Anticipated Smaller TABOR Refunds Foreseen in Colorado’s Fiscal Future

Colorado’s fiscal outlook projects continued Taxpayers Bill of Rights (TABOR) refunds for residents over the next three years, albeit smaller than previous years, as state economists estimate excess revenues above the TABOR cap, expected to result in an $800 refund for taxpayers in the upcoming income tax filings.

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Anticipated Excess Revenue and TABOR Refunds Projections

State economists forecast a total of $3.7 billion in revenue exceeding the TABOR cap, with subsequent income tax filings expected to yield an $800 refund for taxpayers. This trend of excess revenue is foreseen for the next three fiscal years, albeit at lower levels than previous fiscal periods.

The Office of State Planning and Budgeting (OSPB) and Legislative Council Staff (LCS) economists predict a surplus in revenue, estimating approximately $1.7 billion for the current fiscal year, followed by $1.3 billion for 2024-2025 and $1.4 billion for 2025-2026. This revenue surge, primarily from income revenue, underscores the need for mechanisms to ensure proper refunds to Colorado taxpayers.

The forecast suggests that taxpayers are likely to receive refunds through increased tax returns or reduced tax bills, reflecting the state’s commitment to returning excess revenue to its residents while complying with TABOR regulations.

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Economic Factors Impacting Colorado’s Financial Landscape

The article delves into economic factors such as Denver’s higher inflation rate, an uptick in Colorado’s unemployment rate, and slightly below-average non-farm job growth, influencing the state’s financial landscape.

Despite economic challenges, the report notes positive indicators such as consumer demand surpassing expectations and an increase in disposable income. However, it highlights potential risks of a national recession due to geopolitical uncertainty and high inflation, underscoring the significance of the TABOR revenue cap in shaping Colorado’s fiscal constraints.

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