DENVER – Facing two tax rebates required by law, Gov. John Hickenlooper on Monday presented his proposal for next year’s state budget.
A rosier September economic forecast by state economists and a provision of the constitutional Taxpayer’s Bill of Rights, or TABOR, means taxpayers will divvy up a total a rebate of $167.2 million.
The two rebates would come from $30.5 million – thanks to new marijuana taxes – and $136.6 million from revenue above a statutory spending cap in fiscal year 2015-16.
The rebates would be sent to taxpayers when they file their 2016 taxes.
The marijuana tax rebate is especially unique, as state officials point out no system is in place for how to send the rebate to voters. Lawmakers will have to tackle that issue in the legislative session that begins in January.
Voters in 2013 approved Proposition AA, which authorized a 25 percent total tax on marijuana sales. The purpose was to fund regulatory enforcement and education.
But because total state revenue is higher than projected in the election guide sent to voters in 2013, the state must refund the money being collected.
Another option is to go back to voters and ask that they allow the state to keep the revenue. The same could be done for the revenue above the statutory spending cap.
The governor’s office was careful not to endorse any such scenario.
“Since there’s no law for how to return that, we are budgeting as if there is a liability to make that rebate,” Henry Sobanet, the governor’s budget director, explained to reporters at a budget briefing Monday afternoon.
It may seem odd that the governor’s office presented a budget proposal just hours before the fate of his administration is determined. If Hickenlooper does not win re-election today and Republican challenger Bob Beauprez is elected, Beauprez would have a chance to amend Hickenlooper’s budget.
State law requires the budget be presented Nov. 1. But because that fell over a weekend, the governor’s office presented it Monday.
Another uncommon aspect of the proposed budget deals with a state law that requires transfers to the state’ highway fund. The law requires transfers following a year in which personal income grows by more than 5 percent. The budget allocates $102.6 million under the formula.
“Colorado’s economic activity continues to outperform the national expansion,” Hickenlooper said in a statement because he did not attend the briefing Monday. “Total employment and personal income have steadily increased for several years running.”
The governor – who has made the rebounding economy a cornerstone of his campaign – pointed to the state’s 4.7 percent unemployment rate.
“Looking ahead, the most likely scenario is for the momentum to continue at a steady pace,” Hickenlooper said.
Overall, the 2015-16 budget calls for an increase of 7 percent to $26.8 billion in spending, including $10.3 billion in the general fund that is decided by the Legislature.
The governor’s budget also proposes:
An additional $480.3 million for K-12 education, an 8.1 percent increase, including a one-time $200 million surge from the State Education Fund.
A spike of $107.1 million for higher education, or 14.1 percent more.
Nearly $73 million for state employee health insurance and pay increases, about 3.7 percent and 4.7 percent, respectively.
pmarcus@durangoherald.com
