TABOR audit finds Colorado owes taxpayers an extra $34M, threatening to upend state budget

The state government owes Colorado taxpayers an extra $34 million in refunds it should have sent out years ago, legislative budget staff told lawmakers Friday, blowing a hole in the state's budget with just days left in the 2024 legislative session.

The error was first uncovered by a state audit released in February. State officials had planned to come up with a solution by June, but after conferring with the Colorado Attorney General's Office, Joint Budget Committee staff members say the matter can't wait until after the session.

"We really don't have any choice," JBC Director Craig Harper told the budget writing committee Friday. "That's an under-refund from prior years and will need to be refunded at the earliest available opportunity."

The problem dates back to a 2020 law, Senate Bill 215, which created the Health Insurance Affordability Enterprise and charged a new fee on health insurance premiums. The fee pays for a state reinsurance program and provides subsidies to reduce the cost of health insurance across the state.

The fee generates over $100 million annually and is exempt from the state revenue cap under the Taxpayer's Bill of Rights.

Here's the problem: The enterprise also gets money from the state general fund, through a longstanding tax on insurance premiums. The government can't just move tax dollars from the general fund to an enterprise and call it a TABOR-exempt fee, according to the state auditor. But that's exactly what the state comptroller has been doing since the program was created.

(TABOR generally limits state revenue to the combined rate of inflation and population growth each year. Anything beyond that limit has to be refunded to taxpayers the following year.)

Gov. Jared Polis on Monday signed the state budget bill for next fiscal year, which starts July 1. But factor in the unpaid TABOR refunds that would have to go out in early 2025, and the spending plan is already out of balance.

That leaves lawmakers until the start of next week to come up with a plan to refund the money and rebalance the budget. It takes a minimum of three days to pass legislation, and the legislative session ends May 8.

"The timing on this is really unfortunate," Harper said Friday.

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LAWMAKERS HAVE FEW OPTIONS

In a memo to lawmakers, JBC staff recommended two courses of action.

One, dip into the rainy day fund to pay for the TABOR refunds — a move that would require legislation to temporarily reduce the reserve below what's required by state law, 15% of general fund spending.

Two, amend the budget for the current year and next year to stop sending insurance premium taxes to the enterprise. That would cover the cost of $33 million in additional TABOR refunds expected over the next two years. It would also buy time for the administration to figure out how to pay for the program in the future. Mark Ferrandino, Polis' budget director, told the JBC that one option is to raise the health insurance fee, which is exempt from TABOR.

The JBC on Friday agreed to draft a bill preventing the future transfers. But the Democratic majority remains uneasy about tapping the general fund reserves. And at least one Republican on the six-member panel doesn't want to, either.

Sen. Barbara Kirkmeyer, a Brighton Republican, said she was criticized by Democrats during the November special session for proposing that the state dip into the rainy day fund to pay for property tax relief.

"I was told I was being fiscally irresponsible, so God forbid I should do that again," Kirkmeyer said at Friday's meeting.

If lawmakers won't look to the reserves — which they are already doing as they consider how to make property tax cuts and still fully fund schools and reimburse local governments — Harper said they have few options, none of them appealing.

They can cut spending from a budget that's already been signed into law. Or they can cut the money lawmakers have available to pay for the dozens of pieces of legislation still pending at the statehouse — a list that includes major Democratic priorities such as housing.

A meeting to discuss the bill draft and next steps was canceled after floor work in the House ran late into Monday afternoon.

DO THE MATH

363

The number of bills that remained pending in the legislature as of Monday morning.

------------

The remaining measures were split about evenly between the House and Senate, though the House had far more measures remaining that originated in the chamber, meaning they still had to be sent to the Senate and go through debate there.

There had been 693 bills introduced in the legislature as of Monday morning. A few more are still expected before the General Assembly wraps up its work May 8.

