Legislators debate unexpected windfall in income tax revenues

    Everyone at the Capitol is wrangling over what to do with an unexpected windfall in state income tax revenues.
    That includes Senate President Pro tem Jerry Sonnenberg of Sterling, who has teamed up with Senate President Kevin Grantham of Cañon City on a bill to reduce the state’s income tax rate, which Sonnenberg said will return those extra dollars to Colorado taxpayers.
    Under Senate Bill 18-061, both the individual and corporate state income tax rate would drop from 4.63 percent to 4.43 percent. The bill would also reduce the alternative minimum tax by two-tenths of one percent, beginning Jan. 1, 2019.
    The windfall is the result of the federal Tax Cut and Jobs Act, signed into law by President Trump in December. According to state economists, the law will result in about a $200 million bump in individual income tax revenue to the state for 2018, but estimates run as high as $1 billion in future years.
    Gov. John Hickenlooper responded to the windfall by directing $148.2 million of $200 million surplus for transportation, part of a revised budget request for 2018-19.
    Lawmakers also seek an increase in the state’s general fund reserve, to protect the state against recessions or other “rainy day” needs.
 

The full article is available in our e-Edition. Click here to subscribe.