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Legislative Session Sine Die

The legislative session has now ended with May 8th, 2024 marking sine die, the last day. All bills that did not make it on schedule must start the process anew next session. I hope you are able to join me at my next town hall for a post-session review, observations, and takeaways.

2024 Bills of Broad Interest

This article provides a high level synopsis of many of the bills from the past session:

https://coloradosun.com/2024/05/09/colorado-legislature-top-bills-2024/

And below are some more detailed comments from me on those of particularly broad interest to Highlands Ranch constituents:

PROPERTY TAX: In the final hours of the final day, we passed a property tax law, SB24-233. Given all the special interests, machinations, pessimism and issues surrounding this topic, it is actually a good bill. No one will be happy with it, but that is often a sign of a great compromise. It passed the Senate 33-2 and the House 57-6.

I do think my effort to push forward a proposal for a concurrent resolution, HCR24-1006, to send to the voters to cap property taxes on the last day such resolutions could be introduced did have an impact on moving forward the conversations that had stalled. The Senate President had even been quoted suggesting that nothing should be done this year. And people argued that property taxes are a local issue which county commissioners and local governments could solve and address on their own (if they wanted). That is true, but we committed to doing something at the state level to address the issue and we should follow through with our commitments to the voters. The resolution was held for several days before being introduced and when finally allowed its required committee hearing, shocked everyone when it passed out of the Finance Committee on a 6-5 vote. Many lobbyists commented to me how it was a “serious proposal”. So having a serious proposal actually introduced and moved out of committee with a favorable recommendation in the final weeks undoubtedly put some pressure upon the system to “do something”. As I told many colleagues, I wasn’t trying to be difficult or go “rogue”. But I wasn’t returning to my district without being able to point to some effort from somewhere in the legislature to address the number one issue for my district. And I would have no problem returning to my district and telling constituents that I was the only one who tried to fix the problem if they did not get something done. And something finally got done . . .

TABOR REFUND MECHANISMS: This was a long-running difficult issue involving multiple bills.

In 1992, Colorado voters amended the state constitution to include a Taxpayer Bill of Rights (TABOR). This amendment caps total state revenue growth to a formula tied to population growth and inflation. It covers ALL state revenue (income tax, sales tax, licensing fees, civil penalties, etc.). If the state wants to collect or retain additional revenue above the TABOR formula cap, the voters must approve it by referendum. If the state takes in revenue above the cap, it must refund that excess to the taxpayers. An excellent summary of the TABOR refund mechanism issues can be found in a 2018 Memorandum by nonpartisan staff. TABOR, however, does not set out how any “TABOR surplus” revenue must be refunded. This has not been an issue for the past twenty years as there were small or no surpluses. So for years, Colorado relied upon a multi-tiered “sales tax” refund to approximate what individuals likely paid in sales taxes based upon income to return any TABOR surplus. The prime reason for this, based upon an inquiry I made with nonpartisan staff, was that it would return “after tax” dollars so that the IRS would not count the refunds as taxable income for federal income tax purposes.

Over the last couple years, Colorado has had unusually large TABOR surpluses which has not happened since the internet boom of 1998-2001. In the next fiscal year, it’s projected that around $1.8B needs to be returned to taxpayers. Using the tiered sales tax refund formula would result in those in the upper income brackets receiving large refund amounts compared to lower income taxpayers. This disturbs many progressive legislators who would prefer to see the surplus go towards their preferred projects or at least be refunded to lower income individuals. Because of that desire, several bills were put forward to provide refundable tax credits to lower income groups. A tax credit that is “refundable” means that the state credits the money to you even when the credit exceeds your entire tax liability (i.e., if you owe the state $500 but have a “normal” $1000 tax credit, you simply do not owe the state anything; but if the credit is “refundable” then the state owes you $500 and pays you that additional amount).

