(May 9) – A bipartisan Joint Budget Committee bill sponsored by Rep. Millie Hamner, D-Dillon, to create better transparency around state tax expenditures passed the House on second reading this evening. Tax expenditures reduce tax revenue and include of tax deductions, exemptions, credits, or special tax rates.
“This bill creates a fair and balanced system to look at these tax expenditures on a regular basis,” said Rep. Hamner, who shares prime sponsorship of the bill with Rep. Bob Rankin, R-Carbondale. “This will create greater transparency and allow us to determine if these tax expenditures are accomplishing the intended objectives.”
Over the years, Colorado has issued numerous different tax credits, deductions and incentives for a variety of intended outcomes. All of these tax expenditures combined add up to nearly $5 billion in lost annual revenue for Colorado. However, some have been in place since as early as the 1930s and there is no regular review in place to ensure they are working as intended. Nineteen other states already conduct regular reviews of their tax expenditures.
SB16-203 directs the Office of the State Auditor to evaluate each tax expenditure every five years, including: the expenditure’s purpose and intended beneficiaries; whether the expenditure is accomplishing its goal; economic costs and benefits of the expenditure; similar expenditures in other states; and other government, nonprofit, or business programs accomplishing the goals of the expenditure.
The bill passed the Senate unanimously. The bill proceeds to a third reading by the House.