Attention: This is not a current document. It is an excerpt from the Web page of the former Colorado governor, Roy Romer. It is displayed by the Colorado State Archives for its historical value.
June 1, 1998
The Honorable Colorado
House of Representatives
Sixty-first General Assembly
Second Regular Session
Denver, CO 80203
Ladies and Gentlemen:
I am returning to the Secretary of State House Bill 98-1228, "Concerning a Temporary Tax Rate Reduction for the purpose of Refunding State Revenues in Excess of the Limitation on State Fiscal Year Spending for any Given Fiscal Year," which I vetoed today at 1:18 P.M. . This letter sets forth my reasoning for vetoing the bill.
H.B. 1228 proposes to refund revenues collected in excess of TABOR limits by directing the Department of Revenue to lower the state income tax rate.
As I stated many times during the legislative session, I do not believe that the refund mechanism outlined in this bill is fair or broad-based enough. I have four main objections.
First, state income taxes make up less than half of the revenues the state collects. Revenues come from a variety of sources, including income taxes, sales taxes, gas taxes, college tuition, and fishing and hunting licenses, to name a few. We must take that into account as we determine a refund method; H.B. 1228 ignores those other revenue sources.
Second, making income tax liability the sole determinant of refund eligibility ignores the fact that nearly 600,000 Coloradans - mostly senior citizens, students, and working families - pay sales taxes, gas taxes, car registration fees, and other taxes and fees, but do not have state income tax liability. Because they contribute to our economy and pay taxes, they, too, should get some refund.
Third, an income tax refund would mean that many taxpayers who itemize their deductions would have to pay federal income tax on the refund.
Fourth, an income tax rate cut benefits out of state and part-year residents and corporations.
Determining a fair refund mechanism for the surpluses anticipated over the next five years was one of the most important tasks the General Assembly needed to accomplish during this session. It did not, and so I will call a special session of the legislature for later this summer to resolve this issue.
I believe that the method we developed last fall in another special session was a good solution: Those who paid got something back; it was simple and easy to administer; and it avoided any federal tax questions. But while I believe that a similar method makes sense, I have all along indicated my willingness to consider other approaches.
The people of Colorado want us to resolve this issue, but H.B. 1228 was not the right approach. I believe that we can find a good solution if we all approach the upcoming special session in a spirit of cooperation, compromise, and problem-solving.
Last modified June 18, 2003