By Tim Hoover Communications Director Colorado Fiscal Institute The Weed Voting on Marijuana 2012 Amendment 64 passed Legalized recreational marijuana 15 excise tax on pot goes to BEST program ID: 1045213
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1. Weed and Fee’dA TABOR story in two partsBy Tim HooverCommunications DirectorColorado Fiscal Institute
2. The Weed
3. Voting on Marijuana 2012: Amendment 64 passedLegalized recreational marijuana15% excise tax on pot goes to BEST program2013: Prop AAAuthorized state to tax marijuana Also added an additional 10% state sales tax2015: Prop BBWill ask voters for state to keep the revenue generated from marijuana taxes
4. Three Basic Pots of Money in the State Budget$22.6 billion total budget in 2014$6.7 billion
5. Formula Based on Consumer Price IndexState: inflation + change in populationLocal 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
6. TABOR Rebates Are Upon UsFY 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
7. Revenue Subject to Cap Comes from Taxes and Cash FundsFY 2014-15General Fund: $9.8 billionCash Funds: $2.7 billion
8. BUT NONE OF THIS IS WHY WE ARE VOTING ON PROP BB
9. 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.
10. Marijuana Rebates Are Not Related to TABOR Revenue Cap Blue Book Estimate FY 2014-15Preliminary Collection FY 2014-15Total state revenue without new taxesState 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.
11. 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.
12. Voting a Third Time on Pot Taxes for SchoolsProposition BB on November 2015 ballotYes 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 usersSeptember 2015 Revenue Forecast Preliminary Collection of $66.1 million
13. The Fee’d
14. 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.
15. 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.
16. Children make up 44% of enrollment but account for only 18% of total costsElderly/Disabled make up only 13% of enrollment but account for 43% of total costsEnrollment versus cost by population
17. Income and Sales TaxFeesCash FundsGeneral FundTABOR RebatesTABOR Rebates are Paid from General Fund
18. FY15-16 HPF $806 millionRebate $0-117 million FY16-17HPF $757 millionRebate $252-$398 million FY17-18HPF $800 millionRebate $353-475 millionThe Hospital Provider Fee Causes a “Fake Surplus,” Forcing Tax Rebates From the General Fund
19. If the Hospital Provider Fee weren’t counted in the total, education and transportation wouldn’t be affected
20. The conundrumThough 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.
21. 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.
22. Deer-jà vu: Colorado enterprised the Division of Wildlife in 2001HB01- 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.
23. Kind of a no-brainerBecause 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.
24. The EndQuestions?Tim Hoover Colorado Fiscal Institutehoover@coloradofiscal.org