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We envision a Colorado where responsible, people-centered economic and fiscal policies advance equity and widespread prosperity. |
CFI’s Economist Chris Stiffler has written a brief on income inequality in Colorado. It’s only three pages, but it sums up historical trends in Colorado and how we fare in comparison to the rest of the nation.
Read it here: Colorado Inequality Brief
A new analysis from the Colorado Fiscal Institute calculates that workers in our state are deprived of an estimated $749.5 million per year in wages they are legally owed.
Though that figure is less than 1 percent of all wages earned by Coloradans in a given year, it represents a huge amount of money for mostly low-income workers who now have little recourse when deprived of lawfully earned wages.
CFI’s analysis comes as the Senate Judiciary Committee is set to take up SB 5 on Wednesday. The bill, sponsored by Sen. Jesse Ulibarri and Rep. Jonathan Singer, strengthens worker rights to pursue wage claims and steps up enforcement on the relatively small number of employers who do not follow the rules.
More than a half million Colorado workers, the greatest number in the construction and food service industries, are affected every year by nonpayment of wages, which occurs when employers either don’t pay owed wages, underpay what’s owed, charge illegal deductions to workers, misclassify workers as supervisors or independent contractors or improperly share their tips.
As harmful as non-payment of wages is on workers, there is a ripple effect for the entire state that comes in the form of lost tax revenue — a sum that approaches $50 million in lost state sales and income taxes alone, revenue that is used to pay for vital services like schools and colleges.
Read the analysis here:
Gross Domestic Product, or GDP, tells us a lot about what an economy produces and how much. But what does it tell us about whether most people are better off, economically speaking?
As a new research paper from CFI’s economist, Chris Stiffler, notes, economists for years have been trying to come up with a better way to measure economic well-being than GDP. What a number of leading economists have suggested in recent years is using a measure called GPI, or the Genuine Progress Indicator, to measure economic progress. Stiffler’s research calculates GPI, expressed as a per capita dollar figure, in Colorado for the first time.
What his research shows is that while GDP has continued to grow steadily for decades, Coloradans have not seen the same kind of economic progress.
Click here to read the research paper or check out our GPI two-pager.
Also, listen here to Stiffler explaining his research and the concept of GPI to Ryan Warner on CPR’s Colorado Matters.
Here are the materials for the 2014 Colorado Fiscal Forum featuring Robert Reich, presented by the Colorado Fiscal Institute.
Agenda:
Speaker Bios:
Speaker Bios 2014 Fiscal Forum
The Genuine Progress Indicator in Colorado:
ManagingRevenue in a TABOR Environment:
TABOR Rebates:
It’s been 50 years since President Lyndon Johnson declared a war on poverty. But what exactly did the U.S. do and how successful has it been? Kathy White, deputy director of the Colorado Fiscal Institute, talks to Maeve Conran on KGNU’s Morning Magazine about gains for the poor in the last five decades and what’s been happening to the safety net lately. White also explains what the situation is in Colorado.
Listen:
By Ali Mickelson
Despite the Colorado economy’s continued growth, state revenue projections have been lowered from prior estimates as expectations for income tax collections fall, legislative economists revealed last week.
Even so, Legislative Council economists presenting the regular quarterly economic forecast predicted lawmakers still will have 16.2 percent more general fund revenue in the 2014-15 fiscal year to invest in state priorities than they had in the 2013-14 budget year, which ends in June.
Economists said the December forecast showed the outlook for Colorado’s economy continues to remain positive, with growth in employment, sales and housing continuing through 2014. This expansion has already resulted in $512 million more in general fund revenue than budgeted for in 2013-14. Three-quarters of this additional money, or $361.5 million, will be transferred to the State Education Fund, and $30 million will be transferred to the Colorado Water Conservation Board Construction Fund, leaving $120.5 million more than the required statutory reserve.
Including this remaining surplus, Colorado should see an increased general fund budget of $1.37 billion in fiscal year 2014-15.
