Getting a driver’s license is a cornerstone of American culture and has long been seen as a rite of passage into adulthood for teens. However, for families, a license is more than just a rite of passage; it is a necessity.

A driver’s license gives individuals the ability to take care of essential daily needs, making it possible for people to get to work, obtain health care, buy groceries and access child care when public transit is not enough. Yet, for the handful of Colorado immigrants who have uncertain status, a driver’s license remains out of reach.

Legislators and advocates have worked for years to provide and improve access to licenses for undocumented Coloradans, but the changes have been incremental, and access continues to be restricted. In 2013, the General Assembly passed Senate Bill 251, making Colorado one of 12 states to offer licenses to those with uncertain immigration status. However, the scope of the driver’s license program in Colorado is very narrow, wherein only five DMV offices have the authority to issue licenses to undocumented immigrants and additional funding must be appropriated every year to keep the limited number of offices open, even though the program is self-funded.

In 2015, the Joint Budget Committee further restricted the program, reducing the number of offices that could issue the licenses to three DMV offices and then to one when a cap of 60,000 appointments is reached. The 60,000 appointments cap assumes a 30 percent participation rate by those who would qualify, even though the participation rate was well above 70 percent in the year prior. This year, the cap is expected to be reached by the end of the summer, leaving many waiting and unable to get driver’s licenses.

In 2016, for a third year in a row, legislators and advocates came together under the gold dome to make the program more accessible. House Bill 16-1274 proposed an expansion of the SB 13-251 driver’s license program by opening new kiosks at three more DMV offices, bringing the total number of offices that offer the licenses to six. The bill also removed the cap on the number of appointments that can be made in a given year.

These are important changes, because we know that giving unauthorized immigrants access to driver’s licenses makes our roads safer and brings down the cost of driving for all. Without a driver’s license, it becomes nearly impossible to get insurance, and studies show this could have costly implications for all drivers. Researchers found that when access to licenses is restricted for undocumented immigrants, the cost of insuring other drivers increases by an average of $17.22 a year. That is nearly $69 million a year for all Colorado drivers.

The study also found that the presence of undocumented drivers in the insurance pool does not have a negative effect on insurance costs, dispelling the misguided notion that undocumented drivers are somehow unsafe drivers.

House Bill 1274 passed committee and floor debates in the House of Representatives this year and moved to the Senate State Affairs committee, where it was killed.

However, just because this legislative session has come to a close does not mean this discussion should: Colorado needs a driver’s license program that is accessible for all because it’s good for our communities and our economy.

Colorado Fiscal Institute
2016 Legislative Wrap-Up

A lot of exciting things have happened in Colorado since the start of 2016. The Denver Broncos won the Super Bowl and the Colorado Fiscal Institute completed another legislative session.  What do the two have in common?  Very little — but here is our legislative wrap in football terms to celebrate both accomplishments.

TOUCHDOWN!
CFI bills that passed in the 2016 session

SB16-203 – Sen. Lambert, Reps. Hamner & Rankin
Evaluation of State Tax Expenditures
Last year, CFI worked with the Pew Center on the States to develop a bill requiring that all state tax expenditures be evaluated to determine if they are meeting their intended purpose and accomplishing their designated goals. The bill narrowly lost in the Senate despite bipartisan support and unanimous passage through the House.

This year, we brought the bill back, and after working in conjunction with business lobbyists hired by the Pew, the bill was introduced with unanimous, bipartisan support from members of the Joint Budget Committee. To our delight, the bill rapidly sailed through both the House and the Senate without a single vote in opposition. It is currently on its way to the governor’s desk to be signed.

This is a HUGE win for Colorado taxpayers. Without this bill, taxpayers and lawmakers were in the dark about how more than $4 billion of taxpayer dollars was being spent through the tax code. This evaluation will help lawmakers determine how to best spend their limited resources and has the potential to create a more efficient and effective tax code in the future.

HB16-1114 – Rep. DelGrosso, Sen. Ulibarri
Repeal Duplicate Reporting Requirements
This bill eliminates a requirement that all Colorado employers attest that they have verified the legal work status of each new employee, have not altered or falsified employee identification documents, and have not knowingly hired a worker who is not authorized to work in the U.S. The requirement was duplicative of federal law, ineffective, misunderstood by employers and a waste of scarce resources at the Colorado Department of Labor and Employment. CFI worked with sponsors and the business community to ensure passage of the bill. The requirement was one of the last holdovers of the anti-immigration bills passed during the 2006 special session on immigration. The repeal bill this year was unanimously approved by the House and Senate and sent on to the governor’s office for signature.

