{"id":39274,"date":"2022-07-25T19:48:00","date_gmt":"2022-07-26T01:48:00","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/heidi-ganahl-wants-to-eliminate-colorados-income-tax\/"},"modified":"2026-03-31T02:48:55","modified_gmt":"2026-03-31T08:48:55","slug":"heidi-ganahl-wants-to-eliminate-colorados-income-tax","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/heidi-ganahl-wants-to-eliminate-colorados-income-tax\/","title":{"rendered":"Heidi Ganahl wants to eliminate Colorado\u2019s income tax"},"content":{"rendered":"\n

\"Heidi
Heidi Ganahl announces her run for governor on Sept. 14 at Rosie\u2019s Diner in Monument. Ganahl, an entrepreneur, author and member of the University of Colorado\u2019s Board of Regents, is the only remaining Republican elected statewide in Colorado. (Olivia Sun\/The Colorado Sun file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Heidi Ganahl, the Republican gubernatorial nominee, is campaigning on a bold promise to eliminate Colorado\u2019s 4.55% individual income tax, the largest source of revenue for the state\u2019s general fund, during her first four-year term.<\/p>\n

\u201cI will take us to zero income tax,\u201d she told Republican voters during a candidate forum in April.<\/p>\n

But Ganahl, a University of Colorado regent and the only remaining Republican in statewide elected office, hasn\u2019t explained how she plans to eliminate Colorado\u2019s income tax without dramatically affecting the state\u2019s budget, nearly one-third of which is made up of income tax dollars.<\/p>\n

Ganahl would either have to slash programs and services to make up for the lost revenue \u2013 likely including education funding \u2013 or find billions of dollars elsewhere by trying to raise other taxes or enacting new fees.<\/p>\n

\u201cIt\u2019s doable,\u201d she said in an interview last month without offering detailed plans on how she would do it. \u201cIt\u2019s not going to happen overnight.\u201d<\/p>\n

Republicans have been slowly chipping away at Colorado\u2019s income tax rate for years. The latest effort is a question on the November ballot that would reduce the rate to 4.4%. But conservatives have mostly avoided calls to eliminate the income tax, which has been around since 1937, because no one has presented a feasible way to do it.<\/p>\n

\u201cPhilosophically, I agree,\u201d said state Sen. Bob Rankin, a Carbondale Republican and the senior GOP member of the Legislature\u2019s Joint Budget Committee, which writes the state budget. \u201cHow we get there would take some work.\u201d<\/p>\n

Ganahl\u2019s Democratic opponent in November, Gov. Jared Polis, is also a proponent of eliminating Colorado\u2019s income tax, but only if it\u2019s eliminated in a revenue-neutral way. He has said he wants to raise taxes on other things \u2013 such as pollution \u2013 to make up the difference.<\/p>\n

\"Gov.
Gov. Jared Polis supports ending Colorado\u2019s income tax, but only if it\u2019s done in a revenue-neutral way. (David Zalubowski\/Associated Press file)<\/span>David Zalubowski<\/span><\/figcaption><\/figure>\n<\/p>

And unlike Ganahl, Polis has not made eliminating Colorado\u2019s income tax a cornerstone of his policy platform.<\/p>\n

\u201cWe can find another way to generate revenue that doesn\u2019t discourage productivity and growth,\u201d he said at a conservative conference last year.<\/p>\n

Polis also appears to be in favor of the measure on November\u2019s ballot seeking to reduce the income tax rate. \u201cI\u2019m generally supportive of those kinds of measures,\u201d he told The Sun earlier this year.<\/p>\n

In the 2020-21 fiscal year, the state\u2019s individual income tax revenue was about $9.5 billion, accounting for more than 60% of total general fund revenue. The overall state budget that year, which also includes billions in federal dollars, was about $32 billion.<\/p>\n

By comparison, sales tax revenue in the 2020-21 fiscal year, the second largest source of general fund money, was about $3.4 billion. The state sales tax rate is 2.9%.<\/p>\n

In the 2021-22 fiscal year, which ended June 30, individual income tax revenue is expected to total $11.5 billion. In this fiscal year, which began July 1, Colorado\u2019s individual income tax revenue is forecast to be about $11.6 billion.<\/p>\n

Ganahl said her campaign plans to lay out the specifics of her proposal, a major part of her economic platform and her overall pitch to voters, later this summer. (\u201cWe have a policy team working on it,\u201d Lexi Swearingen, Ganahl\u2019s spokeswoman, said earlier this month.)<\/p>\n

