With a discussion raging over whether balancing the state budget should involve paying new taxes, two Democratic lawmakers hope to focus part of the debate on paying existing ones.
Sen. Pat Steadman and Rep. Mark Ferrandino, both of Denver, filed a bill Wednesday that would offer an amnesty to individuals and businesses that owe back taxes.
The state has done it before. In 2003, a tax-amnesty bill under then-Gov. Bill Owens, a Republican, was expected to generate between $3 million and $5 million but garnered more than $20 million for the state.
This time, Steadman and Ferrandino hope they can bring in between $5 million and $15 million to help balance the state budget, which is facing at least a $1.1 billion shortfall in the 2011-12 fiscal year, which begins July 1.
“Now is the right time to bring this program back,” Steadman said. “In the face of unprecedented cuts to public education, we need to look at every possible efficiency and we need to make every effort to help our schools and provide taxpayers with a transparent and accountable government.”
The proposal could help stave off part of Democratic Gov. John Hickenlooper’s proposed $332 million net reduction to K-12 schools and his proposed $36 million cut in state support for higher education, the pair said. Democrats are still looking at other budget-cut proposals in lieu of such deep trims to education programs.
The bill “is a way to help both individuals and businesses, in a time where they’re struggling, to allow them to pay their taxes owed,” said Ferrandino, a member of the legislature’s Joint Budget Committee.
Under Senate Bill 184, a 60-day tax-amnesty period would exist in August and September of this year in which anyone who owed taxes prior to 2011 — but whom the department hasn’t already identified as delinquent on his taxes — would be able to pay his taxes with all penalties waived and with only half the interest assessed.
That wouldn’t apply to thousands of taxpayers who have already been declared delinquent, which means the state has attempted to collect from them previously. The state estimates delinquent taxpayers, a list that includes businesses and individuals, owe approximately $100 million.
Ferrandino said the measure is patterned after the 2003 bill, but that he and Steadman would be open to expanding it to include delinquent payers.
Another portion of the bill would require the state to issue detailed reports on all “tax expenditures,” which include tax credits and exemptions. The reports wouldn’t identify individual taxpayers but would disclose the amounts of the expenditures and whether they were made on behalf of businesses or individuals.
That portion of the bill is essentially the language from another piece of legislation Ferrandino sponsored this year that already failed in the Republican-led House. Democrats control the Senate, so Steadman’s bill stands a good chance of passing that chamber.
Republican lawmakers also said they were still looking at the proposal and had no immediate reaction.
“I think anything that saves the state money is a great conversation to have,” said Rep. Cheri Gerou, R-Evergreen, also a member of the Joint Budget Committee. “I’ll have to read it tonight and see what it does.”
Hickenlooper was traveling Wednesday and could not be reached for comment. His spokesman, Eric Brown, said the office would look over the bill.
“We haven’t had an opportunity to review the proposal and look forward to discussing it with the two legislators,” Brown said.
The bill was filed the same day that the state’s Title Setting Review Board approved six tax-raising initiatives that are being pushed by a liberal group. The Colorado Center on Law and Policy offered six versions of ballot measures to see which, if not all, would be approved under the state’s single-subject requirement.
If one of the measures made it on the ballot and voters said yes, the income-tax increases proposed by the group would raise about $1.5 billion.
Meanwhile, Sen. Rollie Heath, D-Boulder, on Monday unveiled his proposed citizen initiative to raise sales and income taxes to generate about $1.63 billion.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
