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Senate approves bill reclassifying certain state revenue, prompting TABOR debate
Summary
Senate Bill 42, which narrows how some state receipts are classified for TABOR purposes, passed the Colorado Senate April 21 after opponents warned it could reduce TABOR refunds by tens of millions and after multiple failed amendments to refer the change to voters or narrow the definitions.
The Colorado Senate on April 21 approved Senate Bill 42, a bill that reclassifies certain state revenue streams for the purpose of calculating state fiscal-year spending under Article X, Section 20 (TABOR).
Senator Weisman, presenting the committee report, said the bill corrects an omission and clarifies how certain collections are treated for TABOR accounting. Supporters said the change will "save us room under the TABOR cap to do the things that the people of Colorado have asked us to do," according to remarks on the floor.
The chamber—s minority leader warned the reclassification could substantially change TABOR refund calculations. Floor debate highlighted a fiscal-note estimate discussed in committee: sponsors and critics disputed whether the change would reduce refunds by about $30 million or as much as $61 million in FY27, depending on the treatment of sales and use tax on fuel.
Several amendments were offered. One amendment to require voter approval before adopting the reclassification was defeated; other amendments to narrow the definition of "damage awards" were also defeated after committee negotiation. Supporters said the finalized bill limited the reclassification to a narrow set of items (victim compensation portions and certain monetary fines by current committee action).
The Senate adopted SB42 as amended; the transcript records the adoption on the floor. Sponsors said the bill aligns statutory accounting with long-standing TABOR definitions, while opponents characterized the move as a substantive policy change that should have greater voter scrutiny.
What's next: SB42 was ordered engrossed and placed on the calendar for final passage and enrollment. The fiscal effects identified on the floor suggest monitoring of TABOR refund calculations in subsequent fiscal estimates and the governor—s office.
