Although Gov. Jared Polis favors an income tax rate reduction — as he mentioned in his State of the State address Jan. 10 — Democrats on the Senate Finance Committee aren’t singing his song.
On Jan. 17, Polis, under his personal Twitter account, thanked the Republican sponsors of a bill that sought to lower the individual and corporate income tax rate from 4.63 percent to 4.49 percent.
“Thank you, @JerrySonnenberg and @RepRodPelton, for offering tax relief for ALL Coloradans. I look forward to working with you to achieve even lower rate than 4.49%, coming up w/agreeable ways to reduce tax expenditures to ensure revenue neutrality,” Polis tweeted.
But Polis didn’t extend that support at the hearing Tuesday on Senate Bill 55, sponsored by Sen. Jerry Sonnenberg, R-Sterling, and Rep. Rod Pelton, R-Cheyenne Wells. No one showed up to testify in favor of it. The Senate Finance Committee voted along party lines to kill Sonnenberg’s bill.
The bill would have cost the state $280 million in fiscal 2019-20, which opponents said would result in cuts to education when the next recession hits.
Sonnenberg told the committee that the state has a $1.6 billion surplus, on top of a $1 billion surplus from fiscal 2018-19. His bill would shave off just under $300 million from that surplus, he said.
SB 55 is Sonnenberg’s second attempt at an income tax-rate cut in as many years.
Sen. Lois Court, committee chairwoman, told him they would never see eye to eye on a tax cut, and she hinted at part of Polis’ tweet from Jan. 17: that a tax cut had to be revenue neutral.
People who make more than $1 million a year would get an average cut of about $1,200, but those with lower incomes would see only a few dollars under the cut, said Chris Stiffler, an economist with the Colorado Fiscal Institute. And 1 in 4 Coloradans has no tax liability after deductions and other credits, so the bill wouldn’t help them, he said.
Rich Jones of the Bell Policy Center said a permanent reduction would hinder the state’s ability to pay for education, affordable housing and child care.
While a dozen bills that propose tax credits are still alive in the 2019 session, no other measures seek to reduce the state’s income tax rate.
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