Colorado taxpayers on the hook for $1,800 each despite federal aid infusion
Colorado has a debt burden of $3.6 billion that leaves the state’s taxpayers on the hook for $1,800 per person, according to a new report by a fiscal watchdog group.
The report by Truth in Accounting (TIA) gives the Centennial State a “C” grade for its fiscal health, ranking it 15th in the nation. Colorado $1,800 taxpayer burden ranks as the fourth-lowest in the country, while 11 states have taxpayer surpluses, TIA found.
The state’s fiscal health did improve thanks in part to federal pandemic aid, TIA founder and CEO Sheila Weinberg said.
“Colorado’s overall fiscal health improved mostly due to $2.9 billion in federal aid received in relation to the COVID pandemic,” she said in a statement. “The federal government had to borrow or print money to provide this type of relief due to the pandemic. What will happen to the state when the money runs out? Should states, like Colorado, be so reliant on the federal government?”
According to the report, the average taxpayer burden across the country was over $9,300 last year, representing a more than 20% climb from 2019.
TIA calculated state tax burdens by dividing the funds each state needs to pay its bills by the estimated number of state taxpayers. Similarly, taxpayer surpluses were calculated by dividing the total amount of money left over after all a state’s bills were paid by the number of taxpayers.
“[Colorado] is in poor fiscal health because it has not been properly funding its pension and retiree health care promises which places a burden on future taxpayers,” the report said.
The state’s public employee retirement system added more than $1.2 billion to its debt despite returning more than 17% of invested funds last year.
States set aside an average of $0.64 to fund pension promises and $0.08 to fund retiree health care last year, according to TIA.
Once the pandemic hit, state funding for these obligations was shattered, leaving most states with far less money to pay out its growing obligations.
“The majority of states were financially unprepared for any crisis,” Weinberg said. “When states can’t pay their bills, taxpayers are on the hook.”
This article was originally posted on Colorado taxpayers on the hook for $1,800 each despite federal aid infusion