HB 1203 Fails to Advance Out of Committee
On a 6-3 vote, HB 1203—which would have taken away $1.15 billion from the General Fund next year—failed to advance out of the House State, Veterans, and Military Affairs Committee yesterday.
The Bell's Rich Jones and CFI's Carol Hedges both testified in opposition to the bill, which would have necessitated deeply damaging cuts to schools, higher education, housing, health care, and other vital areas of public investment. No witnesses testified in support of the legislation.
"Public investments play a vital role in building and maintaining infrastructure, educating residents, and reducing the costs of services that help put opportunities for economic mobility within the reach of more families," Jones stated. "The drastic cuts in revenue projected under HB18-1203 will make it even more difficult to help families get ahead."
"It is dangerous, magical thinking to believe that slashing public investments will be offset by each taxpayer paying a little less in taxes," Hedges said. "Each Coloradan paying slightly less in taxes simply cannot supplant the toll of closing hospitals or colleges or prisons – as this bill would necessitate."
During ensuing discussion, some committee members misstated the effect of state income tax cuts on economic and job growth.
However, a recent Center on Budget and Policy Priorities brief shows that the benefits that were promised have not materialized among five states that have pursued cuts to state income tax rates:
"All five states have seen slower growth in private-sector gross domestic product than the United States as a whole since their tax cuts took effect. And four of the five states...have seen slower private-sector job growth than the United States over the same period."
Additionally, a study from the Institute on Taxation and Economic Policy, concluded that "states with the highest top tax rates are experiencing more favorable economic conditions than the states without income taxes." The study includes ample evidence that cutting or abandoning state income taxes does not lead to clear improvement for a state's economy and job prospects.
Protecting and maintaining the Colorado way of life depends on vital public investments. And continued to efforts to dig away at those public investments make it harder for Colorado families to succeed and earn a good life.