Income tax rates, meat labeling and gun control are some of 2020’s first legislative issues

The first 10 days of the 2020 legislative session, lawmakers got updates on the state agencies they oversee and a first look at the state budget.

With that over, lawmakers are now down to the business of reviewing legislation, and Sen. Jerry Sonnenberg, R-Sterling, became one of the first lawmakers to see a bill killed in committee.

It wasn’t a surprise. Sonnenberg’s SB 20 sought to reduce the state’s individual and corporate income tax rate from 4.63% to 4.49%, which he said would avoid the large Taxpayer’s Bill of Rights refunds due to go to taxpayers over the next three years.

According to estimates from state economists in December, taxpayers will receive TABOR refunds of $304 million, beginning this April. In 2021, that refund will grow to $360 million and more than $400 million in 2022.

Those refunds will be paid out through three mechanisms: first, to seniors and disabled veterans, through a property tax exemption; second, through a temporary reduction in the state’s income tax rate; and third, an income-based refund of sales tax, also paid through taxpayer filings in April.

But Sonnenberg insists it would be better to lower the income tax rate so that Coloradans can keep more of their money up front and not wait for the state to issue refunds.

That argument doesn’t work for legislative Democrats, including Sen. Mike Foote, D-Lafayette, who chairs the Senate State, Veterans and Military Affairs Committee that heard Senate Bill 20 on Jan. 22. Foote claimed the next time the state goes into a recession, a permanent lowering of the income tax rate will result in less revenue and will lead to the kind of budget crisis that forced the state to cut $1 billion from public schools a decade ago. That debt has still not been fully repaid.

The bill died on a 3-2 party-line vote, with the committee’s three Democrats voting it down.

It’s the second time Sonnenberg has tried to convince Democratic lawmakers to lower the income tax rate. He had hoped his 2019 version would win support based on backing from Gov. Jared Polis, who has said in both of his State of the State addresses that he supports a reduction in income tax rates. But on Jan. 9, Polis said he would create a task force to look into the issue instead of supporting any one proposal. The task force is charged with coming up with solutions by the end of his first term, Polis said.

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