Tax cuts have reduced Colorado General Fund revenue over time
By any measure, Colorado’s General Fund revenue has failed to keep pace with the state’s growth in the past three decades. While Colorado’s population and economic output have grown steadily since 1982, revenue from the sales and income taxes has sputtered.
An analysis of the state’s revenue trends shows that the dwindling power of state tax revenue follows the passage of the Taxpayer’s Bill of Rights, a series of tax cuts at the turn of the century, and to some extent, economic recessions. As a result, the General Fund –– Colorado’s main source of revenue for schools, colleges and health care –– has hit historic lows in recent years.
Budget year 2009-10 represents the lowest point in three decades for Colorado’s General Fund. Even with a slight rebound the following year, General Fund revenue has reached historic lows by any measure, whether it is economic output, a percentage of income, or per capita when adjusted for inflation.