Audio test. Audio test for JBC. JBC is back. Maybe for the last time? Mister Sawetzky. Now that I've jinxed this. Thank you, mister chair. For the record, Greg Sawetzky, Chief Economist, Legislative Council staff. I'm here returning before the committee to discuss the draft bill concerning tax credit triggers that you authorized, for preparation last week, and that has been sent to you in its most recent and most glorious form about an hour ago from mister Lively. I also have some slides and I'm working to get into the Zoom so I can share them with you all.
Mister Kelly, if you can make sure I have that link, I will be able to do that. But, mister chair, while we're accomplishing that to make sure that the committee is aware of what we're returning to, these are the tax credit triggers for the family affordability credit, the earned income tax credit. There is a draft bill that mister Lively prepared for you all, that includes the two primary changes to how those triggers function. Most significantly, as I alluded to last week, the base year, which is currently f y twenty four twenty five, is changed to f y twenty three,
twenty four. That's a year for which we have an actual value, and for which we know that the CAGR calculation does not result in revenue coming in below the level needed to fully fund the RFC cap and the homestead exemption requirements. And then the other is looking at two fiscal years, when calculating the trigger. The reason for that is because a tax year necessarily affects revenue for two fiscal years. And so, in particular, it will always for example, tax year 2026,
that's the next trigger that we're resolving, affects, revenue for f y 2526 and f y twenty six twenty seven. The current trigger only looks at the forecast for FY 2627. And so there's some risk that you end up in an environment where revenue for 2627 is expected to be great enough to fully support the amount of the tax credits. The revenue for FY 2526 is not. And in that environment, you would end up seeing revenue below what's needed to fully fund the ref c cut for 2526. And then if the forecast is right,
sufficient revenue, to to fully fund that for 2627. And so the way that the bill has been drafted looks at both of those fiscal years. Vice Cerretta. Thank you, Mr. Chair. And, I am going to actually request that that part of the bill, which I think is a lot of it because it has some conforming sections about making years plural, that we actually not do that. That is, not how the CAGR was built and anticipated to work. And I appreciate Mr. Savetsky's desire to give us some options and perhaps a very conservative approach.
But, I prefer to just look at one year at a time because while it is possible it could have the impact Mr. Sawetzky described, it also can have the opposite effect, which is that it shuts off a these credits for two years when in fact there was sufficient revenue to provide for the benefit that we are looking for under the CAGR. And I don't want to preemptively turn this off. And these are all guesstimates. And we saw in, for example, the difference between estimates in the COVID year,
where in one forecast we were plunging down dramatically and there were billions of dollars made of cuts and then the economy recovered very, very quickly. And so, there is yes, there is uncertainty in everything that we do. But I would prefer to take this one year at a time, not two. Mr. Svetsky. Thank you, Mr. Chair. Rajeev Svetsky. Thank you, mister chair. I'll just note, the way the bill is drafted, each tax year is evaluated individually. So it's not an evaluation of two tax years at a time.
It's one tax year. That tax year is looking at the forecast for two fiscal years, and it's looking at the more conservative of those two because the tax year is going to reduce revenue for both years. If you're wanting to go to one year, one option would just be to take out everything in the bill that refers to two years. The other option would be to look at the first year of the two as opposed to the second because that's a year where we're we'll have more forecast certainty. Currently, we're only looking at that out year, and that means that we may know definitively turning on the credits is going to reduce revenue that that would otherwise be available for the budget,
but the but the trigger wouldn't allow us to look at that, which is the reason why I had, recommended that that be included in the draft bill. If that's not what the committee wants to do, it's I think, would make the draft bill much shorter if that was pulled out. Thank you. This is more a question to Representative Saroda. Are you you're just concerned about preemptively shutting up a tax credit in more than one year. And I guess my only concern is that I would like to make sure that we're using good data and the most conservative data so that we're not ever threatening
our ability to fund everything that we said we were supposed to fund, including our Homestead exemption and those sorts of things. So, I also don't want to preemptively shut off the credit when we don't need to, but I do want this to be reflective of the most conservative data that we have. And I guess just to follow on that, is that in any way counter to what you are suggesting? Russ O'Rourke. Thank you, Madam Chair. I mean, I think I don't necessarily subscribe to the idea that we should use the most pessimistic data that we can gather up.
It's not actually how we are budgeting in terms of the way in which we are told not to split the baby. We choose a forecast. We budget off of that forecast and we take it from there. We can make changes as we go forward in our budgets. But I prefer to utilize this CAGR in the way that it was designed, and we haven't gotten there yet. But I have a different suggestion for also what we use as the base year, which is utilizing instead of Mr.
Sobetsky's suggestion to go back to 'twenty three, 'twenty four, which is picking a number, instead to utilize the March '4 forecast, the OSPB forecast, which is the forecast that was used to build this model and to build this trigger. So we know that utilizing that forecast makes the CAGR work and doesn't put us in that position that Mr. Sovetsky had alerted us to as a possibility for utilizing the 'twenty four, 'twenty five December forecast.
