What the state is giving Coloradans in a tax break, they're more than taking back in fees, according to an analysis released Wednesday by the Denver-based Common Sense Institute.
Coloradans will shell out $255 million to cover fees approved by the General Assembly this year.
Granted, the business think tank points out a 0.08% reduction in the state income tax approved by voters last year under Proposition 116 will help, but not nearly enough.
“We went into the 2021 legislative session knowing there was $1.8 billion in new taxes and fees, and came out with $2.1 billion in net new costs to individuals and businesses throughout the state," said Chris Brown, the institute's vice president of research and policy.
He broke it down to a comparison: "If we were to increase our state income tax to raise an equivalent amount of revenue as we have in pending fees, it would have to increase by 1.23 percentage points or by 27% from the current 4.55% tax rate.”
Voters missed out on the chance to vote on fee increases, as they do with taxes, because fee increases for state-run enterprises are exempt from the state constitution's Taxpayer's Bill of Rights.
The legislature created six new enterprises this year, each of which is expected to collect less than $100 million in their first five years, which sidesteps the voter-approval required by Proposition 117, which voters also passed last November.
The indirect costs of new laws and regulations, however, will likely exceed the direct costs, researchers said. Though they could not yet fully quantify the numbers, the total could amount to billions of dollars.
"Though any single new regulation may not change the outcome of a firm’s decision to expand in Colorado or to relocate to our state, at some point the cumulative regulatory burden could," the Common Sense Institute cautioned in the white paper.
Read the full analysis, called "The Steep Price of the 2021 Legislative Session," by clicking here.