BLOG ARCHIVESBLOG ARCHIVES
VIEW OUR APPSVIEW OUR APPS

Colorado has the Eighth Lowest Tax Burden in the Nation for 2015

Jul 17, 2017


In Fiscal Year (FY) 2015, Colorado collected $24.6 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Colorado taxpayer can afford this level of taxation.

 

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2015

 

As shown in Chart 1, Colorado’s state and local tax burden (tax collections divided by private sector personal income) was the eighth lowest in the nation for FY 2015 at 12 percent—or -17 percent below the national average of 14.4 percent.

 

Chart 1 Colorado State and Local Tax Burden FY 2015.jpg

 

#CO #taxburden in FY 2015 was the 8th lowest in the nation at 12%— -17% below US avg http://bit.ly/2oxXkde @keypolicydata #COleg #COpolitics (click to tweet)

 

As shown in Chart 2, Colorado’s tax burden has increased over time by only 5 percent to 12 percent in FY 2015 from 11.5 percent in FY 1950.

 

Chart 2 Colorado Tax Burden by Type of Tax FY 1950 to 2015.JPG

 

#CO #taxburden has increased 5% between FY 1950 to 2015 to 12% from 11.5% http://bit.ly/2oxXkde @keypolicydata #COleg #COpolitics (click to tweet)

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2015

 

As shown in Chart 3, Colorado’s 12 percent tax burden is greater than these combined industries: manufacturing (5.9 percent), retail trade (5.1 percent), and farm earnings (0.7 percent).

 

Chart 3 Colorado State and Local Tax Burden vs. Major Industry FY 2015.JPG

 

#CO #taxburden > combined industries: manufacturing, retail, and farming http://bit.ly/2oxXkde @keypolicydata #COleg #COpolitics (click to tweet)

 

Colorado’s low state and local tax burden can, obviously, be attributed to the trail-blazing Taxpayer Bill of Rights (TABOR). A comprehensive study published by the Independence Institute showcases how TABOR has held the line against higher taxes (pdf):

 

 

“In the decade before the enactment of The Taxpayer’s Bill of Rights [1983-1992], Colorado’s population and inflation grew by a combined 50%. Yet state government revenues grew by 133%, and state government spending by 119%. In other words, government taxes and spending  were growing at over twice the rate of the population and the price level increase.”

 

“During the first decade of TABOR (“Decade-1”) [1993 – 2002], population-plus-inflation grew 71%. In this same period, government revenue rose 77%, and spending rose 85%. Thus, TABOR achieved its objective of bringing tax growth and spending growth closer in line with the economic environment. Of course TABOR allows extra taxes and spending whenever the voters consent . . .”

 

“During the second decade of TABOR (“Decade-2”) from 2003 to 2012, Colorado voters were asked to approve the largest tax increase in Colorado history, via Referendum C, a so-called “Five-year TABOR timeout.” At the same time, voters were asked to approve major new state government borrowing, in anticipation of the extra tax revenue. This was Referendum D. The voters rejected Referendum D (borrowing) and approved Referendum C (spending).”

 

“Thus, in Decade 2, population-plus inflation rose 37%, tax revenues rose 83%, and spending rose 76%. Figure 1 shows these results. According to the state’s 2014 Comprehensive Annual Financial Report, Referendum C resulted in the State gaining $3.6 billion in extra revenue during the five-year TABOR “time-out.” When that “time-out” technically ended, Referendum C reset the baseline for government revenues (the Excess State Revenue Cap) at a permanently higher level. As result, taxes were $6.2 billion higher from Fiscal Year 2010-11 through 2013-14. Thus, the state government had $9.8 billion more to spend as it chose, and taxpayers had $9.8 billion less to spend as they chose. On a per-person basis, this was a $1,909 tax increase. Or $7,637 for a family of four.”

 

“As will be detailed below, Colorado’s economy performed significantly better than the national economy during TABOR Decade-1. This was not true for the preTABOR decade, nor was it true during TABOR Decade-2, the decade of the largest tax increase in Colorado history.”