Growth in the economy also means the state is closer to the TABOR limit, which automatically triggers tax rebates when exceeded by revenue. Legislative Council predicts the state will be roughly $200 million below the limit in both FY 2014-15 and FY 2015-16. Yet while the forecast indicates growth will be insufficient for TABOR refunds in the next two years, Legislative Council notes that if the economy and revenue increase faster than anticipated, the TABOR limit could be reached as early as in the current fiscal year.
The strong housing market and robust oil and gas exploration translates to good news for Colorado schools, with an estimated 2.2 percent increase in assessed property values, most notably in Weld County on oil and gas properties. This money will be critical in supporting the 1.5 percent increase in students expected in the 2014-15 school year.
The increases in general fund revenue do not all translate into additional support for schools and other state priorities. The additional revenue also means the return of certain state tax credits and exemptions that are dependent on revenue growth. These credits include the in-stream flow income tax credit, the sales and use tax exemption for clean rooms, the child care construction income tax credit, the historic property preservation income tax credit and the clean technology medical device sales tax refund.
Nearly 18,000 out-of-work Coloradans will lose their unemployment benefits three days after Christmas if Congress doesn’t extend funding for emergency benefits into 2014.
But an estimated 72,800 Coloradans in total would lose unemployment benefits throughout 2014 if federal funding for the Emergency Unemployment Compensation program isn’t continued.
Those numbers, from the U.S. Department of Labor, are part of a stark picture that would be painted nationally if the emergency benefits aren’t continued. Nearly 5 million Americans would lose these extended unemployment benefits, the only source of income for many families still trying to recover after the Great Recession.
These federally funded emergency unemployment benefits go to the long-term unemployed, those who have already exhausted the regular 26 weeks of state-funded unemployment. Such emergency benefits have been an important bridge for the unemployed in every major recession since the late 1950s, and during the Great Recession, more than 356,000 Coloradans relied on these benefits to help get through tough times.
In prior recessions, Congress waited until the job market rebounded and the long-term unemployment rate dropped before allowing the program to phase out. This year, though, despite calls from some key lawmakers to continue the program, Congress failed to include an extension in last week’s budget agreement between House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Patty Murray, D-Wash.
That lack of action means Coloradans currently receiving emergency unemployment benefits will be cut off immediately on Dec. 28. And that’s despite the fact that the long-term unemployment rate is twice as high as when lawmakers allowed emergency benefits to expire in any previous recession.
Colorado’s economy is on the mend, but the situation is still dire for people who have been without a job for an extended period of time. Last month, Colorado’s unemployment rate dipped to 6.8 percent, and after declines in August and September, the state saw an increase of 1,500 jobs. But with an estimated three job seekers for every opening, things are still tough for unemployed workers who have used up their savings and find it harder to find work the longer they’ve been unemployed.
When Congress returns in January, its first priority should be to restart emergency jobless benefits so unemployed workers and their families can have a fighting chance in the new year.
By Ali Mickelson
It felt like Christmas morning when I opened the Colorado Department of Revenue webpage, searching eagerly for the link. After two years of waiting and several more years of effort, one click would finally lead me to important state tax information that had previously been mysterious. The new Colorado Tax Profile & Expenditure Report had finally been published and I couldn’t wait to read it. Now, in one document, I could determine how much money the state is giving up through various tax breaks, who benefits from them and how much all of this is costing Colorado each year.
I could compare the tax rates that low-income Coloradans pay to what others pay. This is important for making targeted policy decisions that benefit low-income families. I could calculate the average amount of business income deducted from Colorado tax returns by income class – another great way to determine where tax policy should be focused in the future. In short, I now had access to the tax information jackpot and I couldn’t wait to open this gift that would help me understand who pays what and what we’re getting in return.
Our organization, then known as the Colorado Fiscal Policy Institute, worked to pass the legislation in 2011 that molded and mandated this report. After months of negotiation with business leaders, legislators and the state Department of Revenue, the General Assembly passed legislation requiring publication of the Colorado Tax Profile & Expenditure Report every other year for five years. The study was paid for in part by revenues generated from a tax amnesty.
This report is an important step towards transparency and accountability in Colorado. It allows policymakers and the public to see where the state is spending money that previously was hidden in the tax code. Now we can see how that spending affects Coloradans at all income levels. We have further evidence that inequities in the state tax system exist, that low-income Coloradans pay a higher percentage of their income in taxes than the wealthiest. This report highlights tax code “winners” and “losers” in Colorado, and provides the information we all need to make sure tax policy decisions can better serve the public interest.
