A final 2024 letter from our Chief Executive Officer, Lydia McCoy.
Recent articles
Poverty, technology and the stories we tell
An interview with Dr. Virginia Eubanks, CAP 2024 keynote speaker
A letter from our CEO: November 2024
A letter from CCLP's CEO on the results of the 2024 elections.
CCLP Policy Forum: Tax credits & you recap
CCLP presented our fourth Policy Forum event discussing tax credits in Colorado.
Recap: Special Legislative Session 2023
In the aftermath of the 2023 November election and the failure of Proposition HH, Colorado Governor Jared Polis called a special session of the Colorado General Assembly, held from November 17 to November 20.
Over the course of a fast-paced and grueling weekend of legislation, CCLP supported four of the seven bills introduced, considering their potential to positively impact on the lives of Coloradans, their families, and their communities who live below the Colorado Self-Sufficiency Standard. CCLP Legislative Director Chaer Robert provided testimony on HB23B-1002, supporting the proposed increase in Earned Income Tax Credit. (Text of her testimony is provided below.)
Bills supported by CCLP:
- HB23B-1001 Emergency Rental Assistance Grant Program: Provides $30 million for this fiscal year (through June 30, 2024) for emergency rental assistance through the Department of Local Affairs portal and distributed to community-based organizations. Individuals must have income below 80% of Area Median Income. Half of the funding is from Colorado’s General Fund, and the other half is from the Revenue Loss Restoration Cash Fund.
- HB23B-1002 Increased Earned Income Tax Credit: Through their 2023 income tax form, those eligible for the state Earned Income Tax Credit (EITC) will receive an amount equal to half of the federal EITC, rather than 25% of the federal EITC for this year only. Working individuals earning less than about $16,000, and families with children who earn under about $50,000 may be eligible. An extra $182.5 million will go to the over 400,000 Coloradans who qualify as a separate TABOR refund mechanism this year.
- SB23B-002 Summer Electronic Benefits Transfer Program: Colorado is opting into this ongoing new federal program which will provide children who qualify for free and reduced-price lunches $40 on electronic benefits transfer card for each of the three months of summer. Colorado must pay half of the administrative costs — or about $6 million. Up to 350,000 Colorado kids will receive up to $42 million in benefits.
- SB23B-003 Identical TABOR Refund: Through their 2023 Income Tax form, all Coloradans will receive identical TABOR refunds this year, an estimated $847 for individual filers and $1,694 for joint filers for this year only. This would replace the six-tiered sales tax TABOR refund for the 2023 tax year, in which Coloradans earning under $51,000 per year would have received $586 for individuals and $1,172 for joint filers, while Coloradans earning above $309,000 per year would have received $1,834 for individuals and $3,668 for joint filers.
Overall, the special legislative session made some positive, albeit temporary, steps forward for Coloradans. Each of the bills supported by CCLP ultimately passed by the close of session on Monday and were signed into law. Though CCLP would like to see more permanent supports for renters, working families, and all Coloradans struggling to get by with Colorado’s high cost of living, the expansion of the EITC and the session’s focus on more progressive tax policy gives some hope for more permanent change in the General Assembly’s regular session in January.
CCLP testimony on HB23B-2001: Increased Earned Income Tax Credit
The following testimony was provided by Chaer Robert to the House Finance Committee in support of HB23B-1002:
I’m Chaer Robert, representing Colorado Center on Law and Policy.
Why is Colorado Center on Law and Policy such a big fan of the state EITC?
- EITC is a refundable tax credit which supplements earnings for parents of minor children making up to about $50,000 per year, and for individuals earning up to about $16,000 per year. The maximum credit, for example, for a parent with two children, is $1,541 per year. At 25% of the federal EITC goes to parents earning between about $15,000 and $20,000 per year. This bill would double that. The benefit tapers off as a family reaches $50,000 per year, so there is not a sudden drop in the benefit.
- The EITC helps families meet basic needs. Every few years, CCLP publishes the Colorado Self Sufficiency Standard. Even full-time at Colorado’s $13.68 an hour minimum wage, a parent with one preschool child earns less than one third of what it takes to meet basic needs without public or private support in metro Denver. Currently, 25% of working age households live below the self-sufficiency standard.
- The Colorado State Median Household Income from 2017-2021 was $80,000. According to the U.S. Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy (CHAS) data, renter households with incomes of 80% of Area Median Income (AMI) or less accounted for 63.7% of all renter households in Colorado in 2020; yet they accounted for 93.3% of all Colorado households spending more than 30% of their income on housing and 98.9% of Coloradans who spent more than half of their income on housing costs.
When we look at which Coloradans are spending more than half of their income on housing costs, we see from HUD Affordability data that 8.6% of households with income above 80% of AMI paid more than half of their income on housing costs. Contrast that with the 67% of renters with income below 30% of the AMI who spend more than half their income on housing costs. 32% of renters, between 30% and 50% of the AMI spend more than half of their income on their housing costs.
This is who the EITC can reach. - Even by the Department of Revenue’s own calculation in the 2022 Tax Profile & Expenditure Report (p. 200), those who earn the least pay a higher percentage of their income in state and local taxes than the highest earners.
We ask that you please support HB23B- 1002.