SB16-179 – Sens. Roberts & Heath, Reps. DelGrosso, Lee & Saine
CDLE Unemployment Insurance Classification
This bill was the product of a data-driven and collaborative stakeholder process between labor, industry and the Colorado Department of Labor and Employment. It is a compromise bill that requires CDLE to provide more guidance on what defines an independent contractor versus an employee for purposes of unemployment insurance. CFI co-chaired the task force with the Colorado Association of Commerce and Industry, testified in support of the bill and worked with the stakeholders to ensure greater clarity around employee misclassification. The bill passed unanimously in House and Senate and is on its way to the governor’s desk.

INCOMPLETE PASS
Bills that didn’t pass this year but CFI hopes to see brought back in the future

HB16-1003 – Reps. Young & Pettersen, Sens. Merrifield & Todd
Middle Class College Savings Act
This bill, a CFI priority bill that we brought back from last year, makes an effort to improve Colorado 529 college savings plans by increasing the incentive to save for middle class families. HB 1003 increased the benefits of 529 plans for those earning up to $250,000 per year, making their tax benefit bigger by increasing the deduction they receive from the state. CFI believes that this would increase the incentive to save and by doing that, not only increase the number of savers, but also the amount that families contribute to their 529 savings plan and have available for college expenses in the future.

This bill was chosen as a caucus priority by the House Democrats. The bill was heard in both House Education and House Finance before passing out of the House on a party-line vote.  Unfortunately, the bill again failed in the Senate. We are hoping to bring this bill back next year after an extensive stakeholder process over the summer.

HB16-1045 – Rep. Singer, Sens. Merrifield & Sen. Kefalas
Starting the Child Tax Credit
In 2013, Colorado passed a state Child Tax Credit via Senate Bill 13-001 that provides a refundable tax credit between 5 percent and 30 percent of the federal credit to working families with children ages 5 and under. The credit is targeted to families with young children because that is the time that child care and other expenses are at their highest. However, the Colorado CTC does not go into effect unless Congress passes the Marketplace Fairness Act. HB 16-1045 would have enacted the state CTC in the current tax year, removing the Marketplace Fairness Act trigger.

The bill was first introduced in the House Finance committee where it was postponed indefinitely largely because of the fiscal impact. However, we hope to see this important bill introduced again in the future.

HB16-1435 – Reps. Duran & K. Becker, Sens. Ulibarri & Kefalas
Low-wage Employer Corporate Responsibility Act
In 2015, CFI published a report outlining the increase in low-wage employment in Colorado.  This research, coupled with our knowledge of certain unfair business practices, led us to help develop and support HB 1435, a bill requiring employers with more than 250 employees who pay less than $12 and don’t provide health insurance to pay an hourly fee used to offset the costs of Medicaid in the state.

After significant press coverage, the bill was presented in the House Health, Insurance and Environment Committee. CFI and other advocates, taxpayers, workers and employers all testified in support of the bill and it passed out of that committee on a party-line vote. The bill then passed House Finance, House Appropriations and was passed out of the House before its unsurprising death in Senate State Affairs.

CFI was excited about the progress the bill made and looks forward to working on the bill this summer and in the next legislative session.

BLOCKED KICKS
Bills that CFI stopped dead in their tracks

SB16-130 – Sen. Scott, Rep. Van Winkle
Methods to Collect Consumer Use Tax
Since 1937, when the sales and use tax was implemented in Colorado, taxpayers have been required to pay use tax when retailers don’t collect and remit sales tax on their behalf. For the 2015 tax year, the Colorado Department of Revenue added a line to the individual income tax form allowing for the expedited remittal of consumer use tax.

This was an innovative and convenient addition for taxpayers who previously had to fill out multiple forms to submit the taxes they owed. CFI was excited about the development.  However, some members of the General Assembly were less enthusiastic about the new convenience. The result was SB 130, a bill that removed the new line on the tax form, prohibiting the collection of sales tax through the income tax form and also barred the DOR from auditing any use taxes owed.

