Oct 25, 2022

An expert in policy advocacy and coalition building, Chaer has dedicated her career to helping people meet their basic needs and expanding economic opportunity. She serves on the executive committee of the All Families Deserve a Chance (AFDC) coalition. Staff page ›

Recent articles

CCLP testifies in support of Clean Slate updates

Bethany Pray, CCLP’s Chief Legal and Policy Officer, provided testimony in support of House Bill 24-1133, Criminal Record Sealing & Expungement Changes. CCLP is in support of HB24-1133, as it is one of our priority bills.

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

CCLP Opposes Proposition 121: State Income Tax Rate Reduction Grows Inequities

by | Oct 25, 2022

CCLP STRONGLY OPPOSES Proposition 121, which would permanently reduce the state income tax rate for individuals and corporations from 4.55% to 4.40%. This decrease would reduce state revenues by almost $400 million per year. If state revenues fall too far below the constitutional TABOR revenue cap, as they did after 9/11, during the 2008 Great Recession, or in the 2020 COVID pandemic, tax revenue could not be restored until and unless approved by voters, triggering catastrophic program cuts.  

Ever since the reduction in the State Income Tax rate from 5% to 4.75% in 1999, certain groups have claimed that “across-the-board income tax rate cuts benefit everyone.” This could not be further from the truth. While rate reductions are more broad-based than many targeted special interest tax breaks, those with income too low to owe income taxes see no benefit whatsoever. The federal standard deduction for a couple is $25,900; a couple earning below that amount per year would receive no tax reduction, since they have no tax liability. Likewise, for a single-filer household, those with an income under $19,400 also would not see even a penny of benefit from a reduction in the state income tax rate.

Our TABOR rebates are distributed through our income taxes for ease of administration, but they are state SALES tax refunds.  According to the 2020 Department of Revenue Tax Profile and Expenditure Report, the lowest-income Coloradans pay a larger percentage of their income in state taxes (at 6.8%) than wealthy Coloradans (at 4.1%), primarily because of our higher sales tax and flat income tax. Low-income Coloradans pay sales tax, excise tax, and — directly or indirectly through their rent — property tax. Proposition 121, however, limits the tax relief to income taxes only, disregarding the tax burden of sales tax, excise tax, and property tax.

In good economic times, Colorado would be less likely to issue TABOR rebates (or they would be significantly smaller) if this measure passes to reduce income taxes. Struggling Coloradans would likely lose some or all of the TABOR rebate they would otherwise get, since the $400 million in reduced state revenue would reduce or minimize the revenue above the TABOR cap which funds the refunds.   

Low-income Coloradans would also be disproportionately affected by cuts to state services like education, health care, and human services if this passes and revenues fall too much.

 

 

Does this measure help older Coloradans?   

  • Since Coloradans over 65 years old get extra income tax breaks already, older adults are less likely to get any additional benefit from the bill’s passage.   
  • Seniors have a higher standard deduction. For example, if a couple are both over 65, their 2022 standard deduction will be $28,700 instead of $25,900. Income below this level is too low to owe income taxes.  
  • In Colorado, beginning with the 2022 tax year, Social Security Benefits for adults ages 65 and older are not taxable on one’s state income tax. Coloradans in this age group can also subtract from their income pension and annuity income up to $24,000 if federally taxable social security is below $24,000 per year. 
  • The median household income for Coloradans ages 65 and up is $54,544. Given the existing income tax breaks older Coloradans get, a majority don’t owe state income states, so a tax rate reduction brings no benefit. 
  • Only the wealthier minority of seniors would have a state income tax liability which the bill would reduce. And like young tax filers, the wealthiest of older adults would receive the greatest benefit.  

 

This measure grants financial relief to those who need it the least. It makes permanent cuts, citing this years’ economics, neglecting to plan for needs and unexpected challenges in the years to come.  It ignores the disproportionate tax burden low-income Coloradans bear, focusing solely on income tax. This measure would grow inequities in Colorado’s tax policy, while putting at grave risk the funding for necessary programs across the state. CCLP opposes Colorado Proposition 121 and urges all Coloradans to vote NO. 

Recent articles

CCLP testifies in support of Clean Slate updates

Bethany Pray, CCLP’s Chief Legal and Policy Officer, provided testimony in support of House Bill 24-1133, Criminal Record Sealing & Expungement Changes. CCLP is in support of HB24-1133, as it is one of our priority bills.

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.