And so I would like to I think that there was a lot of time and thought and effort put into this formula and how it would operate. And so utilizing that forecast and just and the one year not picking the picking and choosing forecasts, I think, is the direction that I would like to go. And we can make adjustments as we go forward, but we still believe that this formula can work and would like the opportunity to see it work. While we're actually cutting poverty in half,
I think is the data that are coming out of these, that was the projection and that is, what is happening as people are claiming these credits. And so I think that's something to be incredibly proud of and would like to make this work going forward. So your suggestion is that we base it on the March forecast for 2024, reps are on the bottom? The OSPB forecast that was presented in March of twenty twenty four for fiscal year 2025. Got it. And the argument is that that's what the bill was drafted to and so using
that as the base sort of makes everything that they'll work? Yes. Got it. Okay. Senator Mabile? What happens if we don't agree and don't do anything? This, what we're what we're seeing here. Mr. Chief Sevetsky, you want to give us a brief overview? Sure. Of course. So, Mr. Chair, this was requested by Representative Hager at the meeting last week, but I wanted to make sure that you all saw sort of what the issue is here. I've got some slides, and there there are a few of them, but they're animated and they'll go pretty quick. This is the current law formula, and I wanted to illustrate it for you. Under current law, the
triggers use FY 2425 as the base year and we don't know what FY '20 '4 '20 '5 revenue will actually be. So I've shown you three different scenarios here. One is the OSPB forecast, one is the LCS forecast, and one is what I'd call the low scenario. As I mentioned to you before, based on the only data point we have since the March forecast, revenue is tracking about $340,000,000 below the March LCS forecast, and so that red dot is just the LCS forecast minus $340,000,000. Revenue could be below that. Revenue also could be above that.
And, again, we're not revising our forecast down based on one data point. That would not be a responsible way to conduct a forecast. The next thing that happens is that the formula requires, that we look for 3.75% compound average growth rate, to fully turn on the credits, or a three point o percent compound average growth rate to turn on any values of the credits for tax year 2026. And that growth rate is between the FY 2425 base year and the December OSPB forecast, December 2025 OSPB forecast for FY 2627.
The slopes of these lines are 3.75%. I didn't wanna put the three point o percent on the graph just because it would make it more complicated than I think it needs to be to to make the point I wanted to make. The next item that we look at is the values in the forecast, and we don't have those yet. Those will be, the December 2025 OSPB forecast. But I wanted to note first and foremost that if you looked at the f y twenty six twenty seven forecast from LCS and OSPB that we currently have prepared, that you've seen, that we presented in March, both of the those forecasts are sufficient to fully turn on the credits.
And so those and those two points are actually very close to each other. You can see the LCS and OSPB points there at the top of the chart. But to show you sort of a a most, dramatic scenario, and I'm doing that intentionally to show you where I think this formula breaks down. I've given you, again, that low scenario that says, what if revenue was 340,000,000 below what we thought for 2425, and what if revenue grew by 3.75% compound average annual growth so that it's enough and so this isn't the numbers that I'm going to present are not the worst
case scenario. The worst case scenario would be if that red dot on the left is lower, if it's below $340,000,000 below the LCS forecast. But given the $340,000,000 below, this is sort of an approximation of what how wrong the trigger could go. In those circumstances, here is what revenue would look like. We would fully turn on the credits for tax year 2026, and all three forecasts would have the full amount of revenue subtracted. And so the the difference between the dot and the bar for each forecast is
the same, there because in all scenarios, we would have the forecast the triggers fully turned on. Now for the your purposes, I wanted to compare that to what you would need to fully fund the ref CCAP plus tax year 2027 homestead exemptions. Essentially, the level of revenue that you would need to collect so as not to have to reduce general fund appropriations because money isn't available for the budget. And that depends on what you expect the ref c cap to be and what you expect Homestead to be. The two projections are fairly close. That teal line is the OSBB forecast.
The gold line is the LCS forecast. What you would be concerned about is that in that low scenario, revenue is below the projected ref c count. Now to rep Sarota's point about pessimism, this is a pessimistic outlook. The red line is not our forecast. It's not the OSPB forecast. Under the current forecast, you would be fine because the OSPB and LCS bars, the columns there, are above those horizontal lines. That's our current projection that you have enough money to fully fund these credits and
the trigger would work such that you would fully fund these credits. The red scenario is one where the trigger would result in you fully turning on the credits, but you don't have enough money to fund them without revenue dipping below what would otherwise be used for your budget. And so you'd end up with 432,000,000 below the LCS projection of the amount needed to so that revenue doesn't constrain your budget so that you're constrained by Taber instead, or $610,000,000 below the OSPB forecast. I see a question,
Mr. Chair. Madam Vice Chair. Thank you, Mr. Chair. So, Mr. Svetsky, can you tell us again how did you come up with the low scenario? What how does that what's that dollar figure based on? Sure. Steve Svetsky. Thank you, Mr. Chair. Madam vice chair, thanks for the question. So the low scenario the actually, the more important piece of the chart is on the left. It's the expectation for the base year because that is what determines the level of revenue that we need to forecast in order to turn on the credits. The low scenario for the base year is the LCS forecast minus 340,000,000.
That 340,000,000 is based on the March data point that we've talked about before. I wanna note there that that low scenario is not a worst case scenario for f y twenty four twenty five. That point on the left could be lower or higher than any really, any of the three dots there. But it is showing you the reason that I brought this to your attention, which is my concern that f y twenty four twenty five revenue may be below the ref c cap, in which case I don't think the CAGRs work to do what they're trying to do.
