HB 1162: Concerning the reinstatement of the state sales and use tax exemption for soft drinks
Wednesday, February 23, 2011
Written Testimony before the House Finance Committee
My name is George Awuor, and I am a policy analyst with The Bell Policy Center. The Bell is a non-partisan, non-profit research and policy organization dedicated to expanding opportunity for all Coloradans.
Last year (2010), we supported a package of bills introduced by Governor Ritter to help balance the 2010-2011 budget. The package of bills which passed into law increased revenue by $131 million. Included in the package was House Bill 10-1191, which subjects candy and soft drinks to the state sales and use taxes.
We supported the balanced approach taken by the 2010 legislature in addressing our budget shortfall – including limiting, suspending or repealing some of the existing tax credits and exemptions.
We currently face a $1.2 billion shortfall in the General Fund for fiscal year 2011-2012. To balance the budget, Governor Hickenlooper proposed deep cuts in K-12 education as well as cuts in other state services.
The Bell opposes House Bill 1162 because, according to the Legislative Council estimates, it will reduce revenues by $12 million in 2011-12. We must consider the tradeoffs. If this bill passes, most of the $12 million will be cut from K-12 education, healthcare and other critical public service programs.
During these challenging times, revenue for K-12, health care and other critical public service programs are more valuable than exempting soft drinks from the state's 2.9 percent sales tax.
Thank you for the opportunity to share our thoughts with you.