DENVER (KDVR) – A statewide audit found a $67 million mistake in TABOR refunds. Now, the state must decide how to give millions back to taxpayers.
The statewide audit in February originally revealed the error. On April 25, the Joint Budget Committee released a memo stating that the attorney general confirmed the audit findings.
Ultimately, taxpayers are owed $33.9 million in TABOR refunds.
Why are there more TABOR refunds?
The issue comes from the Health Insurance Affordability Enterprise, a bill created in 2020 that charges tax on health insurance premiums and ultimately makes health insurance cheaper across the state.
Over the past few years, the Office of the State Controller treated the insurance premium taxes sent to the enterprise as exempt from TABOR. However, the audit and the attorney general concluded that this money was state TABOR revenue.
This decision ultimately increases the General Fund obligation for a TABOR refund — money sent to the taxpayers — and reduces the amount of General Fund available for other purposes.
Amount increase in TABOR refunds
The memo includes the projected refunds that should be sent to taxpayers in the table below:
Attributable to fiscal yearInsurance premium taxes to HIA2020-2021$9.2 million2021-2022$11.6 million2022-2023$13.1 million2023-2024$15.7 million2024-2025$17.3 millionTotal$66.9 millionCourtesy of the Joint Budget Committee
This table is based on the previous and projected refunds. For the prior years of under-refunds, that leaves $33.9 million meant for taxpayers.
Now, the state has to make a decision.
What happens next?
The state has already passed the budget for the next fiscal year, but those numbers are now off, according to the audit. This also comes right before the end of the 2024 legislative session on May 8.
The recent memo recommends a bill that includes measures to eliminate the insurance premium subsidy to the HIA beginning in fiscal year 2023-24 and temporarily reduce the General Fund reserve requirement in fiscal year 2024-25 by $31.5 million.