The number on the right is just that number grown by 3.75% to essentially show you if you had sufficient growth to fully turn on the credits, which is what the CAGR says 3.75% is what you need to fully turn on the credits, how low would that revenue amount be relative to, the RefSeq cap and the homestead amount? So, mister chair, I do have a couple more slides here that show what's in the bill now. Yep. And what this does is it looks at f y twenty three, twenty four as the base year. That's the current build. Again,
we know that amount. So now instead of three lines, you have one line. And Rep Serota mentioned her alternative approach, which is use the OSPB March twenty twenty four forecast. In that situation, we also know that amount. You also would just have one line. It would be a different line. It would be lower than this line. But it would be a single line, and that line is the amount of revenue that you would need to attain in a forecast in order to turn on the credits. Senator Kirkland? So the March 24 forecast is an actual number. And you're saying it would be lower than the actual number that or the actual
line that you're drawing here with twenty twenty three-twenty twenty four base year. Chief Sevetsky. Thank you, Mr. Chair. Senator Kirk Meyer, yes. So the proposal, as I understand it, would be to use the March 2024 OSPB forecast of revenue for FY twenty twenty four-twenty five. That means that the starting point would be, you know, shifted one year over to the right because we would use a value for 2425 as the starting value, and it's a definitive amount of money. We we can go and pull up the OSPB forecast from March of twenty twenty
four and we know what number is in it. And that, I think, provides a lot more certainty with respect to these calculations than current law does. Senator Majdle. You guys can just all roll your eyes and not answer this question. But I wonder why is the trigger based on some growth amount rather than based on where we are relative or where we're predicting to be relative to the Ref C cap? Chief Sevetsky. Mister chair, senator Amabile, my understanding is that there are legal reasons why that is not a preferred approach.
And I will not guess as to what those are. I know that you have attorneys in the room. Okay. I mean Tabor. Okay. So Tabor doesn't let you set a credit trigger? Oh, the lawyers are getting antsy. I'm sorry. And maybe we don't have time for this, but I just that that doesn't make sense for me if what we're trying to do is make sure that we don't have these credits if we don't have, if we're not above the cap. Mr. Lively. Thank you, Mr. Chair. Pierce Lively, Office of Legislative Legal Services. As a starting point, I cannot speak or explain what the intentions of the sponsors were last year.
To the extent I was made aware of that and that wasn't public, it it remains privileged. I think I can allude to what a concern maybe, which is that it sounds like what you were suggesting, if I understood correctly, is that we use a similar measure of growth to population and inflation, the amount by which the Tabor cap grows. I think that there is a desire with this bill to make it very clear that this is not a Tabor refund mechanism and that instead we are differentiating it
from that. And so we are using different approximations of growth, but we are not tying this to the Tabor growth factors in the same way we would if we were, say, creating a Tabor refund mechanism. Thank you. Chief Sevetsky. Thank you, mister Chair. So using this base here instead, you have a definitive line. These three dots on the right are the same dots as from the last series of slides. So what I mean by that is whether or not you change this law will not change our revenue forecast of what revenue would be without the credits.
The OSPV scenario is the same, the LCS scenario is the same, and the low growth scenario uses the same assumptions as I used to populate the last series of slides. In this scenario, under the current March 2025 forecasts, you still have enough in revenue expected to fully turn on the credits. Under the low growth scenario, you do not. And so you have revenue that looks more similar under the three scenarios because under the OSPB and LCS scenarios, you fully turn on the credits, and in the low growth scenario, you do not.
And so the level of that red bar is the same as the level of the red dot because we don't see additional revenue loss attributable to the credits. But under the OSPB and LCS current forecast, the the March 2025 forecast that we published and that we're defending, you would see a revenue reduction attributable to those credits becoming available. In all of those scenarios, you are above the amounts needed to fully fund the ref c cap and the homestead exemptions. But and I think this is an important point with respect to your discussion this morning. Here's the consequence of this,
and I want I don't want to to smooth this over. I think that this is an important point for you all to consider. In this version of the bill, you can have an environment where the low growth scenario results in the credits being turned off when there is some money available for them. Right? What I'm showing you here is that in that low growth scenario, you end up with revenue that is $386,000,000 above the OSPB projection of the RefSeq cap and $565,000,000 above the LCS projection of the RefSeq cap plus Homestead.
And that is money that you had the triggers been written differently, may have been able to allocate for these credits. The counterargument there is having that buffer is a protection against the possibility that the forecast is wrong. Right? Because even in the world of this version of the bill, you are still using the December 2025 OSPB forecast as your guidance for whether the credits ought to become available, and there's some risk that that forecast could be different than how actual revenue collections
perform. Now, what you don't see on these slides is I didn't go through and show you how the bill as drafted looks at the two fiscal years. It looks at, in this case, both FY '25, '20 '6, fiscal years. It looks at, in this case, both FY '25, '20 '6 and FY '26, '20 '7. Rep. Cerrotta has indicated that's something she'd prefer not be in the bill. I just wanted to mention that that is a feature of the bill that isn't presented in these slides, and we can discuss that more if the committee is interested. If it's, your desire that that be pulled out, then we don't need to go further down that rabbit hole. Chief Svetsky, is it I know this is maybe off the top of your head.
I don't know how much conversation you had this weekend. But if we go with the March 2024 OSPB forecast that the bill was built off of instead of current law, is that sort of splitting the difference between where we are with existing law and what it is that you're proposing here? In other words, would we be less likely to turn this off when we had the funds, yet still more likely to turn it off when we didn't than under current law? Chief Sebesky. Thank you, Mr. Chair. From my perspective, switching to a version of the bill that uses the March 2024 OSBV forecast still
results in a dramatic improvement over current law in terms of your certainty for how these triggers work. Work. Mhmm. My principal concern, the reason why I chose to make noise about this, is that we don't know the FY 2425 actual revenue collections amount. And that means, you know, to go back to this version of the chart, that we have these three different lines or more infinite lines that are somewhat close to these. And as a result, I just don't have confidence that the trigger does what it's supposed to do at all. I think going to the March 2024 OSPB forecast,
at this point, you know, the fact that it was a forecast is not particularly important. It's just a number. You would be using that number as your starting point as opposed to f y twenty three twenty four actual revenue collections, and so there's no uncertainty to it. The fact that it was a forecast is is no longer matters because we know what that number is. What you would end up with is a version of this slide where you have a gray line and the gray line is somewhat below the gray line that's in the the the chart right now. I haven't run those numbers. I didn't know that that was an alternative proposal until this morning.