\u201cI\u2019m working with some experts on that,\u201d Ganahl said of her income tax plan. \u201cI don\u2019t want to get ahead of us. But I wouldn\u2019t be putting this big, bold pledge out there if I didn\u2019t think we could get it done.\u201d<\/p>\n

Ganahl has also said she plans to cut Colorado\u2019s 22-cent-per-gallon gas tax, which is one of the lowest state gas taxes in the nation, in half, which would sharply lower the funds available for the Colorado Department of Transportation<\/p>\n

There are already plenty of skeptics.<\/p>\n

First off, Ganahl couldn\u2019t unilaterally eliminate Colorado\u2019s income tax. She would likely need the help of the Legislature, and would almost certainly need the Legislature to be controlled by Republicans. The GOP hasn\u2019t held a majority in both the House and Senate at the same time in well over a decade, and while the party is primed to make gains in the Senate this year and could even take control of the chamber, it\u2019s improbable that they win a majority in the House.<\/p>\n

Secondly, Ganahl would have to find a way to eliminate the income tax without breaking state government.<\/p>\n

Michael Fields, a conservative fiscal policy activist who has been pushing for incremental income tax rate cuts, said it wouldn\u2019t be feasible to eliminate the state\u2019s income tax without some serious planning.<\/p>\n

\u201cYou would definitely have to fill in a lot of that revenue with some other source,\u201d he said.<\/p>\n

Democrats in the Legislature and liberal fiscal policy groups are almost uniformly against the idea.<\/p>\n

\u201cIt\u2019s red meat for the base,\u201d said Scott Wasserman, who leads the liberal-leaning Bell Policy Center, \u201cbut as with a lot of the things I see coming out of her campaign it\u2019s not grounded in governing.\u201d<\/p>\n

Proposing cuts to the budget is fair game, he said, but Ganahl needs to explain which cuts she would make or where she would find revenue to backfill what\u2019s lost.<\/p>\n

\u201cObviously, that would have an impact on people,\u201d he said. \u201cIt\u2019s gotta be an informed conversation.\u201d<\/p>\n

The income tax rate Colordans paid used to be based on their earnings. People with higher incomes paid more while people with lower incomes paid less until 1987, when a flat, 5% rate was enacted. The rate was reduced by the Legislature about 20 years ago and then again by voters in 2020.<\/p>\n

State Sen. Chris Hansen, a Denver Democrat who is slated to be the next chairman of the JBC, said Ganahl should explain to voters how she would fund schools if she cuts the income tax.<\/p>\n

\u201cIt would completely gut the ability of the state to deliver education and other services,\u201d he said. \u201cIt\u2019s just a bit nonsensical to say \u2018we\u2019re going to cut the income tax\u2019 without a plausible plan to replace that revenue.\u201d<\/p>\n

Ganahl has provided some general ideas about how to remove Colorado\u2019s income tax: find waste in the budget (she hasn\u2019t said where there are billions in waste now, though she has complained about the budget\u2019s size) and bring new businesses to Colorado to create more jobs and increase existing state revenue streams by improving the economy.<\/p>\n

In Kansas, then-Gov. Sam Brownback, a Republican, cut income taxes in 2012 with the intention of boosting the state\u2019s economy. That didn\u2019t work and the reductions were eventually rolled back.<\/p>\n

Ganahl has also pointed to the fact that nine other states don\u2019t have an income tax, including Florida and Texas.<\/p>\n

However, Florida\u2019s sales tax rate is more than double Colorado\u2019s rate at 6%. Florida\u2019s effective property tax rate is also much higher than Colorado\u2019s, according to Rocket Mortgage, at 0.89% and 0.51% respectively.<\/p>\n

In Texas, the state sales tax rate is 6.25%. Rocket Mortgage listed Texas\u2019 effective property tax rate as the seventh highest in the U.S. Colorado\u2019s rate was ranked as the third lowest.<\/p>\n

Even if Ganahl wanted to raise the state sales tax rate in Colorado or the effective property tax rate, doing so would be immensely difficult.<\/p>\n

Colorado\u2019s Taxpayer\u2019s Bill of Rights requires voter approval for all tax increases, and Coloradans have been mostly unwilling to approve state tax increases since TABOR, a constitutional amendment, was adopted in 1992.<\/p>\n

Hansen also points out that raising the state\u2019s sales tax rate would be regressive since doing so would force poorer Coloradans to shoulder to shoulder the same increases as their wealthier counterparts.<\/p>\n

But Ganahl said she is undaunted by the big challenges that come with trying to eliminate the state income tax.<\/p>\n

\u201cI am all about rolling up my sleeves and making solutions work,\u201d she said.<\/p>\n

Read more at The Colorado Sun<\/div>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

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