The Colorado Fiscal Institute is already using this information to analyze the state budget and evaluate policy choices. We will be widely sharing our findings with lawmakers and taxpayers.
Within the next few years, the legislature will vote on whether to continue to appropriate money for the Colorado Tax Profile & Expenditure Study. We hope that once lawmakers see the relevance and necessity of this key policy tool, they too will look forward to its publication as much as I did. Merry Christmas to all and to all good insight.
What are the effects of immigration on Colorado’s economy? Chris Stiffler, economist for the Colorado Fiscal Institute, laid it out for listeners on KGNU’s “It’s the Economy,” on the Thursday, Nov. 21 edition of the show.
Stiffler has written several papers on the economic effects of immigration that show it’s overwhelmingly positive for Colorado. In fact, Stiffler illustrates how policies that detain and hinder undocumented immigrants from working are cost-inefficient and actually hurt the state’s economy.
The segment of the show featuring Stiffler’s comments can be heard here starting at the 48:00 mark.
By Ali Mickelson
With the November election in the rear-view mirror, Colorado lawmakers are turning their eyes to the upcoming legislative session, beginning with the November 1 release of Governor Hickenlooper’s Fiscal Year 2014-2015 budget request. This year’s budget request focuses on restoring cuts to higher education, boosting the state’s reserve and flood and disaster relief.
The governor has requested a total budget of $24.1 billion, of which $9 billion is General Fund. These numbers are based on September 2013 revenue estimates from the Office of State Planning and Budget (OSPB) and represent a 4.5 percent increase in the General Fund and a 4.7 percent increase in total funds.
The governor is recommending the following:
General Fund Statutory Reserve
As a result of the Great Recession, the General Fund statutory reserve account has dropped to 2 percent. The governor’s budget increases the reserve amount to 6.5 percent.
K-12 Education
The governor’s budget includes $258 million in new funding for K-12 education – $223 per pupil. The additional funding is due to increased enrollment and the higher cost of educating kids due to inflation. 57 percent of the new funding will come out of the State Education Fund.
Higher Education
The governor’s budget increases higher education funding by $101.8 million – a 15.5 percent increase. This will restore higher education funding to its peak before the Great Recession. This includes $40 million in student financial aid, which is a 42 percent increase– the largest in Colorado history.
Health and Human Services
The governor’s budget increases funding for health and human services by 7.1 percent or $618 million. Of this, $165 million will come from the General Fund, a 5.9 percent increase. This is in part, due to the growth in Medicaid caseload. Medicaid enrollment is expected to increase by 154,431 clients this year.
Economic Development
The governor recommends increasing tax incentives to certain industries. The budget includes $5 million more in funding to Advanced Industries, as described in HB 12-001; $5 million in tax breaks for the film industry; $3 million to the Economic Development Commission Strategic Fund which provides cash incentives for businesses that create jobs in Colorado for at least a year; and $2 million to promote tourism in Colorado.
Corrections
OSPB predicts that incarceration rates will increase by 2.3 percent, which means 451 additional offenders in Colorado prisons. These new prisoners will cost $4.8 million in General Fund dollars. Coupled with increases for prison medical costs, sex offender treatment monitoring and a more than $10 million increase for the Division of Parole, the Department of Corrections will receive a $42.4 million (6.3 percent) increase from the General Fund.
Capital Construction
The governor’s budget includes a $199.3 million transfer from the General Fund to the Capital Construction Fund. This transfer will be used to complete a variety of projects including maintenance projects around the state for higher education, a library renovation at the Auraria campus, and three certificates of participation to Anschutz Medical Campus, Federal Mineral Lease and the Centennial Correction Facility.
Now that the Governor has presented his budget, the Joint Budget Committee (JBC) is back in business, meeting regularly and considering budget requests from all state departments. The JBC will eventually evaluate and compile the requests into the “Long Bill”. For detail on the Long Bill process, click here.
For the govenor’s complete budget request, click here
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