I can run them very quickly. But I would say that my expectation is that they would result in something similar to this version of the proposal. Mhmm. The the consequence would be that you could have a version of the red dot that's closer to those OSPB and LCS lines, and you could have the possibility that revenue might fall below them with with the credits turned on. But that possibility is just much less dramatic than under current law. And I would perceive it from the perspective of budget sustainability and planning to be,
preferable to the structure that's in current law right now by by quite a lot. Okay. Rep. Serota? Thank you, Mr. Chair. And to be clear, I did work with, the folks who worked to design the CAGR as well as Director Ferrendino and Bryce, whose last name is escaping me at this moment, I'm sorry, Bryce, to make sure that everyone felt comfortable about using the forecast from March 24 that we would ultimately do the same thing here. As Mr. Sobetsky said, we, yes, are just we are is picking a number,
but it is picking a number that we feel has a foundation and logic and reason based on the way this CAGR was designed to work in the first place and so has some predictability. Any other questions, folks? Senator Kirk Marr. Thank you, Mr. Chair. Okay. So we can't do anything about twenty twenty five, twenty twenty six. We can only impact twenty twenty six, twenty twenty seven and going forward. And if is that correct? Chief Sevetsky. Thank you, Mr. Chair. Thank you, Senator Kirkmeyer, for the question. The way that the bills work now, the credits are fully turned on for tax year 2025, which I think is what you're asking about.
I actually think that you probably could adjust the credit amounts for tax year 2025. We've not discussed that at all. That hasn't been part of what I discussed with you last week or this because I've been focused on the triggers, which are prospectively looking at tax year 2026 in later years. When you are addressing the trigger for tax year 2026, which the draft bill does, you are affecting FY 2526. Just this is kind of my world in terms of of forecasting tax credit stuff. When you turn on a tax credit for tax year 2026,
that credit is claimed by taxpayers when they file their returns for tax year 2026, which they, in fact, do in the spring of twenty twenty seven in most cases. But we accrue about half of that impact back to FY 2526. And so changing the credit amounts for tax year 2026 does have an impact on the level of your 2526 budget, and so FY twenty five-twenty six is affected by the bill draft. Okay. Rep. Jagger. Thank you, Mr. Chair. I guess, I want to go back to current law for a second. I understand either using a base of 2324,
which is actual, which from my background, I always like to project off of an actual. But I respect the question that Representative Saroda or the proposal she's putting out. But I'm now trying to figure out what's different from the current law because I thought the current law was also projecting this off of the March 2025 forecast. So what's different here? Because you said it gets closer,
but I'm getting closer to getting confused. Chief Zabetsky. Thank you, Mr. Chair. Representative Tigard, I will do my best to assuage your confusion as much as I can. The difference you're I believe you're asking me about the difference in the level of clarity between current law and representative Soreta's proposal. I can speak to that. Current law uses FY 20 four 20 five actual revenue collections. And to be very specific, it uses actual revenue collections, and then it requires that we add back the amount of the revenue reduction attributable
to the credits, which is just avoiding a circular reference problem. That's a necessity of the way that the formula works. The issue that I've brought to your attention is that we do not know that number. We don't know what f y 2425 actual revenue will be. That's why the three scenarios I think that you get that part of it. The part that I'm guessing is tripping you up is why going to a forecast fixes that. I think the reason is because, as I understand rep serota's proposal, she's recommending or suggesting that instead of using FY 2425 actuals, she's just recommending that we use the number that was in the March 2024 OSPB
forecast. That number is a known quantity. We know what that number is. It's not flexible. And so it is from the perspective of how law would look if you pass that bill. It is an actual amount. It's not something that we then need to project in the future because we can go back and read that document and know what that number was. And for that reason, these, you know, infinite scenarios that I've represented as three lines of this chart collapse onto a single version of the CAGR. We would know what that amount is going forward. The reason it's lower than the version of the bill in current law is because
where the gray line would actually fall, it would have the same slope as the gray line that's on this chart. It would be transposed down by some amount, and I again, I'd have to look at the forecast to know exactly what that amount is. But it would be a higher line than probably all three versions of these lines, and certainly the red version that I'm most concerned about. So it sounds like we do not have consensus around the proposal that's currently in the bill, but we perhaps have consensus around some adjustment to that that is as I read
it and I think as I'm understanding, which again I'm close to being confused on this too, sort of splits the difference between what it is that you had proposed and what it is that's in current law. But I'd say even perhaps more importantly is exactly the number that the bill was designed to work around, around, to sort of ensure that we are never turning this off when we have room, but never turning it on when we don't. So, I think given that OSPB has looked at this, I think the advocates have looked at this, I think this is that is a plan that would pass and we're very close
to the end of session. Is there any is everyone okay with moving forward with a plan like that to try and fix this in a way that again, sort of splits the difference between Chief Sevetsky's proposal and current law. Senator Kirkmire? But we don't know if that fixes this because we still don't have the 2425 actual numbers. So we don't know what the collections are going to be in 2425. Plus, we don't have the '24 forecast up there. I mean, I understand that's an actual number,
but we still don't know. Chief Sevetsky. If you were to adopt representative Sirota's proposal, the FY 2425 actuals don't matter. You only would be considering the amount From the March 2024 OSPB forecast and the future forecast, which would be used to determine whether the trigger is met. That's the December 2025 OSPB forecast of revenue for, under current law, just FY 2627 under the bill, both FY 2526 and FY 2627.