CFI was adamantly against the bill and worked to kill it in the House Finance committee. Using our talking points, members of the House committee pointed out the ridiculousness of making it less convenient for taxpayers to pay what they owe and the bill was postponed indefinitely after a party-line vote.

HB16-1087 – Rep. J. Becker
Increase Vendor Fee for Collecting State Sales Tax
This bill increased the amount of sales tax revenue that could be kept by businesses for collecting and remitting sales tax on behalf of consumers. Known as the vendor credit, this fluctuating tax giveaway primarily benefits large, corporate retailers and rewards businesses for doing something that they are required by law to do.

CFI testified against the bill in both House State Affairs and House Finance, eventually persuading the legislators to postpone the bill indefinitely.

HB 16-1202 – Rep. Wist, Sen. Tate
Mandatory E-Verify
A favorite idea of former Rep. Spencer Swalm, HB 1202 raised from the dead a bill that would have required all Colorado employers to participate in the federal immigration program, E-Verify, to determine the work eligibility status of newly hired employees. CFI testified that the bill would harm our economy, our citizens, our businesses and do little to end unauthorized employment. It would waste state resources, impose new costs on employers, drive jobs into the underground economy and potentially create a market for identity theft. Working with business partners, the bill was killed in House State Affairs Committee.

HB16-1089 – Rep. Moreno and Sen.  Holbert
Endowment or Institutional Fund Gift Tax Credit
This bill, which allowed individual taxpayers an income tax credit for any contribution to an eligible foundation or institution, was opposed by CFI. While we recognize the good intentions behind this bill, research shows that the effect of this type of tax credit is inequitable in that it largely benefits only the wealthiest Coloradans in the top income brackets. The Colorado tax system is already regressive in nature, with low and middle-income families paying a higher effective tax rate than wealthier individuals. CFI recognized that the tax benefits from this kind of credit are taken disproportionately by extremely wealthy taxpayers and is an example implementing a tax policy that increases inequality in the tax code. The bill was killed in House Appropriations.

STOPPED SHORT OF THE GOAL
Bills CFI supported that died this year

HB16-1292 – Rep. Kagan, Sen. Donovan
Income Tax Credit for the Sandwich Generation
This bill created a refundable income tax credit for low- and middle-income families who are members of the “sandwich generation” — those who are supporting both adult and child dependents in one household. CFI was in support of the concept, recognizing the impact on middle-class families who are trying to make ends meet. We testified in support in the House Health, Insurance and Environment Committee, where it passed on a party-line vote. However, as a result of an insurmountable fiscal note, the bill was eventually killed by its sponsor in House Finance.

SB16-136 – Sen. Donovan
Broadband Deployment
SB 136 expanded local government’s ability to provide broadband internet in unserved rural communities. The bill removed the election requirement to determine if local governments could provide internet services, paving the way for local governments to take a more active role in ensuring rural Coloradans have high speed internet. CFI supported this bill to help expand high speed internet access to rural Colorado communities and foster economic growth. Unfortunately, the bill was postponed indefinitely in the Senate State Affairs Committee.

HB 1388 – Rep. McCann, Sens. Guzman & Merrifield
Employer Hiring Criminal History Employee
HB 1388 prohibited private employers from asking for a job applicant’s criminal history on the initial job application. Supporting the efforts led by the Colorado Center on Law and Policy, CFI supported this “Ban the Box” measure as a proven method of reducing Colorado’s recidivism rates and for the positive economic effects the bill would have created for the state. The bill passed the House along party lines, but was postponed indefinitely in the Senate State Affairs Committee due to strong opposition from the Colorado business community.

HB 1403 – Reps. Pettersen & Buckner, Sens. Todd & Donovan
Colorado Secure Savings Plan
HB 1403, a bill led by the Bell Policy Center that CFI supported in coalition, would have created a public-private partnership retirement plan for Colorado, helping making it easier for private sector workers to save. CFI supported this bill as a way of providing retirement plans for the 45 percent of Colorado workers in the private sector who do not have a retirement savings plans at work, and reducing the poverty rates for retirees in the future. Ultimately, opposition from Colorado’s business community culminated in the bill being postponed indefinitely in the House Finance committee.

