary for their safety and health. Colorado also has a long history of local control over various economic sectors, both public and private, including local school districts controlling curriculum and local governments deciding whether to allow certain businesses to operate within their boundaries.

Lawmakers must always strive to strike the right balance between these freedoms, while being mindful of the potential economic consequences if they fall out of balance. Therefore, it is imperative they have all the facts about the role any industry plays in the overall economy.

Oil and gas and Colorado’s economy

Though analyzing the economic impact of the oil and gas industry may seem like a straightforward task on its face, articulating it is complicated. Industry trade groups say the total impact of the oil and gas industry in Colorado’s economy as a share of GDP is as high as $13.5 billion. However, data from state and federal sources show the total economic impact of the industry to be significantly lower. The discrepancy between these figures can, at least in part, be attributed to differences in how much economic activity is directly created by oil and gas development, and how much comes from other services indirectly related to it. The Colorado Fiscal Institute limits our analysis to the former.

According to the nonpartisan Legislative Council, the total economic impact of oil and gas extraction varied during a three-year period between 2014-2016 from a high of $11.3 billion (3.7 percent of GDP) in 2014 to a low of just under $6 billion (1.8 percent of GDP) in 2016. That averages out to just under 2.5 percent of the state’s total GDP during the same three-year period.

Similar differences in data exist when the focus turns to the number of jobs sustained by oil and gas development, with industry groups reporting a number anywhere from 185,000-200,000 jobs in Colorado.

CFI’s examination of Bureau of Economic Analysis statistics for direct oil and gas employment shows the number of jobs is modest, averaging just over 29,000 in the decade between 2006 and 2016, though the overall economic strength of the state has buoyed the most recent number of jobs to over 40,000 in 2016.

What could be interpreted as a disagreement between these data should instead be seen as a range. On the low end, the industry employs an average of less than one percent of the workforce, with the high end around 5 percent of total employment. Similarly, the industry accounts for anywhere from 2.5 percent of GDP on the low end to what has historically been as high as 4 percent on the high end.

Ultimately, while Senate Bill 19-181 would present significant regulatory changes for oil and gas developers, it would not ban drilling or any drilling techniques, including hydraulic fracturing (also known as fracking). Additionally, the likelihood of a local government like Weld County – where around 80 percent of current oil and gas extraction activities take place – banning development is low. These factors must be taken into account when estimating the potential loss in economic output or jobs from changes to oil and gas regulations.

Impact on the state budget

Another argument raised by critics of SB19-181 is the potential for a reduction in state and local tax revenue generated from oil and gas activity. Industry-backed analysis released this month shows the state could stand to lose up to $1.3 billion a year in revenue over the next 10 years if all oil and gas operations in the state were to cease. Legislative Council’s research, on the other hand, paints a slightly less dire picture; with just under $570 million in annual tax receipts in Fiscal Year 2016-17, the lion’s share going to local property taxes. CFI’s analysis shows the oil and gas industry contributes just one-quarter of one percent of Colorado’s sales and use tax and only 6.6 percent of the state’s corporate income tax.

If the economy is able to absorb most of the potential lost jobs and share of the GDP, the implications for state and local tax revenue may end up being minimal.

Non-regulatory factors

Regulations are not the only reason why the economic impact of the industry might change, or the number of jobs supported by the industry might rise or fall. For instance, federal data show that while new-well oil production per rig in the Niobara region (which includes most of Northeastern Colorado) has risen, the actual number of oil and natural gas wells has fallen. The reason for the increase in production while the number of new drilling rigs has declined is advancements in technology, including horizontal drilling and hydraulic fracturing. Technological advances like these mean production can increase substantially while the number of jobs created by the industry may be much smaller.

Another factor to consider is the natural boom and bust cycle of the industry. This cycle is tied to the global economy, which even the staunchest critic of oil and gas regulation would admit effects the industry regardless of the regulatory system of any particular state government.

Finally, one impact of oil and gas development isn’t calculated by most economic analyses. The environmental impact of the industry, whether through the long-term consequences of global climate change, or through increased health problems from air pollutants caused by oil and natural gas drilling, is not reflected in calculations of jobs and GDP. Poor air quality, in part due to oil and gas development, contributes to increased incidents of asthma, more hospital visits, and lower productivity due to missed days of school and work. (For more information about how reduction in fossil fuel consumption for electric generation can improve health outcomes, see CFI’s analysis of the Colorado Energy Plan.)