And I think that you don't want from my perspective, you very much want to wait until you get that number to determine whether the credits are available. If you were to not look forward to a future forecast and instead use the current forecast, under every scenario I presented to you, you would fully turn the credits on. And I am not confident that you will be in a budget environment that can support the full amount of those credits without having revenue fall below the ref c cap. So that's the part that would still be unknown. That's the part that the mechanism has always designed to handle as a future unknown.
That's why it's a trigger, right, is that we'd be waiting to see that future forecast to determine whether the credits are available. If you went with Rep Seroda's proposal, you would resolve the left side of the chart, the what is the line, at a level that I it sounds like OSPB has run the numbers. I haven't run the numbers, but I expect the finding of running the numbers is that you don't end up with a scenario like the one on the chart for the red line, where you have the credits fully turned on and no money to support them. And I can run those numbers right away.
It's not a difficult analysis. Thank you, Mr. Chair. Just a scenario then, Mr. Sebesti, Chief. What happens if the 2425 forecast of March ends up higher, let's pick a number, higher than the actual $24,000,000 or $25,000,000 to the tune of the $350,000 3 50 million dollars that you talked about once before. Pick a number. But if it's substantially different, what happens then by using that forecast number as the base?
Chief Sevetsky. Thank you, mister Chair. Thank you, Representative Tigard. If you are asking about the consequence of using the OSPB forecast number as the base, there's no consequence of that because we know what that forecast number is, right? We No, you're misunderstanding what Okay. Go ahead and dial that. What I'm concerned about is I understand the old was based off 2425 actuals. The March 2425 forecast, if it were, pick a number, dollars 300,000,000 to 500,000,000 higher than the actual tax revenues that we collect,
what happens then? Are you just asking about current law, or are you asking about Rep. Serota's proposal? Rep. Serota's proposal. So in the case of Rep. Serota's proposal, we don't we really don't care about FY 'twenty four, 'twenty five actuals. Mr. Lively. Thank you, Mr. Chair. Chief Smith, if you don't mind by attempting to explain it perhaps. So under current law, what we're doing the trigger is based on what actually happens in fiscal year twenty twenty four, twenty twenty five, which is as of right now an unknown. Representative Saroda is proposing something that was a forecast in the past,
but we're not looking we're not going to update that number based on what happens after the fact. She is just it's called a forecast, but that is honestly irrelevant for that. It is just as Chief Sebestky has said, a dollar amount. So we don't have to worry about what happens between now and the end of the fiscal year if we take representative Sirota's suggestion because we just have a flat dollar amount that cannot change. Similar to what Chief Sebestky suggested where we had a flat dollar amount that's different, but still a flat dollar amount. Either scenario removes the risk of a severely negative change over the next couple of
months or so as the fiscal year ends. I think it is confusing because, rightfully so, Representative Sorensen is referring to it as a forecast. But unlike most forecasts, we're not waiting for it to be updated. It's just a point in time. It's just a single number. So we, by adopting that, have removed the risk that we currently have where we only have a March forecast, but we're waiting to see what happens and that number will change. Does that help in any way? Perhaps a different way to put it is it's two different marches and maybe that's
led to some confusion as well. The number that Representative Saroda is referring to was derived in March of last year, not March of this year. The numbers that Chief Sevetsky is referring to on the left of that chart there are March of this year projecting what's going to happen over the next two or three months as the forecast ends. And there is a gap between what that says and what could happen, and that is where his concern is arising from. Representative Saroda's proposal would have the effect of saying,
Well, wait. Let's just pause where we were when these bills were passed under what we suspected was going to happen and move forward based on that single number. So we have a flat, unchanging, constant base as opposed to the current situation where over the next two or three months, the base could change and there's a high likelihood we'll change in a negative direction. The question before you as I understand it really is which of I think every there seems to be agreement that there should be a constant number in the base. It's just which constant number do you want to use?
Do you want to use the number that was what we thought 24%, twenty five % was going to be in March of last year? Or do we want to use what we know the revenue was from 2023, '20 '20 '4? And those are both constant numbers that are not subject to change and so therefore, we remove the element of risk. But they're both constant numbers. It's just a question of which ones you want to use. I mean, I hope I wasn't mischaracterizing. We got I feel like we got to do something. And I think that Rep. Cerota's proposal doesn't go as far as Chief Sevetsky's proposal, but I think the positive to that is that it's less likely we'll turn their credits off when we have room for them.
But it is still more likely than under current law that we won't turn them on when we don't have room. Whatever that didn't come out right, but you all know what I mean. Can we see Yes. Do you want to sit with this, Senator Kirkmeyer? Yes. Can we see what the '24 forecast actual number, what it looks like on the chart? Could we see that? Can you draw a new line for us, Chief Sevetsky? Mr. Chair, yes, absolutely. I can't do it while sitting here in the next two minutes. I'm sorry. But I I I can do it for you as soon as you need to reconvene. I know. Right? Come on. Open. Job job applications open.
