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Colorado Democrats Want to Take Away Taxpayers’ Refunds, Give the Money to Public Schools

Representatives in the Colorado State House in Denver

Two Colorado Democrats are proposing a bill to take TABOR refunds away from taxpayers and use them to fund education instead. Pictured: Lawmakers in the Colorado House of Representatives in Denver on May 10. (Photo: Hyoung Chang/ Media News Group/The Denver Post/Getty Images)

Two Colorado Democrats plan to file a bill to redirect a popular taxpayer refund, sending the money to public schools instead.

“My feeling is that the voters would prefer to have the services that align with their values, such as making sure our kids get a public education, making sure our teachers get paid,” state Rep. Cathy Kipp, a Fort Collins Democrat and former Poudre School District board member, told The Daily Signal in a phone interview Tuesday. She argued that “K-12 education is really in trouble.”

Kipp sent The Daily Signal a draft of her legislation to redirect refunds to education. The state’s Taxpayers’ Bill of Rights (TABOR), a state constitutional amendment approved in 1992, limits the amount of taxpayer funds the state government can retain and spend. If the government collects more money in taxes than the limit—the prior fiscal year’s actual revenue or limit, adjusted for inflation, population growth, and voter-approved revenue changes—taxpayers get a refund.

Measures to allow the state to keep TABOR money have failed. Voters rejected Proposition CC in 2019. Initiative 63, which would have redirected TABOR refunds to public education, failed to even make the ballot in 2022.

Instead, voters overwhelmingly approved an income-tax decrease, Proposition 121, by a 65%-35% margin. The measure lowered the state income-tax rate from 4.55% to 4.4%, saving taxpayers more than $400 million per year, according to Ben Murrey, the director of fiscal policy at the Denver-based Independence Institute.

“The Colorado General Assembly sent a measure to the ballot in 2019 asking voters to give up their TABOR refunds and got a resounding ‘no,’” Murrey told The Daily Signal. “In both 2020 and 2022, Coloradans voted to lower their income taxes. And just last year while on the campaign trail, Democrats celebrated the $750 checks that went out to every Colorado taxpayer, thanks to TABOR. I cannot think of anything more tone-deaf than now introducing a bill to permanently repeal these refunds.”

“A trend seems to be arising in which Colorado Democrats run their campaigns as champions of TABOR refunds during election years and then move to abolish those refunds in off years after they win their elections,” Murrey added.

Murrey has argued that Colorado taxpayers need the money as they face increasing inflation.

Kipp, however, said she wouldn’t describe herself as a fan of the refunds.

“I’m not going to say I’m a champion of giving money back to people when we are underfunding our services,” she told The Daily Signal. “I’ve never been a huge TABOR person.”

She noted that Colorado taxpayers saw a larger-than-expected tax refund last year after an unexpected surge in income-tax collections led to a 21.8% increase in the discretionary revenue available to the state.

Kipp said that many Coloradans appear to think that if “K-12 education is really in trouble, we’re not going to have trouble getting people to vote for funding it.” She said that the education system does face a crisis.

The Democrat cited an August Economic Policy Institute report highlighting the pay disparity between teachers and other careers, which found that Colorado has the largest pay gap. On average, Colorado teachers earn 35.9% fewer dollars than college-educated non-teachers.

“People do not understand the dire situation that we are in,” Kipp said. “We had a teacher shortage before [the pandemic]. It’s a lot worse now.”

Her bill would permanently give Colorado the ability to use TABOR refunds for education, without endangering other benefits, such as the senior homestead exemption.

Colorado’s Democratic governor, Jared Polis, did not respond to The Daily Signal’s request for comment. State Sen. Rachel Zenzinger, an Arvada Democrat and former teacher who is planning to introduce Kipp’s bill in the Colorado Senate, also did not respond.

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