Conclusion

Colorado’s oil and gas industry is like any business interest or government entity. When state government considers the best way to balance the interests of a particular industry with the health and well-being of citizens, a delicate balance must be struck. That balance must take into account the risks associated with a lack of action, and the economic or other consequences of any potential tightening of rules and regulations.

Estimates of the economic impact of the industry vary widely. How close Colorado is to one end of the range or the other depends on who is analyzing the numbers and how they are analyzing them. Either way, Colorado’s diverse economy is strong and could very well absorb whatever losses occur due to policy changes.

Ultimately, nothing in Senate Bill 19-181, or any change in existing law, will change the role of the global economy and the broader oil and gas economy. Business cycles, including booms and busts, will continue with or without passage of the bill.

Lawmakers should take this into consideration, along with the potential risks of doing nothing at all, when they consider their votes on Senate Bill 19-181.

Abbey Pizel contributed to this report.

1. The General Fund budget outlook for 2019-20 is very similar to December estimates

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Although the FY2019-20 budget will have less revenue than analysts thought when they made their December forecast – projections for General Fund revenue were reduced by $250 million because of slower economic activity – legislators will still have $1.22 billion more to budget or save this year compared to last year’s forecast. The reduction in revenue collections were offset by a reduction in the General Fund obligation to pay for TABOR rebates. 

2. There will be a large reduction in TABOR rebates this year and no rebates next year

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Legislative Council staff, which estimated in December that Colorado would return $380 million in TABOR rebates for FY2018-19, now believes there will only be $65 million in rebates for the current budget year. For FY2019-20 and 2020-21, analysts no longer forecast any TABOR rebates at all.

3. Slowing home price appreciation won’t hurt property tax collections as much as you might think

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The Gallagher Amendment limits residential property tax collections (i.e. taxes for houses and condos) to roughly 45 percent of total property tax collections. That means when property values increase at a steady clip, as has been the case the last few years, Gallagher has the effect of actually reducing the rate used to determine the amount of a home’s property subject to tax. While the residential assessment rate is still projected to fall next year from 7.2% to 6.78%, it’s less than might have been the case if home prices continued to rise at the same historic rate. While this news isn’t as bad as it could have been, for fire districts and other local governments that rely on property tax revenue from homes, budget cuts forced by Gallagher will continue. That’s especially true for districts in areas where home price appreciation continues to lag the gains seen along the Front Range.

4. Internet sales tax is projected to be between $47-$72 million next year

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Because of the US Supreme Court decision in Wayfair v. South Dakota,Colorado will see new sales tax revenue collected for online transactions. Legislators are already discussing what to do with the money, though it only reflects a small increase in the $15 billion General Fund. It’s important to remember this figure only reflects what the state expects to collect; sales tax collections are also expected to increase for local governments like towns, cities, and counties.   

5. An increase in school property taxes frees up $100 million in the General Fund for other priorities

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Local school property tax growth this year has generated enough money to cover the $100 million lawmakers budgeted last year for inflation and the annual increase in the number of students in the K-12 system. While there will be significant pressure to keep that money in the K-12 system, the Joint Budget Committee and their legislative colleagues will have the authority to use the freed up $100 million for priorities outside K-12 (e.g. investments in transportation or higher education) if they choose.

The first and only Constitutional Convention, convened in 1787, created the framework for the United States Constitution and the government we know today. To ensure a balance of power, the framers included Article V of the Constitution, which outlines mechanisms for future constitutional amendments.

Article V contains two ways to amend the United States Constitution:

1. Congress can propose amendments
2. States can call for a Constitutional Convention (Article V Convention)

Two Paths Forward 

Under Article V, Congress has the authority to propose Constitutional amendments. Any amendment proposed must pass through each chamber of Congress by a two-thirds majority and then be ratified by three-fourths (or 38) of the 50 states. Alternatively, Article V allows the states to call a Constitutional Convention if two-thirds (or 34) of 50 states submit a resolution proposing an amendment on one or many topics (or just a general call for convention without proposing a specific topic). Amendments proposed during a Constitutional Convention must also be ratified by three-fourths of the states. Since the first Constitutional Convention, Congress has proposed 33 constitutional amendments and 27 have been ratified.

There has never been a Constitutional Convention called by the states. However, many states have made efforts to call a convention. Estimates show state legislatures have passed hundreds of resolutions calling for an Article V Constitutional Convention in the last 200 years. Today, 42 states have at least one Article V resolution pending.

Article V Efforts

Nationally, several efforts are underway to call a Constitutional Convention. Interest in a convention spans the political spectrum with support and opposition coming from both Democrats and Republicans. Some focus on a single topic, while others have multiple amendments based on broader topics. Of all the applications, a federal balanced budget amendment has gained the most traction, making it the most likely candidate to convene an Article V Constitutional Convention. 