All right. Thank you very much, Chief Sevetsky. It sounds like we do need six for this to move forward. So I think we're going to need to sit with this for just a little bit. If you the sooner you can get that line to us, the more likely it is we'll be able to move forward with it. My understanding, just so the Committee knows, we have to leave pretty soon here. We do have more to discuss as a Committee that obviously we didn't get to this morning. So we will be needing to meet again. I'm told the House is gonna be on thirds all day today, so unlikely that we'll be able to meet again as a committee today. But the next time we have seconds in both chambers,
it would be really, really nice if we could all come here because I think we have a probes every morning this week so we don't have another morning that we can all come together, easily. Yes, Mr. Lively. Thank you, Mr. Chair. In the interest of time, would you like for me to prepare a draft of the bill that represents Representative Sirota's changes so that you have both drafts to consider so that we can move forward more quickly after you make a decision? A bill that represents Representative Sirota's representation of how the trigger would move? Yes, please do that. And then we can move forward hopefully very quickly. Thank you.
All right. We do have yes, this is Ms. Curry. How quickly will this go? Okay. Ms. Curry? Is there a second? Yes. Oh, yeah. You gotta do that too. Okay, thanks. I just was updated that perhaps the House will not be in thirds until the wee hours, and so there may be a chance for us to come back and meet later this afternoon. Certainly, we'd love to do that if we can. Rep Taggart? Are you up first? Alright. We could figure out, when that timing is, but it would be great if we could all come back, and address some of these things. Ms. Curry? Thank you, Mr.
Chair. Michelle Curry, Joint Budget Committee staff. So in front of you is a memo about a bill proposal that was actually born of the Colorado Motor Carriers Association out of concern about the, extensive cuts that had happened to the Department of Transportation this year. So there's this was brought to me by the department via the association. The idea is to, speed up and increase in the bridge and tunnel impact fee. The there that is a current charge on special fuels,
that based on Senate Bill twenty one two sixty is set to increase over the next five fiscal years. And so the proposal is to speed up that increase, in order to generate, increased revenue for the bridge and tunnel enterprise. So that increase would be under the enterprise, not part of the TABOR cap. There's, still conversation happening about the best case scenario for the motor carriers, and so I think there's still some stake holding that could be important. However, the draft would, the proposal would increase by 1¢ that fee,
which is set, on the pump. It's a it's a currently set at 5¢. So this would start in, August of twenty Sorry. The fee would increase, for the current fiscal year by $0.02, making it $0.07 per gallon. That would continue into 2627, and then increase again to $0.08 in 2728, which would then carry forward. So the fee is set to be at $0.08 starting in 2829 in current law already. So this is just adjustments to the schedule of that.
That would generate, in total over those three years, twenty eight point four million dollars into the bridge and tunnel impact fee. The idea is that that bridge that, enterprise is able to conduct some surface level, maintenance, particularly on bridges and, like, overpasses. So that would alleviate some of the strain that's been put on the, the funds in CDOT for that kind of work. The the other thing that would be included in the bill if it was sent to draft would be extending a tax exemption. It was it expired this year, but that tax exemption is on maintenance and other trucking that,
is used across state lines. Currently, we're, like, the only state in the region that does not have a tax exemption for getting maintenance done, for buying special parts, and those kinds of trucks that are used across state lines, which kind of results in, limitations on the amount of, trucking that happens within our state from other states. So it's like having an impact on the commerce. That tax exemption, currently, the proposal not that it's in a bill yet, but the proposal will be to continue that through, calendar year 2029. That makes sense to me because that aligns within what's happening with the increase of
tax, the speeding up of the, fee. And so and that would generate $2,500,000 in revenue savings. So it would reduce the revenue by $2,500,000 and that revenue is subject to Tabor because that is a tax. Senator Mavalley? So we could do one without the other. Is that right? We could raise the fee without doing the tax exemption? Yeah. Miss Gary. Thank you, mister chair and thank you, Senator Amabile. That is correct. We could, or you could. That could result in some pushback from, stakeholders, but that is an absolute option.
I would say if we do that, it's unlikely the bill passes. Senator Amabile. Okay. That's not what I just heard talking to CDOT, but because there's already some pushback on the tax credits or the tax exemption anyway. Is that right? Or Rep. Serota? My understanding is the pushback was merely saying that it would sunset in was it '29? And they wanted to continue on forever. But we have tried to take a more, measured approach to how we adopt tax credits to say, let us revisit these things every so often to make sure that they're actually fulfilling
their purpose and that we can afford them. Ms. Curry? Thank you, Mr. Chair. And to build on that, my understanding is that it's a statutory requirement. If we're going to have if there will be a tax exemption, it has to end at some point in statute. So the pushback is that they want it to go on forever. Legally, that can't happen. So 2029 is when the fee is set to hit what's in current loss, so that would be the idea. So Ms. Curry, if I can boil this down, essentially, we'd be trading $22,500,000.0 in revenue, which is above the Tabor cap,
for tens of millions of dollars in support for roads in a year that we cut a whole lot of money to support roads and that this change is supported by the folks who would be paying for this. Ms. Curry? Thank you, Mr. Chair. Yes, that's correct. And then on the left wasn't for Roads, but we had made some other adjustments. We took money that was supposed to go in this year and we moved it out ten years. So we've had an impact on funding for Roads. Senator Kirk Meyer? I think they're actually talking about the fee on the motor vehicle registration fee that we reduced by $3.0.003
dollars for two years. That's the only portion that impacted safety projects on the roads. The MMOF did not and the other moving around for funding of projects in the ten year development plan did not. So I think that's what they're talking about. And so that's I just want to make sure we were clear. So that's all. Committee good with this? Senator Majole? Yes. All right. Madam Vice Chair. Thank you, Mr. Chair. I move that the committee, give staff authority to work with OLLS to prepare a bill draft to adjust the
bridge and tunnel impact fee schedule. Can I ask for a modification given how late it is in the session and given that I don't think we need to agree? There we go. Are there any objections? Seeing none, that motion passes six-zero. We'll start in the Senate. Run as soon as it can. Senator Kirk Meyer will sponsor. Senator Bridges will sponsor. Senator Amabile will cosponsor. In the house, it'll be Byrd, Taggart, Sirota cosponsoring. Alright. And with that, we got a bill signing we gotta get to. So joint budget committee. Oh, Ms. Bickel, just to be clear, there is a memo on some changes here for some changes to the Big Blur.
