Gov. Jared Polis addresses the crowd before signing a new child tax credit bill into law as graduating preschoolers play at Denver KinderCare in Denver on Friday, May 31, 2024. to the state surplus to flatten inequalities. Lawmakers passed dozens of new tax credits this year that tapped into massive revenues the state couldn’t keep and otherwise would have to return through refund checks.
The child tax credit stacks atop others passed or expanded by the legislature this year, including an increase to the state’s match of the Earned Income Tax Credit. In all, the new policies tap billions of dollars from projected TABOR surpluses in coming years that would have to be returned to taxpayers one way or another.
The credits depend on consistent TABOR surpluses and will be scaled down in less robust economic times. Caroline Nutter, the legislative coordinator for the think tank, estimates the credit changes will reduce the number of children in poverty — about 133,000 kids — by 40% in years when the credits are fully funded.
Traditionally, state revenue that’s over the cap would be returned to Coloradans largely through a six-tier system that gave higher-income households a bigger share under the idea they paid more in taxes. Nutter called that approach “wasteful” because it directs money to people who already have the most resources.
Lang Sias, a former state representative and now a research fellow at the think tank, said the legislature “has effectively substituted its judgment on how those tax dollars should be spent over that of taxpayers who would otherwise see the refunds.”Colorado officials react to Donald Trump’s conviction, from saying he “lacks moral capacity” to criticizing “scam trial”