HB16-1274 – Rep. Singer, Sen. Ulibarri
ID Documents Unlawful Presence
HB 1274 expands the SB 13-251 driver’s license program for undocumented Coloradans by opening new kiosks at a handful of Department of Motor Vehicle offices and removing the current cap on the number of appointments that can be made in a given year. The bill passed through the House before making it to the Senate State Affairs Committee, where it was postponed indefinitely.

We didn’t get a chance to host our annual Pies and Charts event this year so we got to thinking, how about drinks with data? That’s how we came up with the name of this year’s Wrappy Hour – our end-of-session gathering – “Wrappy Hour: Bars and Graphs.”

Can you join us?

Click here to RSVP and let us know you’ll be there.

What: Wrappy Hour: Bars and Graphs
When: Monday, May 16th 5:00 – 6:30 p.m.
Where: Mile High United Way , 711 Park Ave. West

Today, a minimum wage worker in Colorado can only buy about 75 percent of what a Coloradan making minimum wage could purchase in the late 1960s, despite the fact that the average minimum wage worker today is much better educated and much more productive than minimum wage workers were in the late 1960s.

The Federal Minimum Wage

The modern minimum wage was first passed in 1938. From its creation until the late 1960s, the purchasing power of the minimum wage steadily grew, reaching its peak in 1968. Since 1968, the relative purchasing power of the minimum wage has declined dramatically, which means the income of a minimum wage worker todays buys much less than it used to.

Today’s minimum wage would be $11.12 if it had kept pace with inflation since 1968. The current federal minimum wage is $7.25, where it’s been since 2009.

The Colorado Minimum Wage

In 2006, 53.3 percent of Colorado voters approved the Colorado Minimum Wage Increase Initiative. Also known as Initiative 42, this constitutional amendment raised the minimum wage to $6.85 an hour from the previous level of $5.15, which was the federal level at the time. It also tied the future state minimum wage to the Consumer Price Index, which ensured that the Colorado minimum wage would be adjusted for inflation each year.

Colorado’s minimum wage is currently $8.31 an hour, which is above the federal rate. It would be $11.12 if it kept the same purchasing power as the minimum wage in 1968.

Between 80,000 and 100,000 workers are currently paid the minimum wage in Colorado. This represents about 4.2 percent of the total workers in the state.

Minimum Wage Benchmarks through the Years

Today’s minimum wage is low in many aspects compared to historic levels. The minimum wage hasn’t kept up with inflation or adjusted for the fact the workers are more productive. The minimum wage has also lagged behind the growth of the wages of other workers.

The federal minimum wage is only two-thirds the real value it was back in 1968, and Colorado’s minimum wage is three-fourths its historic value.

The minimum wage hasn’t kept pace with the increase in workers’ productivity. Back in 1968, the minimum wage was worth 33.7 percent of the average output per hour worked; now it has fallen to below 15 percent. Even though workers are twice as productive as they were in 1968, the minimum wage is worth much less.

In addition, the average worker making low wages is better educated than in 1968. Only 17 percent of 1968 workers in the lowest 20 percent of the wage distribution had a college education, compared to 46 percent today. Minimum wage has lagged behind the wage growth of other workers. In 1968, the minimum wage was 52.1 percent of the national median wage. The minimum wage in Colorado today is only 41 percent of the national median wage.

Other states have been gradually increasing the minimum wage over several years back to its historic value. If Colorado wanted to catch up with inflation since the late 1960s, it should adopt a minimum wage of $12.13 by the year 2020.

CFI Minimum Wage Brief

By Ali Mickelson

Director of Legislative and Tax Policy

If you pay attention to the bills that are introduced, you may have seen one recently referring to the “Sandwich Generation.”

While the immediate image that comes to mind a group of Millennials in line at Subway, the term actually refers to a growing population of adults who are being “sandwiched” between two generations requiring care. The Sandwich Generation is a term for the increasing number of Americans who are financially supporting both children and an adult over the age of 65. One in seven middle-aged adults fits into this category in the United States, and 71 percent of this group is between 40 and 59 years of age.

The number of Americans in the Sandwich Generation has been increasing as has the cost of supporting multiple generations. With the staggering price of in-home medical care for elderly adults, including more than $21,000 per year for home-health assistance and an additional $3,600 per year for expenses such as groceries and prescription drugs, it is not surprising that caring for elderly family members is squeezing the family budget. However, in reality, the increased pressure on the Sandwich Generation is primarily coming from grown children rather than dependent adults.

