(The Center Square) – A $306.1 million provision in the Colorado budget proposal would have economic consequences beyond lost taxpayer refunds, a new analysis says.
The analysis warns of losses to the state’s gross domestic product and jobs.
House Bill 26-1410, also known as the Long Bill, details the state’s $46.8 billion budget for fiscal year 2026-27 and is making its way through the House after passing the Senate last week. The General Assembly’s Joint Budget Committee was scheduled to discuss the Long Bill on Thursday.
State lawmakers have had to make cuts to spending to deal with a $1.5 billion deficit.
The budget bill includes a provision from the governor’s office to retain $306.1 million total from the next two budgets, money that would otherwise be refunded to taxpayers under the state’s Taxpayer’s Bill of Rights.
According to the analysis from the Common Sense Institute, a free-enterprise think tank based in Greenwood Village in the Denver area, retaining $306.1 million rather than issuing a TABOR refund could cause a minimum gross domestic product loss of $1.6 million and a maximum of $35.8 million between 2027 and 2031.
The think tank also estimates it could cause between 483 jobs lost and 44 jobs gained, and $7.4 million to $64.8 million in lost economic output.
“Colorado taxpayers are very involved in this,” Erik Gamm, CSI’s senior research analyst who authored the report, told The Center Square, answering questions by email.
“For the sake of some temporary control over its own cost overruns, the state would seize $306.1 million in refunds without giving voters any say in the matter, eliminating taxpayers’ agency to decide, whether by paying living expenses, donating to charity, or growing their own wealth, how best to allocate money that would normally be theirs by law,” he said.
Under TABOR, the state must issue refunds to taxpayers when revenue collections exceed the TABOR cap.
A spokesperson for Gov. Jared Polis’s office said in email to The Center Square that H.R. 1, also known as the One Big Beautiful Bill Act that was signed into law by President Donald Trump in July, is to blame for wiping out TABOR refunds.
“The Governor always fights to make sure that each and every dollar eligible for being refunded under TABOR is refunded,” Deputy Press Secretary Ally Sullivan said. “This year for the taxes just filed by Coloradans, residents can expect a refund between $19 to $118 depending on income.”
“H.R.1 retroactively impacted revenue in FY 24-25, and that is reflected in the TABOR surplus calculations,” she said. “The truth is that H.R. 1, supported by Republicans including [U.S. Rep.] Gabe Evans, completely wiped out what would have been a healthy refund to taxpayers of up to hundreds of dollars next year.”
“The Governor looks forward to signing a balanced budget that reduces wasteful spending while increasing Medicaid spending, protects important investments in education, and enhances public safety,” Sullivan added.
According to the CSI report, CSI uses REMI Tax-PI modeling, with “two scenarios to outline a range of possible impacts: a high-benefit scenario, in which increased state spending generates direct investment in jobs and employee compensation, and a low-benefit scenario, whereby new state spending serves priorities that are less economically fecund.”
“In both scenarios, the boost to government spending in 2027 results in temporary economic benefits — between 795 and 1,994 jobs and up to $250 million in GDP, depending on the state’s use of resources,” the report said. “When the first year of lost refunds hits taxpayers’ earnings in 2028, however, the benefit diminishes under the first scenario and reverses under the second.”
