DENVER – It’s Christmas in May for some Coloradans, as the Legislature is poised to approve tens of millions of dollars worth of tax benefits in the last days of its yearly session.
Want to launch a rocket into space? Take a sales-tax exemption.
Do you run a data storage center? Here’s another sales-tax exemption.
Buying a natural gas-powered truck? Write it off on your income taxes.
Rehabilitating a historic landmark? Have a tax deduction.
State legislators will end their session Wednesday, and there’s no better proof that they have enjoyed the best budget in years than the number of tax benefits they are doling out.
To be sure, the Legislature has opened the state’s wallet to much bigger items that benefit a much larger group of Coloradans – most notably a $450 million increase in public school funding and an extra $100 million in college scholarships and operating funds.
But legislators and their critics alike say the number of special tax credits this year are higher than usual. The Colorado Fiscal Institute, a left-leaning group, has counted more than two dozen tax benefit bills, some of which were defeated.
Altogether, the bills still alive would cost $39 million next year and $60 million the year after, according to the group’s analysis.
The biggest price tags are on a tax credit for low-income workers to offset their child care bills and a benefit for small businesses that pay the business personal property tax.
“When we have money coming out of a recession, this is one good way to make sure we’re creating jobs or we’re creating economic equity in the system so that everybody benefits from the recovery,” said House Majority Leader Dickey Lee Hullinghorst, D-Boulder.
The tax credits have been popular with legislators and lobbyists, with the only consistent opposition coming from an odd couple of groups that hardly ever agree – the Colorado Fiscal Institute on the left and the Colorado Union of Taxpayers on the right.
Carol Hedges, head of the Colorado Fiscal Institute, calls it the Oprah session, because the Legislature is giving out tax credits the same way the famous talk show host gives away cars to her audience members.
“It’s a tax credit for you. It’s a tax credit for you,” Hedges said. “The big difference is when Oprah gives something away, it’s her money.”
A tax credit actually is an expense because it takes money away from the state and requires either higher taxes or lower services for everyone else, she said.
“We worry that it undermines the general principle that we’re all in this together,” Hedges said.
Gregory Golyansky, president of the Colorado Union of Taxpayers, expressed a similar sentiment.
“We are no longer Americans. We have less and less in common. Every little group is trying to get its little cut, with the rest of us holding the bag,” Golyansky said.
He called the practice “crony capitalism” and thinks it’s a payback for corporate campaign contributions to majority Democrats and the RINOs – “Republicans in Name Only” – who vote for the tax bills.
Hullinghorst defended the Legislature’s work on taxes and pointed out that lawmakers wrote most of the bills so the credits expire in around five years, unless a future Legislature decides they are worthwhile and re-enacts them.
Early this year, the Legislature passed a law to make sure the Department of Revenue publishes a report every two years detailing all the tax benefits the state gives away.