Grown children moving back home has become more prevalent since the Great Recession. Forty-eight percent of middle-aged adults provided some financial support to a grown child in 2012. Young adult employment rates are the lowest they have been since the census started collecting unemployment data in 1948. Additionally, from 2007 to 2011, even young adults who were employed full-time experienced lower average weekly earnings than any other age group.

Supporting these adult and child dependents does not come without cost to the caregiver. For women, total lost wages due to leaving the labor force early and/or reduced hours of work because of caregiving responsibilities equals roughly $142,693. This results in lost Social Security benefits of $131,351 and lost pensions of approximately $50,000. Thus, in total, the cost of caregiving for women in lost wages and retirement benefits equals $324,044.

For men, total lost wages due to leaving the labor force early and/or reduced hours of work because of caregiving responsibilities equals $89,107 with an additional $144,609 in lost Social Security and $50,000 in lost pension. The total equals $283,716 for male caregivers.

Nationally, employers lose an estimated $33.6 billion as a result of caregiving, which equates to $2,110 per employee. This is in part because 70 percent of adults in the Sandwich Generation have to change their work hours to accommodate caregiving.

Those are just the direct financial costs those in the Sandwich Generation may have to absorb. There are many other considerations that can have an impact on adults caught in the middle.

For instance, members of the Sandwich Generation report decreased health outcomes, including increased emotional hardship and physical strain. In fact, employers’ health care costs are estimated to be 8 percent higher for employees with elderly caregiving responsibilities, which costs U.S. employers an estimated $13.4 billion annually.

Despite all of the social and economic costs, 75 percent of adults report wanting to be able to care for their elderly parents even when they are already caring for children. That is why this credit is particularly important. House Bill 1292 provides a refundable tax credit of up to $3,600 for members of the Sandwich Generation. This money would be tremendously beneficial to those families who need the additional support and is a good way for our legislators to target money at middle-class Coloradans.

By Chris Stiffler

CFI Economist

For months, there has been anxiety over cuts to state services coming in the 2016-17 budget, cuts to such programs as education, healthcare and colleges. Gov. John Hickenlooper in November had recommended cuts to higher education, capital construction and to Medicaid reimbursement rates to deal with a then predicted $373 million shortfall. Latest estimates now show the cuts to the 2016-17 budget won’t be nearly as dramatic as thought in November. Here are five takeaways from the “long bill,” also known as the state budget in legislative form:

1. The budget shortfall for FY 2016-17 will not be on the back of education as neither colleges nor schools will see the budget cuts initially expected when the governor released his budget proposal a few months ago. This is good news for the education community considering that the governor’s proposed budget initially included $20 million in budget cuts for colleges and universities and $50 million in cuts to K-12. The proposed budget, however, does not allow K-12 to make up any ground on inflation. The negative factor will remain at $831 million.

2. Part of the budget shortfall for FY 2016-17 will be bridged by reducing the general fund’s “savings account.” Currently 6.5 percent of the general fund is placed in a reserve to help offset the need for budget cuts during tough economic times. The FY 2016-17 budget will drop that general fund reserve from 6.5 percent to 5.6 percent, which frees up about $84 million. With such a low level of savings, it is difficult for Colorado to weather an economic downturn (when tax revenue isn’t as abundant) without making cuts.

3. The FY 2016-17 budget shortfall will largely be addressed by cutting medical services for low-income Coloradans. The proposed budget would reduce the Hospital Provider Fee by $73 million. This has the effect of freeing up some general fund dollars because Colorado won’t be issuing TABOR rebates in 2017. These cuts hurt twice as much because they also reduce the amount of federal dollars Colorado draws in to help pay for medical care for low-income and disabled populations. The reduction in dollars for Medicaid to help balance the budget will be done by lowering reimbursements to primary care doctors, which will make it harder for Medicaid patients to access a primary care doctors.

