Colorado taxpayers to receive $67 million more in TABOR refunds after accounting error
State lawmakers in Colorado are trying to figure out how to close a $67 million shortfall in the budget, even as Gov. Jared Polis signs the budget bill into law.
The shortfall is the result of a big mistake by the Health Insurance Affordability Enterprise. An audit revealed the enterprise has been treating the money it receives as exempt from state revenue limits under the Taxpayer Bill of Rights or TABOR.
State Budget Director Mark Ferrandino says the law that created the enterprise wasn't clear on whether the money should count toward the TABOR limit. He says the Attorney General's Office determined last month that it does. That means the state will now owe taxpayers $67 million more in TABOR refunds than anticipated.
Republican state Sen. Barb Kirkmeyer, who sits on the Joint Budget Committee, is introducing a bill that would use money the enterprise would have received this year and next year to help cover about $33 million of the refund.
The other $34 million could be covered with the state reserve or by raising taxes on health insurance premiums. The enterprise is funded with a 2% tax that every Coloradan with a state-regulated insurance plan pays on their premium.
Republican state Sen. Jim Smallwood opposed the tax when it was created and says Coloradans shouldn't have to pay for the enterprise's mistake.
"For an administration that's prided itself on trying to do whatever we can ostensibly to lower the cost of health care and health insurance for people, raising a tax on health insurance premiums sounds ludicrous to me so I would certainly hope the governor and governor's office does not seriously consider that as an option," he said.
Smallwood says increasing the tax on insurance premiums also wouldn't generate money quickly enough to cover the shortfall.
The Health Insurance Affordability Enterprise helps fund insurance in high-cost areas of the state, health care for non-citizens, and education and outreach by the state exchange. Ferrandino says the enterprise has enough money in its reserve to continue its work.