weed and fee’d a tabor story in two parts by tim hoover communications director colorado fiscal...
TRANSCRIPT
Weed and Fee’d
A TABOR story in two parts
By Tim HooverCommunications DirectorColorado Fiscal Institute
The Weed
Voting on Marijuana
• 2012: Amendment 64 passed• Legalized recreational marijuana• 15% excise tax on pot goes to BEST program
• 2013: Prop AA• Authorized state to tax marijuana • Also added an additional 10% state sales tax
• 2015: Prop BB• Will ask voters for state to keep the revenue generated
from marijuana taxes
Three Basic Pots of Money in the State Budget
$22.6 billion total budget in 2014
38%
30%
32%
General Fund
Cash Funds
Federal Funds$7.2 billion
$8.7 billion
$6.7 billion
Formula Based on Consumer Price Index
• State: inflation + change in population• Local District: inflation + annual local growth*• Property Tax: inflation + annual local growth*
*Net Percentage change in actual value of all real property in a district from construction co taxable real property improvements, minus destruction of similar improvements and additions to, minus deletions from, taxable real property
TABOR Rebates Are Upon Us
FY 2013-2014 FY 2014-2015 FY 2015-2016 FY 2016-2017 $10,500
$11,000
$11,500
$12,000
$12,500
$13,000
$13,500
$14,000
Total TABOR Revenue Legislative Council Total TABOR Revenue OSPB TABOR limit/Ref C Cap Legislative Council TABOR limit/Ref C Cap OSPB
FY 2015-16OSPB: $116.7 million
above capLeg. Council: $50.3 million
below cap
FY 2016-17OSPB: $398 million
above capLeg. Council: $252.5 million above cap
FY 2014-15OSPB: $150 million above
capLeg. Council: $153.6
million above cap
September 2015 Revenue Forecasts
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Cash Funds General Fund The Cap Time Out Cap
Revenue Subject to Cap Comes from Taxes and Cash Funds FY 2014-15
General Fund: $9.8 billionCash Funds: $2.7 billion
BUT NONE OF THIS IS WHY WE ARE VOTING
ON PROP BB
ELECTION PROVISIONS: Sec (3)
Blue Book must tell voters how much the proposed tax will raise and how much money the state will have in TOTAL revenue if the tax DOES NOT pass.
If either Blue Book estimate is too low, the difference must be rebated to taxpayers, up to an amount not to exceed total collections from the new tax.
Marijuana Rebates Are Not Related to
TABOR Revenue Cap Blue Book Estimate FY 2014-15
Preliminary Collection FY 2014-15
Total state revenue without new taxes
State revenue from new tax
$12,080 $12,504
$67 $66.1
(dollar figures in millions)
Marijuana rebate not because taxes on marijuana yielded more than expected, but because total taxes/fees came in higher than expected.
How Much Money is Involved?
Because the estimate of how much the state would have to spend was low by $424 million, the entire $66.1 million in pot taxes must be refunded unless voters pass Prop BB allowing the state to retain the money.
Voting a Third Time on Pot Taxes for Schools
Proposition BB on November 2015 ballot
Yes Vote$40 million to schools (BEST)$12 million to enforcement, education/prevent, substance abuse treatment$14.1 million (not allocated and available for future appropriation)
No Vote$25 million gets returned to taxpayers ($7.80 each)$24 million gets refunded directly to marijuana growers$17.1 million gets refunded directly to marijuana users
September 2015 Revenue Forecast Preliminary Collection of $66.1 million
The Fee’d
What is the Hospital Provider Fee?• Adopted by the Legislature in 2009. Assesses fees on hospitals and
uses revenue to draw down federal matching funds for Medicaid expansion.
• Adopted when the state was not in a TABOR rebate situation.
• Estimated to increase TABOR revenue by $665 million in FY 15-16.
Why’d we pass it?
• Increased access to health care for 382,000 of Colorado’s most vulnerable citizens by financing insurance coverage.
• The HPF reduces health care costs for all Coloradans by raising Medicaid reimbursement rates to 80 percent of what it costs to provide care, allowing hospitals to pass savings on to businesses, insurers, and consumers.
Children make up 44% of enrollment but account for only 18% of total costs
Elderly/Disabled make up only 13% of enrollment but account for 43% of total costs
Enrollment versus cost by population
Income and
Sales Tax
Fees
Cash Funds
General Fund
TABOR Rebates
TABOR Rebates are Paid from General Fund
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Hospital Provider Fee Cash Fund Fees (without HPF) General Fund
Cap Timeout Cap
FY15-16 HPF $806 millionRebate $0-117 million
FY16-17HPF $757 millionRebate $252-$398 million
FY17-18HPF $800 millionRebate $353-475 million
The Hospital Provider Fee Causes a “Fake Surplus,” Forcing Tax Rebates From the General Fund
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
0
2000
4000
6000
8000
10000
12000
14000
16000
Hospital Provider Fee Cash Fund Fees (without HPF) Taxes
Cap Timeout Cap
If the Hospital Provider Fee weren’t counted in the total, education and transportation wouldn’t be affected
The conundrum• Though the HPF is not collected in the
General Fund it counts toward the revenue limit.
• These funds are earmarked for health care and cannot go to pay rebates.
• Without a change, rebates that result because of the hospital provider fee will be paid at the expense of our roads, schools, and other items supported by the General Fund.
What is a TABOR Enterprise?
Colorado ConstitutionArticle X, Section 20(d) "Enterprise" means a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined.
Deer-jà vu: Colorado enterprised the Division of Wildlife in 2001• HB01- 1012, sponsored by Rep. Joe
Stengel, R-Littleton.
• Prompted by chronic wasting disease, like “mad cow” for deer and elk.
• Legislature still approves budget and any fees.
Kind of a no-brainer• Because the HPF fees were endorsed by the
payers (hospitals) and because they are earmarked for health care only, enterprise designation is both logical and appropriate.
• Enterprising does not expand the HPF or Medicaid eligibility.
• It should have been done in 2009, but the state was so far below the TABOR limit there was no sense of urgency.