I fully support working against regressive taxation and would continue to support efforts to lessen or eliminate the first tier of taxes and fees people pay, particularly at lower income levels. But TABOR requires a refund of excess revenue paid to the state. And “refund” necessarily implies that people should not receive more back from the TABOR surplus than they ever conceivably paid to the state. When the Family Affordability (i.e., child) tax credit, HB24-1311, was introduced this year, it took around one third of the TABOR surplus to direct it almost exclusively to those making less than $65K with children. Leaving aside how that takes away from the TABOR refunds for everyone, including fixed income seniors & the disabled, or recent college grads paying their student loans, this creates an absolute certainty that it would return to many people far more than they ever conceivably paid to the state in taxes and fees. This is particularly so when these refundable tax credits are made “stackable” so that people could receive the Earned Income Tax Credit (EITC) and other refundable credits together. I showed an example on the floor where a joint filing couple with two children earning around $60K in income before deductions and adjustments could normally expect to owe the state around $400-500 in income taxes but instead would receive back around $14,000 from the state from the child tax credit, EITC, and care worker credits. Also concerning is that we eliminated any requirement to file with a valid social security number to receive these credits, a requirement at the federal level. I introduced an amendment to the EITC to simply make it not refundable unless the taxpayer had a valid social security number (i.e., a person without a valid social security number could receive back all they paid in taxes, not more). But it was defeated. I worry that this will create a lot of resentment and backlash that people who obtain an Individual Taxpayer Identification Number (ITIN) to file their taxes as they do not have a lawful status in the state can then receive thousands of dollars in refundable tax credits beyond any money they paid to the state from the TABOR surplus. For those reasons, I took up a lonely fight in opposition to my own party against many of the dozen or so tax credits that were introduced. And in the Finance Committee, I also voted against the very slight temporary income tax reduction, SB24-228, because it was part of a back-room deal for the Governor to obtain an income tax cut of $400M from the TABOR surplus by allowing progressives to have the child tax credit of around $684M. Given that Highlands Ranch does not have a Cherry Hills or Aspen, the very slight temporary income tax cut from 4.4% to 4.25% results in very little gain for Highlands Ranch taxpayers, while giving up large amounts of what we would have received in TABOR refunds from the surplus. I voted for the income tax reduction on the floor as it was a good bill on its own stand-alone merits because the temporary reduction mirrored some of the overpayment through income taxes that has to be constitutionally refunded under TABOR. But as part of a grand bargain, it was not beneficial overall for those I represent while being constitutionally/legally suspect.

STATE ENTERPRISES: When I ran for office, many conservative constituents angrily stated that we just keep raising taxes at the Capitol. I would reply that it was impossible to do that because of Colorado’s Balanced Budget Amendment and TABOR, which does not allow the legislature to raise taxes or revenue without referring it to the voters. They’d then reply that we would just set up an enterprise that raised revenue by calling the assessments a fee rather than a tax.

TABOR allows the state to set up state owned businesses or “enterprises” that assess a fee to provide a service to users. When TABOR was enacted, there were 4 such enterprises. And over the next 25 years, the state set up an additional 14 enterprises following that basic template of a user fee for service. For example, such businesses as toll roads (pay the fee - use the road); a parking garage for the state Capitol (pay the fee - use the garage); and the State Fair (pay gate admissions/advertising fees - attend the fair). In the last few years, however, several enterprises have been created with increasingly attenuated relationships between the fee and the service provided to the payor. For example, a retail delivery fee that is used to support electrification infrastructure for electric vehicles. This year, an enterprise, SB24-184, was set up to impose a fee on rental cars to pay for mass transit projects, with the argument being it would help reduce traffic congestion benefiting the vehicle renters. And then another grand bargain behind closed doors was struck with the oil industry, SB24-230, that would impose new oil production fees that would pay for mass transit and various environmental mitigation projects through the CDW.

No matter how laudable these purposes may be, it is difficult to see what benefit or service is being provided to the payor in exchange for paying these fees. I’d support these projects, but under Colorado’s constitution if they are a tax and not a fee, it must be referred to the voters to decide, not the legislature. I took to the floor to make those arguments in more detail, in vain. Unfortunately, people seem to only want to focus on the merits or value of the policy rather than consider the broader Rule of Law issues involved with constantly trying to find ways around Colorado’s constitution and the law rather than simply following it.

