The 2022 legislative session mirrored the complicated and confusing economic circumstances it was trying to tackle. With funds designed to help pull us out of a catastrophic pandemic and a very rare amount of one time state dollars, the legislature attempted to quell concerns over rising costs as best it could, keenly aware that structural issues that predated the pandemic still remain to be tackled. 

And while important foundations were laid for housing and childcare affordability, it is clear to us that the big work of making our state’s funding fair and sustainable will have to wait until next year. 

From our perspective, many of this legislature’s efforts to reduce the cost of living for those most impacted by economic inequality often got confused with broad based tax and fee relief that papered over our state’s financial challenges and a lopsided tax code that benefits its wealthiest residents. Lost in the messaging is the idea that state and local services, when adequately funded, actually save many people money. That’s why we emphasized the need for targeted tax and fee relief whenever possible. 

It’s impossible to evaluate this legislative session without considering the coming election and the various political crosswinds that distracted them from their tasks. Despite these distractions, the 2022 legislative session dedicated itself to continuing a vision for a Colorado that we have long fought for; delivering on support for our public education system and future of work, housing affordability, helping our aging population, the caring workforce, and broadly supporting workers.

Fiscal Issues

• Colorado’s economy has rebounded mightily since 2020, leading to the ability to invest in Colorado communities and provide help and support to Coloradans across the state. But this reality on the macro level is masking a lot of pain and affordability issues for millions of people across our state. Our own data shows that while median wages have remained flat, income at the very top has increased dramatically.  Given the increase in temporary federal dollars, lawmakers decided to pass along tax and fee relief for people across Colorado to help alleviate some of these cost burdens.
  
  
• A host of income tax cut measures were brought forward in the legislature this year, and more are coming on the ballot. Fortunately, legislative leaders stood strong and defeated these regressive proposals that would have put more money into the hands of the already wealthy.
  
  
• With our state’s largest TABOR rebate slated to go back to voters in 2023, there was a huge opportunity for the legislature to update the rebate formula to reflect the needs of today’s economy. Specifically, The Bell Policy Center supported efforts to even the entire TABOR rebate taxpayers received, so that every taxpayer regardless of income received the same amount back. We also urged legislators to question whether or not taxpayers who earned over $500,000 in annual income should receive any rebate at all.
  
  
• The Governor’s announcement of $400 “Colorado Dividend” checks, essentially reforming the six-tier sales tax portion of the rebate formula, reflected this advocacy. Future efforts to reform the TABOR rebate mechanism should also include an examination of the temporary income tax reduction that occurs in surplus years. When our flat income tax rate is reduced, 24 percent of income tax cuts go to the top 1 percent of Colorado taxpayers. More importantly, however, we must get back to the fundamental conversation about how these dollars are not “surplus” dollars. By 2024, the state will run out of room between its priority expenditures and TABOR’s arbitrary revenue cap. While we support tax relief for low and middle income families, we reject the argument that these dollars, the revenue collected from current tax rates, are not needed to fully fund our schools and all of the other vital public services Coloradans expect from their state.
  
  
• Of course, to fully fund those services, adequate property tax revenue is essential. The future of that revenue came into question as various groups submitted ballot proposals that would severely limit the amount of tax revenue collected by local governments. Here, The Bell Policy Center played an instrumental role in educating the public about these dangerous measures and advancing our own measures to counter their impact. After all parties agreed to withdraw their ballot initiatives, the passage of SB-238 should be viewed as a time out from the debate, but not a resolution. Over the next two years, the bill will temporarily lower property tax rates for residential and commercial properties, reducing revenue across the state by $700 million. The deal also includes broad exemptions for residential and commercial properties. Any future attempt to reform our property tax code must create a smarter system that can distinguish between high value homes, apartment buildings, short term rentals, and other kinds of housing in an effort to create a fairer revenue base for our local communities, and ensure that tax relief is going to Coloradans that need it.
  
  
• New ballot title language requirements, passed by last year’s legislature, played a significant role at the title board. Proponents of extremely damaging measures received ballot titles that reflected the funding hit that communities would see. This year, the Bell worked hard to pass SB-222. If approved by voters in this year’s election, any ballot measure changing income tax rates will include a tax table showing how the change impacts various tax brackets. We’re excited to work with a broad coalition of advocates to ensure the measure passes.