The Balanced Budget Amendment Task Force (BBATF), one of the primary groups working towards a balanced budget amendment, began in 1957 when Indiana passed the first Article V resolution on this topic. Today, 28 states – including Colorado – have passed resolutions calling for a convention to discuss a balanced budget amendment. That means if six more states call for a balanced budget amendment, a constitutional convention could be convened. Idaho, Kentucky, Minnesota, Montana, South Carolina, Virginia, and Washington have all been targeted by BBATF.  

Another effort led by the Convention of States (COS) is working on a convening based on three topics: limiting the federal government’s powers, restraining fiscal spending, and establishing term limits for members of Congress and other federal elected officials. According to The Economist, COS passed its first resolution in 2014 and has since passed resolutions in 12 states. While COS has passed fewer resolutions than the Balanced Budget Amendment Task Force, the group is deemed to be better funded than BBATF and boasts 3 million volunteers nationally.

A third effort is from a group known as Wolf PAC, whose interest in a Constitutional Convention is centered around campaign finance. Wolf PAC’s resolution, Free & Fair Elections, would attempt to overturn the U.S. Supreme Court’s decision in Citizens United v. FEC. To date, Wolf PAC’s resolution has passed in five states.

Most leading campaign finance reform organizations oppose the use of an Article V convention to overturn Citizens United. They warn the lack of rules to govern the process mean every Americans’ constitutional rights may be subject to change in an Article V convention. Notable campaign finance and democracy reform organizations that oppose the use of an Article V convention to deal with campaign finance include: the Brennan Center for Justice, the Campaign Legal Center, the Center for Popular Democracy, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, Democracy for America, Every Voice, the Fair Elections Legal Network, the League of Women Voters, the NAACP, People For the American Way, and the Voting Rights Institute.

Colorado

In Colorado, the first Article V Constitutional Convention resolution was submitted near the turn of the 20^th century. Since then, Colorado has submitted two resolutions, one of which was a balanced budget amendment. Most recently, the Wolf PAC’s resolution was introduced in Colorado during the 2018 legislative session but did not pass out of committee.

Cause for Concern

1. Lack of Concrete Rules – A lack of concrete rules could lead to a ‘runaway’ convention where, once convened, any amendment could be proposed. This would put many of our most fundamental and cherished Constitutional and human rights at risk – everything from unreasonable search and seizure to the right to keep and bear arms. Additionally, because there was not a formal count of the states calling for a convention until only recently, there exists some “fuzzy math” on how close we are to meeting the two-thirds threshold. This concern, based largely on an aggregation of non-issue-specific calls for a constitutional convention, including some that go back to the nineteenth century, has been raised by several Colorado-based groups.
2. Unequal Representation – The Constitution does not contain guidelines for how each state would be represented. For example, state representation could be one delegate per state, based on population, or a combination of the two.
3. Influence of Special Interests – Groups with the most funding, the best connections, or the most resources could impact the outcome of the convention for their own interests, rather than the best interest of the people.
4. Uncertain Ratification Guidelines – Opinions differ on the criteria for approving amendments.

Where are we going?

In addition to potentially dangerous questions and concerns regarding fundamental values like human rights, there is also substantial uncertainty as to how an Article V Constitutional Convention could be convened fairly. Without concrete rules, a convention could put at risk many of the Constitutional rights held dear by those living in the United States. The number of balanced budget amendments inching towards two-thirds majority, along with novel attempts to call a convention using unrelated applications, increases the urgency for ensuring states and people know about the uncertainty and the potential harm an unrestricted convention could cause.

There are ways to address money in politics, government accountability and other important issues without opening up the Constitution to other major changes.States can protect constitutional rights by rescinding their applications for an Article V convention. Given how close we are to wealthy special interests calling a convention, rescinding a state’s convention application is more important now than ever.

By rescinding previous Article V convention applications, some of which were passed decades ago, legislators are making a commonsense update to where the state stands. That’s why so many rescission resolutions in states across the country have passed with bipartisan support.

Legal and constitutional scholars from both sides of the political spectrum agree that legislatures have the power to rescind their previous applications for an Article V convention, which means they will no longer be counted towards any calls for a convention.

