Should voters have a say in whether Colorado’s state government can keep and spend $289.1 million in taxpayer money because of the One Big Beautiful Bill Act (OBBBA)?
House Bill 1419, titled “Refund of State Revenues,” fulfills one of Governor Polis’ primary budget requests to balance this year’s budget.
Background
Polis’ office suggests that, due to immediate reductions in state tax collections upon passage of the federal OBBBA, the state is entitled to recoup Taxpayer’s Bill of Rights (TABOR) refunds accordingly.
However, as previously explained, Legislative Council Staff believed that the request was legally dubious and could exacerbate future fiscal challenges should the governor’s office be wrong.
Regardless, four members of the Joint Budget Committee decided to pursue recouping TABOR refunds from taxpayers, and House Bill 1419 is how they plan to do it.
Assuming the governor’s suggestion is legal, the state would retain $136.1 million in overcollected revenue that would otherwise be refunded back to taxpayers under TABOR in FY2026-27 and $153 million in FY2027-28.
However, if the Polis proposal is found illegal, the state would likely be required to repay the money at 10% annual interest, as required by TABOR.
Should voters have a say?
Whether or not the mechanism is legal, some legislators believe the decision should be put before voters, as many would likely consider $289 million a substantial tax change requiring voter consent.
For that reason, Representative Christopher Richardson introduced an amendment to refer the decision to voters in the upcoming election.
If the legislature referred the question to voters and the measure passed, it could assuage concerns about legal ambiguity, since it would be a direct voter authorization to recoup the money.
Instead, the amendment lost, the bill passed the House, and it now remains under consideration in the Senate.
It’s unsurprising that the amendment failed, given that voters may be expected to weigh in on several new tax hikes in 2026, including Senate Bill 135’s referred measure, the progressive income tax, and more mill levy overrides.
Legislators likely do not want to fatigue voters with so many tax questions because they realize how bad it will make them look, given that the state budget continues to grow beyond TABOR’s intended limits while they continue to claim modest taxpayer protections prevent funding for things we need.
Legislators claim that TABOR’s spending limits are the problem, yet, as the rejection of HB-1419’s amendment shows, it’s the notion of voter consent that keeps them up at night.
Nash Herman is a fiscal policy analyst at Independence Institute, a free market think tank in Denver