WHAT TO WATCH THIS WEEK

* House Bill 1292, which would ban the purchase, sale and transfer of a broad swath of semiautomatic firearms, is expected to get a hearing this week in the Senate State, Veterans and Military Affairs Committee. The date of the hearing hasn't been scheduled yet, said Sen. James Coleman, a Denver Democrat who chairs the panel. He said he's waiting for the OK from Sen. Julie Gonzales, another Denver Democrat who is the main sponsor of the legislation in the chamber.

* The Northglenn City Council will meet at 6 p.m. Wednesday to consider a resolution advancing an ethics complaint against state Sen. Faith Winter to the Colorado Senate. The complaint is regarding her behavior during an April 3 community meeting in Northglenn during which Winter, a Broomfield Democrat, appeared to be intoxicated. A day later, she announced that she was seeking medical treatment for alcoholism. "Sen. Winter's conduct as the elected representative of the city constituents undermined the integrity of her office as a senator representing the constituents of the city, and demonstrated an inability to perform her legislative duties in a manner that promotes public confidence," the resolution says.

* The Jefferson County Republican Party is hosting "An Evening with Gov. Kristi Noem" on Saturday. The event runs from 5 p.m. to 10 p.m. Get details and RSVP at https://jeffcorepublicans.com/calendar.

COLORADO POLITICS: Northglenn City Council to consider ethics complaint against Sen. Faith Winter

9NEWS: Politician in the papers for killing her puppy coming to Colorado

THE BIG STORY

Catching up with Diana DeGette on the election, her career plans and some of her policy priorities

U.S. Rep. Diana DeGette, a Denver Democrat and the longest-serving member of Colorado's congressional delegation, last week caught The Unaffiliated up with her views on the 2024 election, policy priorities and plans for the future.

DeGette said that based on polling she's seen, abortion will be a deciding issue in November and play a bigger role than the Israel-Hamas war.

"I think the number of people for whom the Middle East conflict is a top issue is actually very, very small," she said. "In most congressional districts — I would say the 3rd and in the 8th, but also anywhere else — the top issues are still the economy, jobs, health care, but then the abortion issue. It's sort of like a litmus test for a lot of voters — in particular younger women and suburban voters."

She's bullish about her party's ability to take back the House. "I think it's kind of a common belief in Washington right now that the Democrats are going to take the majority back" in the House, she said.

And DeGette thinks it's possible that Democrats keep their majority in the Senate, too.

"It's certainly a lot tougher, but I think it could happen," she said. "I've been looking at some of the data from some of the key races— from the Ohio race, Arizona. It's this abortion issue. The voters feel so strongly that this is sort of a threshold issue."

MIKE JOHNSON

As DeGette and the rest of the U.S. House return to work in Washington this week, they'll be faced with the prospect of an effort to oust House Speaker Mike Johnson launched by Republican U.S. Rep. Marjorie Taylor Greene of Georgia.

DeGette said she hasn't made up her mind on how she would vote if a so-called motion to vacate Johnson is brought to the floor.

"I'm going to have to see what happens," she said. "On the one hand, I think that this one vote thing is very destructive toward the stability of Congress. On the other hand, the only reason Speaker Johnson did the right thing with Ukraine is because he was under a lot of pressure to do it."

She added: "There are very few views that he has that I agree with. He is an extremist on women's health care issues and on family issues. And so I would have to think long and hard about (voting to keep him)."

More broadly, DeGette said it's a difficult time to be a Republican in Congress. She said a group of 20 to 40 "MAGA" Republicans — including U.S. Rep. Lauren Boebert —are holding the GOP caucus hostage.

"Their party now is just completely broken," DeGette said. "It's very rough right now. It's frustrating for everybody."

ON HOW LONG SHE PLANS TO SERVE

There has long been speculation about when DeGette, first elected in 1996 and running in November for her 15th term, may retire, opening up her reliably Democratic 1st Congressional District seat. Many of her Colorado contemporaries — Ed Perlmutter, Ken Buck and Doug Lamborn —are leaving or have left Congress.