The Child Tax Credit (CTC) is the largest federal tax code provision benefiting working families with children. It is a proven, targeted way to reduce childhood poverty and put money back into the pockets of Colorado families. The Colorado Legislature is considering a bill that would fully fund a state-level Child Tax Credit, HB 19-1164. A state Child Tax Credit will put millions back into local economies and provide better outcomes for children in low- and moderate-income families. It is an investment in our families and children that encourages and rewards work and provides better educational and economic outcomes over a lifetime.

Watch this video and learn why the Child Tax Credit is so important to Colorado Families.

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By Chris Stiffler

Introduction

Many older Coloradans and veterans with disabilities have come to rely on the tax savings they receive from the state’s senior homestead property exemption. Although the original intent of the law was to allow more people to remain in their homes, analysis of the available data by the Colorado Fiscal Institute found the exemption does not help as many people as it could. That analysis showed:

• About half of older Coloradans don’t qualify for the exemption, either because they rent or because they haven’t lived in their homes for more than 10 years.
• The exemption disproportionately benefits white homeowners over homeowners of other races.
• Those who qualify for the exemption are slightly less likely to be experiencing poverty than all older Coloradans.

Background

Amid fears of property taxes growing faster than older Coloradans’ incomes, Colorado voters approved Referendum A in the year 2000. In doing so, they amended the state constitution to give older Coloradans a property tax break. The policy, which eventually became known as the senior homestead property tax exemption, first became available in 2002. A few years later, voters approved Referendum E, which extended the favorable tax treatment to veterans with disabilities. The goal, according to the proponents, was to allow more people to remain in their homes.

The exemption applies to older Coloradans and veterans with disabilities who have lived in their homes for at least 10 years. The law exempts 50 percent of the first $200,000 of the house’s value. For homes worth more than $200,000 in market value, the state reduces the value by $100,000 before calculating how much property tax is owed. For homes worth less than $200,000, only half of its market value is used to calculate property taxes. The exemption is not available for older Coloradans and veterans with disabilities who rent, or for who those who have owned their homes for less than 10 years. The 10-year rule also neglects to include people who may have lived in their home for more than 10 years but choose to move into a smaller home and have not yet lived there for the necessary 10-year period.

The exemption saved the average homeowner $575 and benefitted 245,802 older Coloradan households, along with 5,858 veterans with disabilities, in 2017. That adds up to a little more than 13 percent of all housing properties in Colorado. However, as with any tax expenditure, there is a tradeoff in revenue.

The revenue lost from the Senior Homestead Exemption doesn’t affect funding for local services because Colorado’s constitution requires the state to reimburse local governments for the revenue they lose by exempting these homesteads from property taxes. However, services and institutions funded primarily by state tax dollars – such as transportation, K-12 education, and higher education – are impacted.

When the state budget faces tightening due to economic downturns, lawmakers have the power to adjust the percentage of the value of each home that is exempt and can even reduce the exemption to zero (for all but veteran households) as they did in six of the nine years from 2003-2011.

Who receives the benefit of the homestead exemption?

Of the 484,613 households in Colorado with at least one older homeowner, just over half qualify for the current homestead exemption. 30 percent of households with at least one older Coloradan don’t own their homes, meaning they are unable to qualify. Another 19 percent are older homeowners who haven’t lived in their current residence for the 10 years needed to qualify for the current homestead exemption property tax break.

Additionally, the homestead exemption is more likely to benefit older whites than older Coloradans of other races: 60 percent of older white households qualify for the exemption, but only 40 percent of older black households and just 21 percent of older Latinx households qualify. Taken as a whole, even though people of color make up more than 25 percent of the total population above age 65, they make up just 13.6 percent of total homestead exemption qualifiers.

Older Latinx Coloradans are much less likely to own homes than older Coloradans who are white. A full 72 percent of older Latinx households don’t own homes compared to only 18 percent of older white households.  

Similar to the racial disparities described above, older Coloradans who qualify for the homestead tax exemption are less likely to be experiencing poverty than the total population over age 65. 32 percent of older households are above 500 percent of the federal poverty line and 35 percent of those eligible for the exemption are above 500 percent of FPL. 

Homestead exemption and TABOR rebate mechanisms

The Taxpayer Bill of Rights (TABOR) places a cap on how much revenue the state can collect in taxes and fees each year. If the state collects more than the revenue cap allows, it returns money to taxpayers in the form of rebates. Article X, Section 20 (1) of the Colorado Constitution allows excess revenue to be refunded using “any reasonable method.” Since 1992, legislators have created 21 mechanisms to refund revenue above the limit. Of those, eighteen have been repealed and three remain. One of the three remaining is the property tax exemption reimbursement mechanism.

