Colorado's penny-wise pound foolish philosophy (Denver, Fort Carson: how much, college, income)

[esya]

This is just a heads up for folks considering moving here. Colorado generally does not collect enough in taxes to maximize the return of federal income tax dollars paid by people in the state, to the state. We often do not qualify for federal matching programs that we've already paid for. Call it independence if you want--I call it penny wise and pound foolish. That means, although taxes are low, we generally subsidize better programs for people in other states and you pay money for services being delivered elsewhere in the US. We do not make up for this with well funded state programs.

Just one example is education--read the news. Another example is funding for adults with disabilities. See for example the info available on the Denver Options website that clearly states that adults with disabilities have to suffer through a long waiting list for services. Just saying. I've been here 39 years and I'm just giving notice of something people rarely talk about. The data is available if you are interested. If not, don't be surprised when you get here. It's longstanding practice and I doubt, based on my 39 years here, if it is likely to change.

It's one thing to not want to have federal taxes increased. It's another to send federal taxes out of state by stubborness.

[Mike from back east]

First, some facts.

The Tax Foundation says that Colorado is 41st in how many Federal dollars it gets back for every dollar sent to the IRS. Thus, for every $1.00 sent to DC, Colorado gets back 81-cents. These are stats from 2005. With the major expansion of Fort Carson, that 81-cents may have gone up a cent or two by now. Without the huge military presence in COLO SPGS, we might only be getting 70-cents on the dollar.

I note too that ALL major farm states, from ND straight down to TX, plus IA, AR, MS, MO are ahead of Colorado, most likely the influence of farm subsidies. Only two states with sizable farming operations that fall below Colorado on the list are IL and CA.

We can draw what we want from that set of stats. Now, back to Colorado.

It's not just that we send Federal tax dollars to other states, but we are cutting ourselves short in other areas due to the anti-tax outlook of a lot of people here in Colorado. The issue of the 2008 Ballot Initiative on the Severance Tax (ST) is a case in point that I like to highlight. The ST is applied to whatever amounts of oil and gas are pumped out of the ground here in Colorado. The level of ST in Colorado is about half of what is charged in the neighboring states of NM and WY. Thus, oil companies have an incentive to pump us dry first before pumping from other states where the ST is higher.

During the 2008 elections, there was a ballot item in Colorado to raise the ST to more closely align with the ST in NM and WY; in essence leveling the playing field. Well, "the industry" mounted the usual campaign of scare tactics, complete with the customary TV ad of a harried housewife standing in a filling station pumping gas into her car and bemoaning how she's going to be able to make ends meet if the ST ballot item passed. Break my heart; a penny or two a gallon, big whoop. Of course, the anti-tax forces NEVER quantified just how much an increased ST would add to a gallon of gasoline or a thousand/cubic feet of natural gas; I suspect it was trivial, but hey, there's nothing like fear and loathing to kill a good idea.

What few people realize is that a LOT of the oil and gas that are pumped out of the earth here in Colorado is shipped off to other states, especially prodigious amounts of natural gas. It is consumers in OTHER states who would've been paying a tad more for natural gas, NOT the people in Colorado. Sure, there is SOME of that gas used by Colorado consumers, and our prices may have gone up a tad, but OUR state would've collected the ST on the gas that goes east to IL and OH. The oil/gas companies pay the ST to Colorado, then the oil/gas companies raise their prices and collect the amount of the ST from their customers, no matter WHICH state those customers are in. My point is that for every $1 we Coloradans would've paid in increased costs for natural gas due to an increased ST, our state would've been collecting $2 or $3, thus we'd be leveraging ourselves, getting $2-3 into the state treasury for every $1 we Coloradans paid in. To me, that's a screaming bargain. But since the increased ST got voted down, there was no increased money into the state treasury and people here will see further degradation to their infrastructure and see THEIR kids pay more for college. Talk about penny wise and pound foolish.

[CAVA1990]

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