"I'm going to be there as long as I feel like I'm doing a good job for my constituents and making progress," DeGette, who is 66, told The Unaffiliated. "I'm passing bills in the minority. I feel like I'm still really having an impact."

DeGette said she doesn't plan to run again to be the Democratic whip because she's decided she can be more effective as a "free agent."

She hopes to either be the chair or the ranking member of the House Committee on Energy and Commerce Subcommittee on Health.

"That'll be a big deal," she said.

If Democrats do secure control of Congress, DeGette said she will push forward her legislation to codify Roe v. Wade into law.

DEGETTE'S POLICY PRIORITIES

Despite the dysfunction in the House, DeGette is hopeful about the chances in the Senate for several of her bills that passed the House in March:

* A measure to improve employment practices and training at the Nuclear Regulatory Commission

* A bill she cosponsored with a Texas Republican to improve coverage of preventive health measures, such as smoking cessation

* Reauthorization of federal efforts to prevent deaths of women during childbirth, especially for women of color

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THE POLITICAL TICKER

ELECTIONS

The Kent Thiry-backed group seeking to overhaul Colorado's election system has settled on trying to make the following changes: making Colorado's primaries open, with candidates from all parties running against each other, after which the top four vote-getters advance to a ranked choice general election. The group, Colorado Voters First, also wants to do away with legislative vacancy committees and replace them with vacancy committees. Curtis Hubbard, a spokesperson for the organization, said it will make a final determination soon on which of its measures approved by the Title Board it will move forward with to begin collecting voter signatures to get them on the November ballot.

4TH CONGRESSIONAL DISTRICT

Former state Sen. Jerry Sonnenberg this week was endorsed by former University of Colorado President Bruce Benson in his bid to represent the 4th Congressional District. Benson, in a written statement, called Sonnenberg, a Republican, "an effective, strong, conservative leader who will get things done for Colorado families in Washington."

JUNE 25 PRIMARY BALLOT IS SET

The Colorado Secretary of State's Office finalized the June 25 primary ballot Friday. The Sun created searchable, sortable lists of congressional candidates and legislative candidates. Four candidates are thus far running unopposed for the state House: Majority Leader Monica Duran, D-Wheat Ridge; Reps. Manny Rutinel, D-Commerce City, and Matt Soper, R-Delta; and Carlos Barron, a Fort Lupton Republican running to represent House District 48.

FORMER CSU FOOTBALL PLAYER NAMED WHCA PRESIDENT

A former defensive lineman on the Colorado State University football team,was named president of the White House Correspondents Association on Saturday. Eugene Daniels covers the White House for Politico, where he works alongside former Fox31 political reporter Eli Stokols.

2025 LEGISLATIVE SESSION

The Executive Committee of Legislative Council voted Friday to start Colorado's 2025 legislative session Jan. 8.

READ MORE

* Colorado legislature's property tax plan is in 11th-hour limbo after state commission balks at draft proposal

— The Colorado Sun

* Colorado governor, Democrats reach long-term air quality and transit deal with oil and gas industry, environmentalists

— The Colorado Sun

* Lawmakers scale back legislation to limit local control over renewable energy projects

— Colorado Public Radio

* Gov. Polis pushes to exempt big beer from proposed state alcohol fee

— KUNC

* Federal judge orders John Eastman to explain why he should remain attorney on Colorado case

— Colorado Politics

* Lawmakers light up state agencies opposed to paying for weight loss drugs

— CBS Colorado

= source has article meter or paywall

THE BIGGER PICTURE

* Phil Lyman beats Gov. Spencer Cox at Utah GOP convention. Both advance to primary

— Deseret News

* Mississippi Senate agrees to a new school funding formula, sending plan to the governor

— The Associated Press

* Texas Republicans have tried to rein in property taxes for five years. Has it worked?

— The Texas Tribune

* Inside the long-odds push to undo an abortion ban in ruby red Arkansas

— The Washington Post

= source has article meter or paywall

Corrections & Clarifications

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