4. The proposed budget decided to split the difference for the money available to be transferred for transportation. For the last several months, slight fluctuations in tax revenue collections determined whether transportation received about $200 million or $100 million (known as 228 transfers). Instead of relying on “hair pin trigger” budgeting, the proposal settled on roughly $150 million for transportation. The budget also allocated about $50 million for capital construction.
5. The FY 2016-17 budget illustrates the difficult decisions Colorado budget-makers must deal with in a fiscal environment with low taxes and a small state government. Despite the strong economy, Colorado’s limited state tax collections forces budgeters to make funding trade-offs between schools and healthcare. It also highlights the state’s special fiscal conundrum — the fact that Colorado makes cuts to services during bad times and during good economic times. This budget also accentuates how complicated it is to adequately fund state services when legislators’ hands are tied by rigid formulas.

CANCELLED

Pies and Charts

The Colorado Fiscal Institute’s

Mid-Session Briefing

CFI’s Pies and Charts will be cancelled due to the weather. We apologize for any inconvenience. Stay warm out there! 

RSVP here

By Chris Stiffler

CFI Economist

Five essential takeaways from the March 2016 state revenue forecasts.

1. Shrunken rebates.

TABOR rebates in 2016-17 will be smaller than previously thought. The latest legislative council projections say rebates in the 2017 tax year will now be $59.3 million, which is roughly $15 per taxpayer. Previous estimates put rebates at $192 million for 2016-17, or about $49 per taxpayer. Even so, it still means lawmakers will have to trim the budget even as the state issues rebates.

2. “Hairpin triggers.”

Because TABOR rebates will now be a significantly smaller amount, under Colorado’s complex budget rules, it triggers full transfers of about $250 million from the general fund to transportation needs. Previously, transfers had been half that. While this money will help fix highways, what it means is that it’s that much less money for schools, colleges and other priorities. But that’s how the crazy restrictions on our budget work, pitting roads against schools and other things everyone agrees we need.

3. A contest for the ages.

The revenue from Amazon could be really huge – or not. Estimates from Legislative Council show that in the 2016-17 fiscal year, the state would see $142.9 million in new sales tax revenue just from Amazon collecting it on Colorado purchases. However, the governor’s budget office predicts the amount from Amazon at just $22 million. That’s a big difference, but in any case, the money might not do anything to help offset cuts to schools and other services. That’s because current projections show the state would just be refunding the revenue.

4. “Negative per capita revenue growth.”

The state’s population continues to grow at a higher than average rate (1.9 percent), but because the global economy is slowing so much, added to the slowdown in the state’s oil and gas sectors, the revenue collected per resident is actually falling this year.

5. Falling inflation.

Oil prices at the end of 2015 dipped dramatically, causing the prices of consumer goods to grow only about half as much as they would have otherwise. But this 11th-hour change had a weird effect on the state. The TABOR cap is set according to population growth and the rate of inflation. With the rate of consumer inflation suddenly plunging at the end of 2015, it restrained the growth of the TABOR cap. Where inflation had grown at a rate of about 2.8 percent the last few years, it will be limited to 1.2 percent in 2016. But the state’s costs aren’t tied to consumer inflation. The things it buys, like highways, bridges, college buildings, teachers, health care and so on aren’t tied to consumer inflation. So even in years when the TABOR cap grows at a standard rate of consumer inflation, it heavily restrains the state’s ability to maintain the same levels of services from year to year. In a year with an unexpected drop in consumer inflation, the TABOR cap can cause a sudden crisis.

I often joke that picking the worst bill of the session is like choosing between my children, but, so far this year, Senate Bill 130 has to be my favorite.

SB 130 is a bill that will ban the Department of Revenue from collecting use tax on income tax forms, as the agency began doing this year. It will also prohibit the department from auditing use tax collected. From my point of view, this bill basically ensures the state collections agency can’t do its job, while pardoning intentional tax dodging and making it more difficult for Colorado taxpayers to comply with the law. A real trifecta of bad policy, if you will.

To provide a little background, taxpayers are required to pay use tax when sales taxes aren’t collected by a retailer on their behalf. That has been the requirement since the sales and use tax was enacted in 1937, but often people are unaware of this responsibility. With the rapid increase in internet purchases, the use tax requirement has become more prominent, as consumers technically owe use tax on internet purchases from companies (Overstock.com, EBay, and formerly Amazon, for example) that don’t collect sales tax in Colorado.

