A few months after Republicans burned down a special session called by Democratic Gov. John Hickenlooper, the GOP lawmakers appear ready to do the right thing.
Itap not too little too late, but it raises serious questions about what the heck happened last fall when 100 lawmakers from across the state were called back to Denver for three days of unexpected work to fix a mistake that was costing nine special taxing districts about $9 million a year. Instead of fixing the problem, Republicans in a committee voted to kill the bill and everyone went home in two days with nothing to show for their time or the taxpayer money that was spent opening the state Capitol.
Trying to understand Republican rationale for refusing to pass a bill in October but apparently being hunky-dory OK with it in January is a bit like beating your head against the Gold Dome. But just for fun, letap go ahead and suffer some brain damage.
The first inkling of opposition to Hickenlooper’s proposed fix came from Americans for Prosperity, which said adamantly that the proposed legislation would violate the Taxpayer’s Bill of Rights because it amounted to a tax increase without a vote of the people. The second round of opposition came from Republican lawmakers who said Hickenlooper had called the special session without getting adequate buy-in or consulting with enough GOP leaders. Let’s go ahead and concede the latter point to Republicans: the governor clearly could have done a better job on the front end of his failed special session. But that’s not a good reason not to get the work done. That’s playing politics.
Technically, as I said in a column at the time, AFP was right that the language of TABOR prohibits any change to tax policy that results in a tax increase. However, the Colorado Supreme Court mercifully did some legal wrangling on this very question in 2009 and ruled that the state could adjust tax exemptions as needed without voter approval. The ramifications of rendering state government unable to ever adjust tax exemptions, deductions and credits without going to voters would be staggering. But if Republicans really wanted to hold that line, it’d at least be an understandable position to take, albeit a very hard one to maintain.
Fast-forward to January, and we learn from Denver Post reporter John Frank that lawmakers are hopeful a bill will pass this session. , which was introduced by Rep. KC Becker, a Democrat, and Sen. Bob Gardner, a Republican, would allow these districts, including the Regional Transportation District and the Scientific and Cultural Facilities District, to levy their sales taxes on marijuana sales once again.
“We have a new solution,” said Senate Majority Leader Chris Holbert, R-Parker, to Frank. “Itap a different concept, and I think that you’ll see that it will have significantly more support than what we saw in the special session.”
It’s not really a different concept, though, at least not one that gets Republicans out of the constitutional corner they’ve backed themselves into.
SB 88 says districts that levied a special sales tax on marijuana sales prior to July 1, 2017, could continue to do so, despite the fact that marijuana sales were exempted from the general 2.9 percent state sales tax in a bill in 2017. Under state law, things that are exempt from state sales tax — food from a grocery store is the big one — cannot be taxed by special sales taxes either. So when lawmakers exempted marijuana from the statewide sales tax, it rendered special districts unable to collect their taxes, too.
That proposed change in tax policy — allowing special districts to tax something that law otherwise exempted — is the same net increase on tax revenue being collected as the fix proposed during the special session, which would have reinstated the state sales tax on marijuana.
Call it what you will, but I call that a change to tax policy resulting in an increase in tax revenue.
I don’t mean to disparage the bill — it’s actually a good fix for an inadvertent revenue outcome for important voter approved special districts. But these political games are wearisome and deserving of scrutiny.
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