 

One can clearly see this narrative in Chart 2 as Colorado’s tax burden steeply rises in 1980’s, then falls in the 1990’s, and then steeply rises again in the 2000’s and beyond. It remains to be seen, however, if the attacks on TABOR have permanent weakened it or if TABOR will once again provide a needed brake on Colorado’s tax burden.

 

Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Colorado—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.

 

The Colorado counties with the highest local government tax burden include:

 

  • Lake County, CO (42.1 percent)
  • Rio Blanco County, CO (38.9 percent)
  • Gilpin County, CO (21.1 percent)
  • Bent County, CO (21 percent)
  • Grand County, CO (17 percent)
  • Hinsdale County, CO (16 percent)
  • Costilla County, CO (14.9 percent)
  • San Juan County, CO (12.5 percent)
  • San Miguel County, CO (12.4 percent)
  • Huerfano County, CO (12 percent)

 

The Colorado counties with the lowest local government tax burden include:

 

  • Elbert County, CO (2.8 percent)
  • Broomfield County, CO (3.2 percent)
  • Douglas County, CO (3.6 percent)
  • Jefferson County, CO (4.4 percent)
  • Crowley County, CO (4.6 percent)
  • Logan County, CO (4.8 percent)
  • Weld County, CO (4.9 percent)
  • Arapahoe County, CO (5 percent)
  • El Paso County, CO (5.1 percent)
  • Dolores County, CO (5.1 percent)

 

Chart 4 Colorado Local Tax Burden by County FY 2015.JPG

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2015

 

 

Note: In Chart 4, the following counties were excluded because their high local tax compressed the scale for the remaining counties rendering the heat map less useful: Lake and Rio Banco

 

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 65 years! See if your state has been above or below the national average?

 

 



Category: Tax Burdens

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.


blog comments powered by Disqus

Check Out Our Unique Apps:

U.S. Capitol.jpg

Government Workforce

Tax Squeeze.jpg

Tax Burden

Strings Attached to Federal Dollars.jpg

Federal Tax and Spend

Hundred Dollar Bill.jpg

Cost of Living (COLI)

Baby.JPG

Demographic

Measuring a Dollar.jpg

Federal Tax & COLI

Retired.jpg

Federal Pension

United States Office of Personnel Management Seal.jpg

Federal Payroll

Check Out All Posts For Your State:

Alabama.jpg  Alabama

Alaska.jpg  Alaska   

Arizona.jpg   Arizona 

Arkansas.jpg  Arkansas

California.jpg  California

Colorado.jpg  Colorado

Connecticut.jpg  Connecticut

 Delaware.jpg  Delaware

Florida.jpg  Florida

 Georgia.jpg  Georgia

Hawaii.jpg  Hawaii

  Idaho.jpg  Idaho

   Illinois.jpg  Illinois

   Indiana.jpg  Indiana

  Iowa.jpg  Iowa

  Kansas.jpg  Kansas

  Kentucky.jpg  Kentucky

   Louisiana.jpg  Louisiana

   Maine.jpg  Maine

  Maryland.jpg  Maryland

Massachusetts.jpg  Massachusetts

Michigan.jpg  Michigan

Minnesota.jpg  Minnesota

  Mississippi.jpg  Mississippi

Missouri.jpg  Missouri

Montana.jpg  Montana

Nebraska.jpg  Nebraska

Nevada.jpg  Nevada

New Hampshire.jpg  New Hampshire

New Jersey.jpg  New Jersey

New Mexico.jpg  New Mexico

New York.jpg  New York

North Carolina.jpg  North Carolina

North Dakota.jpg  North Dakota

Ohio.jpg  Ohio

Oklahoma.jpg  Oklahoma

Oregon.jpg  Oregon

Pennsylvania.jpg  Pennsylvania

Rhode Island.jpg  Rhode Island

South Carolina.jpg  South Carolina

South Dakota.jpg  South Dakota

Tennessee.jpg  Tennessee

Texas.jpg  Texas

Utah.jpg  Utah

Vermont.jpg  Vermont

Virginia.jpg  Virginia

Washington.jpg  Washington

West Virginia.jpg  West Virginia

Wisconsin.jpg  Wisconsin

Wyoming.jpg  Wyoming