Since FY2017-18, the first TABOR rebate mechanism is the senior homestead exemption, meaning the state reimburses local governments from the General Fund for the property tax lost from the exemption. The TABOR rebate money can cover a portion of the homestead exemption – it doesn’t have to fully fund the entire rebate mechanism like the temporary reduction in the income tax rate which only triggers on if the TABOR surplus is a certain amount. Having the first TABOR rebate mechanism as the homestead exemption affords more General Fund flexibility during TABOR rebate situations.

Note on word choice in this report

People who identify with a Latin American or Hispanic ethnicity may prefer to be identified in various ways including as Hispanic, Latino, Latina, Latinx, or with a more specific country of origin. In this report we use the gender-neutral term “Latinx” wherever possible. We also use “Hispanic” where appropriate, for instance in cases when a data source uses that term.

Methodology and data sources

Administrative data on homestead exemption recipients were provided by the property tax division of the Colorado Department of Local Affairs. These data have detailed information about the exemption value of each property that utilizes the homestead exemption but doesn’t provide demographic data on the recipients like age, race, income and years in current residence.

This is where U.S. Census data comes into play. Because census data has variables on income, property value, property taxes, age, and years living in current residence, we were able to slice the 2017 PUMS microdata into the survey respondents who qualified for Colorado’s current senior homestead exemption (i.e. those aged 65 years or older who have owned their home for at least 10 years). These are not necessarily the exact individuals who utilized the program, just those who are eligible.

The property tax variable was a categorical variable that was converted into a continuous variable by assuming the midpoint (e.g. if 3=property tax between $100 and $200, this was converted to $150).  Both the “housing” and “population” microdata were utilized because the property value and property tax variables are in the housing dataset while age is in the population dataset. We cat walked the “age” variable from the population microdata set using the serial number coded “serialno,” keeping only household records where “relp==0.”  Of these records, we calculated which individuals qualify for the current homestead exemption using the ACS variable “MV” which is “when moved into current residence.” This allowed us to see which households have been there for at least 10 years. Administrative records show 227,611 older Coloradans claimed the senior homestead exemption in 2017, while the 2017 Census data shows 249,537 are eligible (when multiplying the census weight variable times respondents). We determined the demographic data from the census data on those 249,537, which was 3,138 unique census records.

By: Esther Turcios and Abbey Pizel

A complete and accurate 2020 census count matters

The US Constitution requires the federal government to conduct a census every ten years in order to generate an accurate count of all persons living in the United States, Puerto Rico, and all other US territories. A precise count is vital to guaranteeing each state receives the appropriate number of seats in the House of Representatives, it influences how states draw their legislative districts, and, equally as important, it ensures communities across the country receive proper funding for a host of important services families and local economies rely on. Unfortunately, the upcoming 2020 census is in jeopardy as inadequate funding and an unprecedented and untested citizenship question threaten participation, and an accurate count of all people – particularly residents in hard-to-count communities.

With as much as $600 billion in federal funding at stake, several states have appropriated funds and created Complete Count Committees (CCC) to ensure an accurate count in 2020. Trusted CCCs are volunteer groups created by state and local governments, community groups, and/or organizations focused on increasing awareness of and participation in the census through “trusted community messengers.” With an already difficult task of counting millions – especially hard-to-count communities including immigrants, people of color, Coloradans who earn low incomes, Native Americans, Coloradans living in rural communities, people who speak and understand limited amounts of English, and many others – the state of Colorado should invest in these trusted community groups so they can expand their outreach efforts to ensure all Coloradans are counted in 2020.

In order to ensure they can accomplish this goal, the Colorado Fiscal Institute (CFI) recommends state lawmakers invest $12 million in this year’s budget for 2020 census outreach efforts aimed at the hard-to-count population.

State funding can ensure a complete count    

A $12 million-dollar investment would allow the state to allocate resources to each of the 64 counties based on each county’s hard-to-count population (refer to Figure 2). Using Census Bureau data to determine the total hard-to-count population in the state, CFI was able to estimate the costs of doing basic, moderate, and intensive outreach for the 2020 census. Figure 1 below details the level of outreach that can be made to the approximately 1.5 million hard-to-count Coloradans at an average cost of $2 per person. The state could also reach about 147,000 Coloradans with moderate-level outreach at $25 per person, and about 73,000 Coloradans at $75 per person. Outreach needs will differ across the state depending on geographic location and the makeup of each community. To aid policymakers as they allocate resources, CFI’s analysis includes a breakdown of the dollars that can be allotted to community groups for 2020 census outreach in each county based on the share of hard-to-count residents:

In Denver County, community groups would receive $1.5 million to reach 176,155 residents. About $350,000 would go to basic outreach to the entire hard-to-count population, $440,000 would be used to follow up with moderate outreach to 17,616 people, and $661,000 would go to intensive outreach to 8,808 people.

