2024 Legislative Session Recap
With the close of the 2024 Colorado legislative session, we took stock of our state’s progress on issues key to economic mobility. Taken as a whole, this legislative session brought important progress – our caring economy is stronger, our tax code is fairer, and we made historic investments in our education systems.
Yet, this progress is also precarious. Fiscal limitations in our state – largely due to TABOR – inherently create both scarcity and uncertainty. As federal COVID support comes to an end, and our state’s budget returns to the old, new, normal it’s unclear whether this progress on a multitude of fronts can be maintained.
FAIRER TAX CODE
Wins: Adding to the existing state Child Tax Credit, the Family Affordability Tax Credit gives tax credits to families with children making up to $95,000 for joint filers. Those making below $25,000 can expect $3,200 for each child under 6 and $2,400 for children ages 6-17. This important measure will benefit families throughout our state and is expected to make a sizable dent in Colorado’s child poverty rate.
HB24-1134 permanently increases the Colorado Earned Income Tax Credit (EITC). The state EITC was set to be 38 percent of the federal Earned Income Tax Credit in 2024, 25 percent of the federal credit in 2025, and 20 percent in 2026. This bill changes that to 50 percent in 2024, 35 percent in 2025, and 25 percent thereafter. Furthermore, the state EITC percentages can increase by even more, depending on the state’s revenue growth, going up to 50 percent of the federal credit in years with high adjusted growth.
Finally, long-term property tax reform has been an ongoing debate in Colorado for several years. Largely based upon the work of the Colorado Commission on Property Tax,a bipartisan bill, SB24-233, was passed this session.This measure reduces residential and commercial property taxes, while ensuring that local school funding is maintained. Importantly, thanks to the inclusion of an adjustable exemption which adds a level of progressivity to the property tax system, owners of low-and moderately-valued homes will see relatively higher property tax relief in future years.
Future Work: Overall, this session resulted in a more progressive tax code that centers Colorado families. However, a bill did pass which lowers the income tax rate when the TABOR limit is exceeded by a certain amount. The Bell Policy Center consistently points out the regressivity of across-the-board tax cuts that give significantly more benefit to the wealthiest residents of Colorado. Going forward, we will continue to educate policymakers and the public of the lost opportunities to help low- and middle-income families when the state approves tax cuts for the wealthy.
CARING ECONOMY
Wins: To strengthen the care economy, an essential but undervalued field, HB24-1312 created a $1,200 refundable tax credit for child care workers, including family, friend, and neighbor (FFN) providers, home health aides, and personal care aides. Additionally, the FY 24-25 budget included a 2 percent increase in the Medicaid reimbursement rate and an increased minimum wage for direct care workers. Additional bills were passed to support the development of child care facilities, create bilingual child care licensing resources, and make improvements to the existing Colorado Child Care Assistance Program (CCCAP.)
Future Work: While these are important steps to stabilize the care economy and increase access to child care, more holistic and comprehensive reform is needed. Though there were improvements to CCCAP, including capping copayments and paying providers based on enrollment rather than attendance, additional work remains to ensure the program is properly funded and has the capacity to meet the needs of all eligible children. Additionally, while the above-mentioned tax credit offers important relief to care workers, longer-term support that ensures a living wage is still needed to more fully and holistically support the care economy.
K-12 & HIGHER EDUCATION
Wins: In order to balance the budget during the Great Recession, the state legislature put in place the Budget Stabilization (BS) Factor. The BS Factor quantified the degree to which K-12 funding was below the constitutional formula. This year, for the first time since FY 09-10, the BS Factor has been zeroed out, ending 14 years and over $10 billion total dollars of underfunding for our state’s public education system. A combination of higher state funding and significantly increased local property tax revenue led to this historic moment.
In addition to increased K-12 funding, the legislature also increased the higher education budget by $132 million over last year’s budget. This nearly tripled Gov. Jared Polis’ budget request. The legislature’s work ensures that tuition for in-state students cannot go up by more than 3 percent, while also increasing financial aid for students by more than $25 million.
Future Work: While this year’s budget prioritized education early and often, the sustainability of this funding is of concern. For example, the State Education Fund – a pot of money meant to buffer K-12 education on rainy days – was used to support several one-time needs, like backfill for property tax relief and the Healthy School Meals program. It is incumbent on future legislatures to ensure we have enough money to maintain adequate education funding without raiding reserves or the State Education Fund.
AGING
Wins: In light of a looming funding crisis, lawmakers increased support for the state’s 16 Area Agencies on Aging (AAAs). These entities provide critical services that help older adults age in their homes and communities. Through the long bill, an additional $2 million was allocated to the AAAs. This immediate action was supplemented by SB24-040, which requires the state to review the adequacy of state funding for AAAs once every three years.
Future Work: Unfortunately, HB24-1317, which would have required the state to collect, report, and act on data for older workers and workers with disabilities, did not pass. While the legislation cleared its first committee of reference with unanimous and bi-partisan support, there simply wasn’t enough money to fund the bill. In partnership with a growing coalition of partners who recognize the imperative of supporting older workers and workers with disabilities, we’ll be back to support this important policy in the coming years.
HOUSING
Wins: To address the state’s acute housing crisis, state lawmakers passed a multitude of housing bills. This included HB24-1098, which requires cause to evict a residential tenant – a measure that will increase housing stability for renters. Several other pieces of legislation – including bills which allow for the construction of accessory dwelling units and encourage new housing development near transit – when taken as a package, can help to address the shortage of affordable housing throughout our state.
Future Work: While we continue to make progress in addressing the state’s affordable housing crisis, more intentional work is needed. Most notably, and as was discussed in a recent webinar conducted by the Bell, home ownership gaps for historically marginalized communities remain. Intentional policies that center the experiences and priorities of individuals from these communities are needed.
Where This Leaves Us
This recap shows that we did make valuable progress on important issues this legislative session. We created targeted tax credits that make our tax system fairer, provided more support to our care workers, increased funding for aging services, instituted long-term and progressive property tax reform, and made in-roads on our affordable housing crisis.
But simultaneously, we must acknowledge the ever-present challenges which prevent us from truly becoming a state capable of ensuring economic mobility for every Coloradan. This year, we didn’t have enough money to better support older workers, fully fund CCCAP, or sustainably ensure living wages for care workers. We have yet to see whether we can maintain robust funding for higher education – a pivotal gateway to the middle class.
Yes, we provided valuable tax credits to Colorado families. But this route – necessitated by TABOR – is a second-best option. Without our current funding constraints, we could more fully invest in the child care, elder care, health care, and education systems we all depend upon.
What we saw this year was a return to the old normal. With the waning of federal support, we are back to an ever-present state where critical priorities must compete with one another and something always loses.
Set against this backdrop, we’re also acutely aware of dangerous measures that may appear on this November’s ballot. As we look ahead, past this legislative session, we’ll continue working for a Colorado where we don’t have to choose between higher education and health care, child care and elder care, and where every Coloradan can realize economic mobility.