Senior Housing Income Tax Credit

My senior housing income tax credit bill, HB24-1052, passed the House 61-2! And the Senate 32-3! It is now on the way to the Governor to be signed into law. I strongly leaned on the fairness argument to GOP colleagues to achieve a strong consensus across the political spectrum for this policy. We have the senior homestead tax exemption for those over 65 who owned their home for more than ten years. But for those who rent or move? NADA. I'm one of the most fiscally conservative representatives in the entire state legislature. But I will always fight to ensure laws are fair across the diverse constituency. Providing a tax break to seniors for their housing should be for ALL seniors, not just those who own their home. I’m grateful to my fellow colleagues who understood the policy and agreed with me.

Marine Corps Memorial

At the request of Representative Titone from Jefferson County, relayed through Representative Ortiz of Arapahoe County, I coordinated the entire Veterans Caucus to issue a letter of support from the caucus signed by each individual member of the state house who is a veteran to refurbish the Marine Corps Memorial in Golden. I had the honor to read the letter on behalf of the entire bipartisan Veterans’ Caucus on the House floor.

Sikh Day at the Capitol

It was a pleasure to be a part of the Sikh Day at the Capitol in April. Governor Polis proclaimed April as Sikh Awareness and Appreciation Month. Sikhs have lived in the U.S for more than 100 years, and they foster respect among all people through faith, leadership, service, and the promotion of equality of all human beings. There are an estimated 20,000 Sikhs living in Colorado. The Colorado Singh Sabha and Denver South Gurdwara provided a langar (free communal meal) at the Capitol. It was great to meet and talk to Sikh constituents at the Capitol from across the state.

AANHPI Tribute

Rep. Hamrick, Rep. Clifford, Senator Hansen and I had the honor of marking the beginning of AANHPI Heritage Month of May with a joint tribute in the Senate to recognize the vibrant and diverse South Asian community leaders in our communities.

Girl Scouts of Colorado

It is always a pleasure to host young leaders in our communities at the Capitol. I had the privilege of recognizing the Colorado Girl Scouts who earned their Gold Award on the House floor. The daughter of one of my best supporters (and biggest critics) was one award recipient. So I took the entire group under my wing and let them take the Speaker’s gavel at the dais to forcefully instruct: “To the Bill!”. And took them all out on the west chamber balcony with one of the best views in Denver. And I did not lose a single one . . . demonstrating my own scouting background . . .

Birthday Celebration

I really appreciate the staff and aides who insisted on making my birthday festive . . . but it was still a work day. I guess some at the Capitol consider me "grumpy" . . . But I’d prefer to consider it "serious" or "focused" on advocating for what’s best for the state and my district and constituents. My gratitude to all who celebrated my birthday with me.

End of Session Report

Both House Democrats and House Republicans celebrated policy wins this session. And any general spirit of bipartisanship in the Colorado Legislature is a win for all Coloradans. The Chief Clerk of the House, Robin Jones, retired at the end of this session after working in the legislature for decades with a rousing farewell/send off in the final week. During his final remarks that he was prodded into giving, he became quite emotional when emphasizing to us to always remember that you can hate a policy but still like the person who advocates for it. And he recounted a recent observation he had of two legislators who had been viciously trading barbs on social media throughout the session finally sitting down and talking to each other face to face. And when they were done talking, giving each other large hugs which Robin said warmed his heart and made his departure much more optimistic than had it occurred at the end of last session. Much of that spirit of shared camaraderie has been lost in our political culture which was present for decades while the “Greatest Generation” was in power, or the following years when politicians labored in their shadow. I frequently stress to my colleagues how blessed I am to represent a district full of rational constituents from across the political spectrum who reject extremism and rigid ideology in favor of pragmatism and fair play/dealing. I could not be the representative I am if I came from most other districts. So the most important message of my end of session report is to thank the constituents that saw fit to elect me to the legislature. I represent and reflect upon the people who sent me to the Capitol. I hope I did it well as I was proud to represent such an outstanding group of people.

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