In Adams County, community groups would receive $1 million to reach 125,792 residents. One quarter would go to basic outreach to the entire hard-to-count population, $314,000 would be used to follow up with moderate outreach to 12,579 people, and $472,000 would go to intensive outreach to 6,290 people.

In Weld County, community groups would receive $628,000 to reach 76,158 residents. Roughly $152,000 would go to basic outreach to the entire hard-to-count population, $190,00 would be used to follow up with moderate outreach to 7,616 people, and $286,000 would go to intensive outreach to 3,808 people.

In Montrose County, community groups would receive $103,000 to reach 12,535 residents. $25,000 would go to basic outreach to the entire hard-to-count population, $31,000 would be used to follow up with moderate outreach to 1,254 people, and $47,000 would go to intensive outreach to 627 people.

A complete count will help our communities thrive

For almost 230 years, the census has played a critical role in counting all people in the country, citizens and non-citizens alike, ensuring residents in each state are properly represented in Congress. However, less is known about the incredible importance of accurate census data in securing funding for everything from transportation and health care, to tools for reducing the amount of people experiencing poverty. A study by the US Department of Commerce found 132 programs used census data to distribute over $675 billion dollars to states in fiscal year 2015.[ The following sixteen programs are some of the largest and more commonly known programs that help Coloradans and residents across the country make ends meet:

From services that help struggling families put food on the table or see a doctor, like SNAP (formerly food stamps) and Medicaid, to lesser known but equally important programs like the Hazardous Waste Management State Program; Rural Business Enterprise Grants; and the Water Pollution Control, State, Interstate, and Tribal Program, the census funds a variety of public investments that help build the kind of communities Coloradans of all races and backgrounds want to call home. In fiscal year 2015, Colorado received more than $8 billion in census-based federal funds for these and many other important public services.

$12 million will provide a big return on investment due to the major and long-lasting effect census-based services have on the individuals and families who rely on them, and the stabilizing effect those same services have on the state’s economy—particularly during recessions and economic downturns. If the state does not invest in outreach efforts, hard-to-count communities will be underrepresented, hundreds of thousands of Coloradans may have a tougher time making ends meet, and local economies will suffer.

Of additional interest to those who want to ensure an accurate and complete count: because Colorado has joined 15 other states by taking action to count all citizens – especially hard-to-count communities – there are opportunities to pitch in. Colorado’s Complete Count Campaign is currently seeking volunteers to support the 2020 census.

Methodology

Colorado’s hard-to-count population was calculated by determining the percent of people in each county who did not participate in the 2010 Census. That percent was multiplied by the total population of each county to estimate the number of hard-to-count Coloradans in 2017. These estimates were used as a baseline to project how much Colorado needs to invest in outreach in order to have a full and accurate count of all Coloradans in the 2020 Census.

To estimate the average per-person outreach cost for hard-to-count communities in Colorado, we use a study completed by the New York Fiscal Policy Institute (FPI) as a proxy.5 In the study, FPI utilized a survey of community groups expecting to do outreach for the 2020 Census to estimate the per-person outreach costs for hard-to-count communities. The survey returned 32 responses. The responses were divided into three groups based on the level of outreach and the cost per person:  

• Basic Outreach: $2 per hard-to-count person
• Moderate Outreach: $25 per hard-to-count person
• Intensive Outreach: $75 per hard-to-count person

Of the 32 responses, twelve groups said they would use basic outreach meaning some level of broad outreach like public forums or providing information to individuals who come into an office. At the basic level, these groups proposed spending $10,000 and to reach 10,000 people, another said $15,000 and 8,500 people, and one said $78,000 and 12,000 people. This results in an average cost of $2 per hard-to-count person for basic outreach. 

Eleven groups said they would use moderate outreach that includes both broad outreach like public forums as well as specific outreach like in-person discussions. At this level of outreach, groups estimated spending $120,000 to reach 10,000 people, $500,000 to reach 20,000 people, or $20,000 to reach 500 people. This results in an average cost of $25 per hard-to-count person for moderate outreach.  

