This column appeared originally in the Denver Post on February 2, 2018.
President Donald Trump and the Republican Congress just gave us a large tax cut. But Colorado’s Republican-controlled state Senate had already taken it away.
To comprehend how that’s possible, we need to understand the largest betrayal of Republican values in Colorado political history: the tax-hiking, debt-raising, TABOR-busting Senate Bill 267, sponsored by Republican state Sen. Jerry Sonnenberg and enabled by the schizophrenic leadership of Senate President Kevin Grantham.
The beauty of our Taxpayer’s Bill of Rights is that taxes and debt can grow as high as any communist would like, all you have to do is ask the voters first. But elected officials, doing their best Bernie Madoff, don’t want to ask for consent when they know the answer is going to be “no.” They re-label taxes as “fees” and debt as “certificates of participation,” so the Colorado Supreme Court lets them take our money without our voter consent.
In 2009, without asking, the state forced an extra tax on us when we’re sick and have to go to the hospital. In their best George Orwell, the legislature named this tax “The Hospital Provider Fee,” as if hospitals, not patients, pay it. The new “fee” generated more than $650 million in 2016, pushing Colorado’s revenue over its TABOR cap.
See, TABOR also limits the state budget’s growth to population growth and inflation. But, all the government has to do to keep anything in excess of that is, well, just ask us first (see
Madoff comment above.)
The state was going to hit its budget limit, triggering either a refund back to us taxpayers, or an act of respect, asking voters for consent to keep our cash.
But, led by Sonnenberg, the legislature put the hospital “fee” into a different state-run checking account, thus technically, and laughably, “out” of the state budget. Not only did this mean we won’t get our excess revenue refunds now, it means the state budget now has lots of room to balloon before they’d ever have to write a refund check to we urchin taxpayers.
By contrast, Republicans in D.C. were acting like Republicans and actually reducing our tax load. But by an odd twist of accounting, the Trump cuts means Colorado, on the state level, will be taking even more of our money.
Colorado income taxes are based off of federal income tax forms. You take your “Federal Taxable Income” off your federal tax form (line 43 on your IRS 1040 form) to calculate your Colorado taxes. Under the Trump tax cuts, the calculation of your “Federal Taxable Income” goes up. Don’t worry, since tax rates go down, you still save a lot of money on Federal taxes.
But this does mean almost all of us will see a (Trump voice) HUGE increase in their Colorado state income taxes. The state’s non-partisan legislative council thinks in a few years Coloradans will be paying close to an extra $900 million more to the state. That’s $160 per man woman and child, $640 per family of four.
If Sonnenberg and Grantham didn’t collude with Democrats to pass their original massive tax grab, SB 276, which freed up the room in the state budget to absorb all this extra cash from the Trump tax cut, it would have just been refunded to us via the Taxpayer’s Bill of Rights. No fuss, no muss.
But their betrayal will now cost you a substantial state income tax increase on your federal tax decrease. Well done boys!
In a childish demonstration of atonement Sonnenberg and Grantham have introduced a bill to lower the state income tax rate to mitigate their double-taxation mess. But they’re about to realize that while 100 percent of the Democrats were willing to collude with them to raise taxes without a vote of the people, those same Democrats, who control the state house, won’t reciprocate to lower this tax bonanza.
Many of the Republicans who voted for this costly grand betrayal are, of course, seeking higher office. Sonnenberg wants to become Senate president. Owen Hill is running for U.S. Congress, Polly Lawrence for state treasurer, and Dan Thurlow for state Senate. They might all succeed given that voters won’t feel the cost of their spineless perfidy until they’re paying their taxes in April 2019, after the midterm elections.
Who thought D.C. Republicans would care more about Colorado taxpayers than so many Colorado Republicans.
Jon Caldara, a Denver Post columnist, is president of the Independence Institute, a libertarian-conservative think tank in Denver.