We were planning to take care of these in appropriations tomorrow. Do you want to run through like in a minute? And just what happened to you? Sure. Sure. Sure. Sure. Sure. One thing, name use of the John Buckner name that was previously assigned to one of the programs that you're eliminating. There was a drafting question about it, which we didn't address on the mic. The idea is that one of the new programs that's created in the Big Blur would be named for John Buckner, making sure everybody's okay with that. Is that good? Love Janet. Okay. The next is a reporting year date, moving that out one year. The next item is
making sure that students who did come out of the ASCENT program still get the are exempted from the lifetime limit on the College Opportunity Fund program count for the time they spent in the ASCENT, right? We're getting rid of ascent. So this is just like students who did graduate under the ascent program. And finally, there's some changes. There's the these appropriation clause and changes to statutory administrative caps on the use of funds in the program. Basically, my suggestion is twenty five-twenty six is a transition year from old programs to new
programs. I suggest you not have a statutory administrative cap for that year because it's too hard to manage. And instead, we have separate we have an appropriation amount for administration and appropriation amount for program. That's how you will separate those two things. And so those are and then there's also allowing also just for twenty twenty five-twenty six, permission to use CDIP funding, a portion of the $5,000,000 that you're retaining in CDIP, the Career Development Success Program, towards the transition administration to this new system.
Okay. Again, it's because during this transition period, you actually need more money for administration and you don't have that much money for these new programs. So that's really what's, in this memo. Just wanted you to be aware and hopefully comfortable with it. Any questions? All right. Thank you very much, committee. The general budget committee will stand in recess till hopefully this afternoon. Okay. And Ms. Yes, that I know is on the list is the hired incentive tax credits. Yes. And we will be discussing that. Thank you. The Joint Budget Committee will now come back to order. Welcome back, everyone.
We got lucky and were able to reconvene. And since we don't have our full complement of members, we will instead dive into RFIs. And we have Mr. Dermody for that purpose. Welcome, Mr. Dermody. Take it away. Thank you, Madam Chair. Tom Dermody joined Budget Committee staff. Before you, there should be two memos. Excuse me. One is a multi page memo. I guess they're both technically multi page. One is front back, one is 37 pages. This the stapled version that is in front of you is the consolidated packet of
all approved RFIs that were approved to the figure setting process as well as the 10 bullets on the front page of this memo, the cover page, those indicate RFIs that are either new or had new additional language added to them. You have the RFI number and the page in each of those bullets. And those RFIs, in the color version, which is probably online, it's in orange excuse me, orange italicized text, but you can identify those new new verbiage or new RFIs by the italicized text on the pages identified.
There isn't really a specific process by which we go through these. If there are any particular questions that you may have, you can do our traditional now traditional Gandering, if you would like, of those particular RFIs. The additional memo that you have before you is also a new RFI for the Department of Education. If you do have any specific questions about any of these particular RFIs, I would ask that the affected staff shuffle on in to answer any of your questions. Also, we welcome any additional RFIs from you at this point.
This is kind of the what we hope to be the last time that RFIs were for you so that we can get them finalized and distributed to the affected agencies. We usually send a list and a version to the Office of Estate Planning and Budgeting as well as the independent agencies and their particular relevant RFIs. So the floor is yours really at this point. Would you folks like some time to gander? And, mister chair, I I would Yes. Thank you, mister chair.
I would just note that I I would, again, emphasize that if there are, RFIs that you know to be new that you don't see in this bulleted list that you would like included, just let us know. We can communicate and work with you on those particular, particular language. There isn't a hard date that this needs to be sent out, but we would like to get it sent out as close as possible to as it happens to be the signing of the long bill because it's now official. These tend to roll with the long bill and are relevant to appropriations in the long bill. So this this is sort of the,
wrapping up all of the tertiary things around that process. Rep Taggart? Thank you, Mr. Chair. I may be missing something, but the RFI on the Department of Early Childhood, I'm a little concerned and maybe I haven't read it closely enough. It says related to early intervention, but I'm not am I missing something? I'm not seeing the early intervention written up in the longer version. It talks about TANF and child welfare and child care assistance programs.