Nine groups would employ intensive outreach. This type of outreach is focused on communities that have the largest barriers to being counted. Outreach at this level can include in-depth discussions to explain the process, assistance for people who do not have access to the internet or who are not familiar with computerized forms, in-language discussions for families with limited English, and outreach to people and communities experiencing homelessness. With this type of intensive outreach, groups estimated spending $75,000 to reach 1,500 people, $250,000 to reach 5,000 people, and $100,000 to reach 1,000 people. This results in an average cost of $75 per hard-to-count person for intensive outreach. Because of cost variations and limited resources, community groups are not expected to employ each level of outreach to all of the hard-to-count populations. For example, intensive outreach is a substantially larger task for community groups and resources for this type of outreach would need to be specific and targeted. Following the structure outlined in FPI’s study, estimates assume that all of Colorado’s hard-to-count population, or 1.5 million people, will receive at least a basic level of outreach. Ten percent, or 147,000 people, will receive moderate outreach. Five percent, or 73,000 people, will receive intensive outreach.

The Colorado Fiscal Institute used these estimates to calculate the total amount Colorado should invest for 2020 Census outreach to hard-to-count communities.

Proposed State Funding for Census 2020 Outreach by County

Figure 2: Outreach cost estimates derived from New York Fiscal Policy Institute census study.

For printable verison, click here.

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Impact of an income tax rate reduction from 4.63 percent to 4.49 percent

The wealthiest see the greatest reduction

Reducing the Colorado income tax rate from 4.63 percent to 4.49 percent, the amount proposed in recently introduced legislation at the state capitol (SB19-055), will mean $280 million less for essential public investments. That’s because the income tax is the largest revenue source for the General Fund – the part of the state budget responsible for funding schools, Medicaid, colleges, courts, prisons, and human services. This retreat of state support would affect the budgets of all Colorado families, making it more difficult for them to make ends meet. And while proponents of tax cuts claim they provide “relief” to Coloradans, the top 1 percent would see the amount they pay in taxes fall by a greater amount than the dollar amount of the reduction for the bottom 70 percent of taxpayers.

Put another way, because an across-the-board income tax rate reduction reflects the current concentration of the incomes of Colorado taxpayers, those earning $1 million will see their tax bills fall by around $1,250 while the tax obligation for a worker earning the minimum wage will be reduced by just $6.

Reduces taxes paid by corporations

Despite Colorado ranking third-lowest among states with a corporate income tax, SB19-055 would shrink taxes paid by corporations by $24 million. The reduction would also come at a time when corporations’ tax bills were slashed by recent changes to the federal tax code. Research recently published by Harvard Business School found reducing corporate taxes actually ends up exacerbating income inequality and doesn’t help workers who earn less than $200,000 per year.

25% of Coloradans won’t pay less in taxes

In addition to the income inequality issues mentioned above, because a portion of Colorado taxpayers have higher deductions than taxable income (and thus zero income tax liability), an income tax rate reduction has no effect on fully 25 percent of Colorado taxpayers. The income tax rate doesn’t matter to a taxpayer with zero income tax liability because the rate is applied to zero dollars; meaning they owe no income tax. Of those 672,000 taxpayers with no income tax liability, more than half have incomes below $25,000, and 80 percent of them make less than $46,000.

Cutting the income tax rate increases the upside-down nature of Colorado’s tax code

The wealthy pay a smaller percentage of their income in taxes

In addition to income taxes, Colorado taxpayers also pay sales and property taxes. The sales tax is the most regressive part of Colorado’s tax code. A household making $32,000 a year pays 5 percent of their income in sales tax, whereas a millionaire pays sales taxes totaling less than 1 percent of their income. Coloradans earning low incomes also pay a high rate of their income in property taxes compared to wealthier households. Overall, people in households earning $32,000 pay 9 percent of their annual income in state and local taxes. Compare that to households earning $400,000 a year, who pay around 6 ½ percent of their incomes in state and local taxes.

Reduces funding for important priorities

The tax rate reduction proposed in SB19-055 also jeopardizes resources to fund current priorities such as full-day kindergarten. The price of that important enhancement is approximately $227 million. If a reduction in the income tax rate was to pass, the resources for paying for tuition-free kindergarten would be wiped out of future budgets. This would needlessly pit budget priorities – like paying for the salaries of kindergarten teachers or paying for other public school teachers – against one another.

The health and well-being afforded to us by living in Colorado, along with our ability to enjoy the outdoors – key parts of the Colorado way of life – are at risk. At least that should be the takeaway from the Fourth National Climate Assessment released last month by the U.S. Global Change Research Program, a coordinated federal effort created to analyze how the environment affects people living in the United States. If we fail to act, researchers found everything from Colorado’s water, ecosystems, health, and economy will all face drastic, negative consequences in the not-too-distant future. Now is the time for us to act. If the Colorado we know today is truly worth protecting now and for future generations, what can we do to change the future?