The Department of Revenue has finally made it easier to comply with the requirement by adding a line on the Colorado income tax form for the calculation and remittal of use taxes. This is a simple and convenient way to pay use taxes that will likely result in an increase in compliance, and thus state revenue. Yet, SB 130 forbids the DOR from including this line on the tax form and from auditing use taxes collected.

As an analogy, say I have a fire hydrant by my house, and I am having difficulty determining how close I can park without encroaching into a no-parking zone. Then CDOT comes along and paints the no-parking zone red, making it easier for me to see the no-parking zone. If the reasoning behind this bill stands, instead of no longer parking in the no-parking zone that I can now see, I should instead park in the zone and then ban CDOT from painting no parking zones red and giving me tickets when I park illegally.
Craziness.

Or say there is a school zone you drive through on the way to work, however there’s no sign alerting you where the school zone begins. Then CDOT comes along and adds a flashing school zone sign so you can now see where you should slow down to be more aware that children are present. Using this bill’s logic, though, not only would you not slow down, you would ban school zone signs and forbid the police from giving tickets for speeding through the area.

Just to add insult to injury, SB 130 also reduces revenue by $2 million by increasing the number of taxpayers in noncompliance with the law. That just seems like the most backwards use of tax dollars.

My favorite child has now passed Senate Finance and is headed to Senate Appropriations.

By Ali Mickelson

Director of Tax and Legislative Policy

“Don’t call it a comeback!  I’ve been here for years”*

As with Joe Montana and the McRib, a legislative comeback can elicit excitement and celebration.

Sometimes legislators and advocates hope for similar receptions, pushing bills that are second, third or fourth attempts at enacting certain policies. Many of the pieces of legislation we are supporting this year are “comeback” bills that we’ve  pushed in the past. For various reasons, these bills failed in previous years, but we’re hopeful they will go the distance in 2016.

First, we are again hoping to pass a tax expenditure reporting bill that requires the state auditor to evaluate all 200-plus tax credits, deductions and exemptions in Colorado’s tax code. We think this is a common-sense policy that ensures Colorado lawmakers make the best, most informed decisions about where they spend our tax dollars. This bill has not yet been introduced but is likely to come out of the Joint Budget Committee, and we anticipate it will again receive bipartisan support.

Another bill that has been brought back is HB 16-1003, the Middle Class College Savings Act. This measure will incentivize low- and middle-income families to save for college by increasing their state tax deduction for contributing to a 529 college savings plan. Sponsored by Reps. Pettersen and Young and Sens. Merrifield and Todd, the bill is a great, fiscally neutral way to support Colorado families that are struggling with the increasing expense of higher education while creating more equity in the tax code.  The bill passed out the House Education Committee on March 7 and next moves on to the House Finance committee.

A third blast from the past is HB 16-1045, which creates  a Child Tax Credit. In 2013, CFI worked to pass SB 13-001. This bill made permanent both the Earned Income Tax Credit and the Child Tax Credit if certain triggers were met.** However, the trigger for the Child Tax Credit has still not been met, so this bill removed the trigger and created a permanent , statewide Child Tax Credit today, sans trigger.

Although it comes with a significant fiscal note, CFI has been a longtime supporter of the Child Tax Credit because we know that it creates opportunities for families with children and reduces the number of children in poverty. The federal CTC lifted roughly 3.1 million people out of poverty, including 1.7 million children in 2013. Research also shows that children in families that receive additional income through tax credits like the CTC do better in school and are more successful as adults.

Unfortunately, this bill was killed in the House Finance Committee earlier this month, largely due to questions around the fiscal impact in light of a strapped state budget. However, I have a feeling this will not be the last appearance of the Child Tax Credit and it may again land on our list of comebacks.

One thing that has definitely come back is CFI’s focus on equity as a framework for our legislative activities during the 2016 session. By evaluating the impact of bills on economic equality and examining who benefits from certain policies, CFI will be dedicating our resources to lifting up ideas that promote equity and widespread prosperity for all Coloradans — especially those working to make an economic comeback of their own.

If you would like to join our coalitions supporting any or all of these bills, please contact Ali Mickelson at mickelson@coloradofiscal.org.

*James Todd Smith, a.k.a., LL Cool J

**We met the trigger for the EITC in 2015, and that tax credit is now available to Colorado families.  Yippee!