Gov. Jared Polis wants the Colorado Legislature to eliminate the business personal property tax, stop taxing Social Security benefits and provide a $600 tax credit for every child in the state.
Lawmakers from both sides of the political aisle applauded those proposals during the Democratic governor’s third State of the State speech to a joint session of the Legislature on Wednesday, but that didn’t stop some from questioning just how Colorado would pay for it.
“Well, he hit every talking point in an hour, but no mention of how we pay for it all,” said Sen. Ray Scott, R-Grand Junction. “Apparently, he plans on using up the purported $5 billion coming from Washington.”
While Polis didn’t mention that possible money that Scott was referring to in his speech, which could be Colorado’s portion of a $1.9 trillion COVID relief bill being debated in Congress, the governor did allude to his $1.4 billion plan to help the state boost the economy, money that comes from budget cuts lawmakers made last session.
In an interview with The Daily Sentinel afterwards, Polis said none of his proposals are tied to any money Congress might send Colorado’s way, saying that after serving in Congress for 10 years he’s learned never to count on anything from Washington until it happens.
His proposal, which also includes tucking away another $1.4 billion in the state’s rainy-day fund, calls for spending millions on shovel-ready transportation, broadband and other infrastructure projects, providing tax breaks for businesses and families, and restoring cuts made to K-12 education.
“We will invest in our rural communities, continue bringing broadband to every corner of our state so that students and small business owners from Fort Morgan to Fruita can seize opportunities,” Polis said in his address. “These shovel-ready projects are tried and true measures to boost the economy in tough times, creating good jobs for hardworking Coloradans, while improving the quality of life for all of us.”
On the tax measures, Polis said it’s all part of his campaign promise to revamp the states tax policies so it doesn’t just benefit the few.
And because of the pandemic and what it did to the state and nation’s economy, making good on that promise is more needed than ever, he said.
“As Coloradans face tough times, we need to help folks get back on their feet and make life more affordable in our state, from job training to more affordable housing to reducing the tax burden on middle-class families,” Polis said. “From the start of my administration, we have worked together to make Colorado’s tax code more fair by getting rid of special interest tax breaks that benefit the few, and using those savings to lower taxes for the use of us.”
Tony Gagliardi, director of the Colorado chapter of the National Federation of Independent Business, praised the governor for that, saying not only would it not be a devastating loss in tax revenues, but would remove unnecessary paperwork for small businesses.
“For too long, this has been a highly annoying and needless paperwork heartache for small business owners,” Gagliardi said. “I don’t think local governments are going to suffer because of the income they’ll lose over some restauranteur’s no longer needing to calculate the depreciation on his 10-year-old potato peeler.”
In the post-speech interview, Polis said that when voters repealed the Gallagher property tax law in Amendment B last fall, the loss in revenue from also eliminating the business tax won’t hurt local governments — the state doesn’t collect that tax — which is the main reason why the Legislature has repeatedly failed in numerous earlier attempts to do away with it.
“Gallagher opened the door on repealing the business personal property tax,” he said. “And it’s not just the tax itself, it’s the onerous paperwork and the difficulty for small businesses in pain that they shouldn’t have to deal with.”
An elimination of taxes on Social Security also won’t cost the state much. Colorado is only one of 13 states that taxes Social Security benefits, but only on a portion of it. By law, Colorado exempts the first $24,000 in benefits from private, government and military retirement plans.
In his speech, Polis reiterated his desire to make the state’s electrical supply 100% renewable by 2040, saying that the bulk of the state’s utilities are on track to reduce greenhouse gas emissions by at least 80% by 2030.
“Colorado is a national leader in green energy jobs, the fastest growing job sector, precisely because we have embraced renewable energy,” the governor said.
That stance, however, continues to draw criticism from GOP lawmakers, including Scott.
“His continued aggression against fossil fuels points to more heartache for families across Colorado and a denial of the facts of what unreliable energy did to Texas just this week,” Scott said.
On health care, the governor said his office would continue to work on ways to reduce costs, saying he hopes the Legislature will make progress on reducing the cost of prescription drugs and add an public option to the state’s health care exchange.
Sen. Kerry Donovan, a Vail Democrat whose district includes Delta County, said she’ll be on that public option bill, which isn’t expected to be introduced until sometime next month, adding it’s possible that option won’t be needed.
The entire concept is designed to force health care providers to lower costs through competition, but just the idea of proposing an inexpensive public option health insurance plan for people to purchase could end up accomplishing the same goal, Donovan said.
“We’re responding to some of the feedback we heard last year of the industry saying that they would like an opportunity to lower costs themselves, and so we are giving the industry a chance to bring down the cost of health care,” Donovan said. “If they are unable to bring the cost of health care down, then we will make sure a Colorado option becomes available for people.”