While Colorado voters acted more than a decade ago to address the importance of becoming less reliant on fossil fuels, the private sector has lagged in setting plans for bold action. That changed in December when Xcel Energy, one of Colorado’s largest utilities, took a stand for a cleaner energy future. Xcel announced their trailblazing goal of delivering 100 percent carbon-free electricity to Colorado customers by 2050, becoming the first major utility company in the country to do so. As part of their clean energy goals, Xcel also plans to reduce carbon emissions by 80 percent below 2005 levels by 2030 in Colorado and the seven other states in which they operate. Illustrating that combating climate change isn’t just a challenge for Xcel but for all of Colorado, other local utility companies, including Holy Cross Energy and Platte River Power Authority, have sets similar targets. These goals set the stage for Colorado to be a leader fighting against climate change.

100 percent carbon-free electricity is a goal many skeptics say is unfeasible – and with current technology, it’s probably not – but Xcel set this goal knowing the potential for new technology developments. It’s also important to remember the 100 percent carbon free electricity goal is different from 100 percent renewable energy, meaning Xcel is likely to pursue the development of a process of collecting and storing carbon, known as carbon capture. In the end, it will take a combination of new technologies, renewable sources like wind and solar, storage capacity, and even policy changes to make this goal a reality.

Incoming Colorado Governor Jared Polis, who joined Xcel company officials at the announcement, pointed out a different benefit of eliminating carbon-emissions from electricity generation. “It’s not only about carbon; it’s also about cleaner air, which means people are healthier,” Polis said to those in attendance. Cleaner air and healthier people mean economic benefits to Colorado families and the state. Previous research from the Colorado Fiscal Institute estimated the economic value of health costs avoided as a result of better air quality based on the emissions reduction goals set in Colorado Energy Plan which will reduce Xcel’s carbon emissions 60 percent by 2030. Xcel’s new goals will also provide reduced emissions, meaning cleaner air, healthier people, and the economic benefits of fewer missed work days and fewer trips to the hospital for respiratory issues.

For Colorado, the outdoors is a huge part of what make Colorado a great place to live, work, and play. While Xcel’s goal takes a stand conserving and protecting Colorado now and for generations to come, it only reaches one portion of Colorado’s economy. In order to truly be leaders in fighting climate change, lawmakers and public policy experts need to do more. But in taking this step, Xcel has taken big steps towards a future with beautiful mountains, snow to ski on, and beer to drink. Colorado can be hot chocolate with the whipped cream too.

Being able to stay warm during the cold winters is something most of us take for granted. Unfortunately, for far too many people in our state, being able to maintain a comfortable temperature in their homes during winter is difficult. LIHEAP – the Low-Income Home Energy Assistance Program, known as the Low-Income Energy Assistance Program (LEAP) locally – helps keep families healthy and safe by aiding with the cost of heating their homes. But helping people pay the bills doesn’t just provide economic stability for those struggling to afford the basics. LEAP is an investment in Colorado.

And thanks to this investment, LEAP leads to some critical supports for the more than 70,000 Colorado families participating in the program annually:

• $41 million in direct energy assistance in 2018 alone.
• That translates to $389 per family, making a big impact on their energy bills.
• $27 million in direct economic impact and more than $100 million in economic ripple effects.

As renewed threats to LIHEAP (and programs like it) emerge at the state and federal levels, it’s more important than ever to establish a clear and common understanding of why it exists, how it is funded and administered, who is eligible to enroll, and how it impacts Colorado’s economy.

This issue brief highlights why utility assistance matters so much to Colorado families and communities. LEAP doesn’t just help those who are eligible to enroll in the program get the assistance they need, it also helps counteract the effects of economic downturns and recessions, which helps everyone who calls Colorado home.

This brief is part of a more comprehensive report detailing the expansive impact of programs, such as SNAP, TANF, Medicaid and Medicare. These critical tools for lifting people out of poverty are too often discussed in the context of funding cuts. At their core, they represent vital public investments helping otherwise struggling families make ends meet.

If you want to do your part to protect these important tools, there are three things you can do:

1. Follow the Colorado Fiscal Institute on Facebook and Twitter and share this report with your friends and followers there (be sure to tag us when you do).
2. Contact your Congressional representatives to tell them these programs matter for Colorado families. They should protect them both for Coloradans in need, and for the health of our economy.  
3. Find out when your member of Congress or your senators are holding a public forum where you can make your voice heard about this important issue.