The Sum & Substance reports that Colorado lawmakers’ plan to sell future tax credits to plug budget holes has not worked as smoothly as sponsors hoped. Last year, legislators authorized the sale of up to $250 million in future tax credits to generate $200 million for the general fund and the Health Insurance Affordability Enterprise. Sponsors pitched it as clever budget management. Reality, rude as ever, showed up without an appointment.
According to the article, the Colorado Treasurer’s office has raised about $150 million through tax-credit sales, but not enough to cover the hole legislators needed to fill. So Democrats passed House Bill 1346 to let the state sell unsold credits to a third-party broker, which could then sit on them and resell them later. In plain English: Colorado is now pawning future revenue to cover today’s spending. Blimpy would be proud.
The Bullet Point Brief
- Colorado lawmakers authorized selling future tax credits to generate cash now. That is not “innovative budgeting.” That is putting state government on layaway and calling it fiscal leadership.
- The original plan was to sell up to $250 million in future credits to raise $200 million. They have raised about $150 million so far, which means the grand genius plan developed a limp somewhere between the press conference and the math.
- Only two of Colorado’s 10 largest for-profit insurers bought the credits, according to Rep. Steven Woodrow. Apparently, businesses were not thrilled about paying millions today for tax benefits years down the road. Strange how people who understand balance sheets noticed the smell.
- HB 1346 would let a third-party broker buy the credits and resell them later to insurers. So now we have government, tax credits, a budget hole, a middleman, and future liability. If this were any more of a shell game, it would come with a folding table on Colfax.
- Republicans called the whole thing predictable and “bananas,” arguing the state flooded the market with credits while limiting buyers. That is not supply-side economics. That is supply-side clown college.
My Bottom Line
This is such a shell game.
Colorado has become the Blimpy of states: “I’ll gladly give you tax credits Tuesday for some cash today.” Except this is not a cartoon hamburger. This is the state budget. This is health care funding. This is future revenue. This is real money being shuffled around so the ruling class can avoid admitting they spent too much, promised too much, and budgeted like the bill would never come due.
This is the game Democrats play when their spending habits crash into arithmetic. They do not slow down. They do not prioritize. They do not say no. They invent a new mechanism, slap a responsible-sounding title on it, and hope nobody notices the three-card monte routine happening under the gold dome.
Call it what it is: borrowing against tomorrow to cover political decisions made yesterday. It is damn near a Ponzi scheme, except in Colorado the ruling elite Democrats have the audacity to call it governance. It is not. Governance is making hard choices. This is kicking the can, selling the can, securitizing the can, and then asking a broker to remarket the can at a better rate.
Families do not get to run their budgets this way. Small businesses do not get to run their books this way. County governments sure as hell do not get to run this way. But the state legislature? Apparently they get to create a fiscal escape room and congratulate themselves for finding the trap door. Colorado deserves better than budget magic tricks performed by people who cannot admit they are bad with money.
Source: The Sum & Substance
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