Tax credits and exemptions are once again garnering attention at the capitol with a measure still being drafted, that would give more tools to future lawmakers when they are considering tax policy. Opponents say it could be a trojan horse, possibly eliminating all of Colorado’s tax exemptions over time, and that the “tools” may not be constitutional.
The measure proposed by Democratic House Majority Leader, Paul Weismann of Lousiville, would direct the General Assembly’s Legislative Council to prepare a report that reviews each tax exemption and credit at prescribed intervals. The reports would then be provided to the legislature for their consideration.
“Dynamic analysis” is at the heart of the measure, which is a process that takes into account the effect of the exemption or credit on the budget and the economy. Rep. Kent Lambert, R-Colorado Springs, said dynamic analysis has been bandied about over the years, but he questions the notion of singling out tax credits and exemptions as the sole barometer of decisions regarding tax policy.
“To say we’re going to apply this concept just to tax credits and exemptions — the only action that can possibly be taken is we’re going to eliminate the tax credit or exemption,” said Lambert. “That’s the only actionable thing.”
Lambert further asserts that the impetus for the measure may be just a political maneuver.
“It’s only going after tax credits and exemptions that were put there for a particular reason,” said Lambert. “I think it’s become a political analysis and not an objective economic analysis.”
Weismann was not immediately available for comment.
While there is not yet a determination on the cost of the proposal, Lambert speculates that to develop this new capability would probably require increases in staff and budget. However, he believes that regardless of the cost the proposal may not pass constitutional muster.
“This whole thing is built on what we think is an illegal notion, and a faulty notion that denies the clear text of the constitution,” said Lambert.