Is that Page six, number six? Yes. Ms. Love? Mr. Dermody Is it Darren? I'm missing it. Thank you, Mr. Chair. Representative Tiger, it is one sentence in that R5-six. It is the second to last sentence in Ms. Lowe, is that really conference? Is that robust enough to accomplish what it is we're hoping to see over there? Thank you, Mr. Chair. Llewellyn Lowe, JBC staff. To be determined, my hesitation at adding a target at all was the lack of data that we had making some of these decisions. I did discuss with some of the providers, is this reasonable? And they said,
yes. I think because there is a little bit uncertainty in terms of what they can all agree to in cost containment measures, I think this is a good starting point. But the message has been sent, you do need to find cost containment measures for this program. And ideally, it would be more than that. But this is your target for FY twenty twenty five, twenty twenty six. Rick Taggart? Thank you. My concern of that being the strongest sentence in there is they're going to again say that they don't have the dollars to deliver the program as developed and we're
going to be the bad guys. Ms. Logue, thank you. And we've already done that to us once, and I'm not real excited to be run over by that bus a second and third time. Second. Ms. Lopez? Thank you, Mr. Chair. Thank you, Representative Taggart. I too have some concerns, but one of the things we did build into this that I hope will help mitigate that is the additional touch points. So they should be presenting you a presentation of where they are in these conversations in June at your forecast and then you'll get to hear from them you'll get
a report from them again in September, again in December. So they're having to come before you multiple times to talk about what they're discussing. And was that in the bill or is that an RFI or just an agreement, Mr. Germerty? No, that's sorry. It's in the RFI. Mr. Germany, where is that in the RFI? Because it's I don't see anything italicized along those lines. Okay. That's new as in what we haven't seen before since this was suggested. Excellent. Okay. But this is a new this RFI is a new RFI for this year sort of writ large. Ms. Lowe? Thank you,
Mr. Chair. It is they had an RFI that was existing that required them to produce reports to us, but it was only an annual report. And so what I did was made modifications to that to make more touch points for this program. All right. Thank you. Thank you very much. Anything else? Senator Kirkmayer. Thank you, Mr. Chair. So does this front of this packet, this first page, does this get sent out to everyone as well? Mr. Dermody? Thank you, Mr. Chair. Senator Kirkmeyer, no. So what gets sent out is a very form memo that says here are the
RFIs for the affected agencies. Here are the instructions on how to respond. Please send your responses to these various peoples, including Jesse and the affected analysts. And then we do our well, not we do our best. What we do is we portion out those RFIs that are for the Executive Branch that are under OSDB's purview and then those RFIs that are for the independent agencies, judicial, treasury, state. And each of those groupings get sent the same essential form instruction letter. I will have a cover memo that I'll need the chair to sign that I
can track you down at a later date before session ends to get those transmittal letters officially signed. But this cover memo does not get sent out. This is for your purposes for today. Okay. Senator McMurray? The only reason I was asking thank you, Mr. Chair is because some of the page numbers are off by one page. So like the Department of Military and Veterans Affairs is not on Page 24. They're on Page 25. So just a few of them. That's why I was going to just say maybe you might want to fix those.
But if this isn't good to anyone else, we're good. Thank you. I am getting a I can make sure that error is embedded in all of the memos. I think that'd be great. Okay. Team, I got a phone a friend. I thought we had approved the Wolf RFI language. It's not in here. So if we can bring out Ms. Shen to talk through that, that'd be great. This is just one thing to add? This is all of them. This is all the RFIs. You speak as she arrives. Thank you, Mr. Chair. I don't know that this ever got to an RFI. Yes, it did. But no. But the open question that I know I still feel like we haven't gotten a
sufficient answer is the use of $9.11 fees because I'm still absolutely puzzled why they can't be used for the digital trunk radios. And so at some point, even if it's not an RFI, I'd like to find out what if it can't be used for that, which is critical to public safety, what can it be used for? Yeah. Is it the sort of thing that we ask for a memo from the AG on or our attorneys? I don't know who who drafts something like that. Our attorneys. Our attorneys?
Yes. It'd be great to get from our attorneys, what their sense is of the nine eleven funds. They're nodding. I do we don't think we need an RFI to you all for that. Do do not. Great. Look forward to seeing that. Thank you. Ms. Shen, the wolf thing. I really thought that we had voted to include that. I'm sorry that we, we're doing it now. Ms. Shen. Thank you, mister chair. Kelly Shen, JVC staff. I think and I think it was left out. There was one RFI that was focused on like depredation related costs. I think that should be included in this. And I'm sorry, that was erroneously left out.
I sound like there's maybe conversation about wanting an update on how the wolf, like, reintroduction has been going. So it's like that part has not been discussed or approved or included. It's just the part about depredation costs that has been included. I don't see the depredation piece in here in DNR. Would it be somewhere else, Mr. Dermody, Michonne? Thank you, Mr. Chair. It should be in here. I think I just left it out. So we can have that added in place. Please do not leave that out. Yes. Exactly. Yeah. That's a big one. Proposed. Is that going to be the language that you proposed?
It's Ms. Shen, can you just read us the language? My understanding is this is language that was workshopped between, that we got a text saying, oh, no, and then we got another text saying, no, no, it's fine. And then no, no, it's fine language, I think, is fine. Ms. Shen? Thank you, Mr. Chair. So there was a there is a long bill footnote that I think had a lot of back and forth. Got it. That was the footnote. That was the footnote. But then there's separately an RFI that you all requested that was about depredation costs and sort of reporting on both direct and indirect costs. Okay. So the footnote is contained.
The footnote is on direct and indirect cost is not. It's not, but we can include it in, like Yes, please. Yes. Great. And then I think if you wanted additional information, but there's no, like, update being provided on the implementation, I think, of some of the measures that were discussed. Up to you all if you want to include that or not. We would like that. Sounds good. Curious about the wolves. Would you all like to see that language or an update? No. No. Just write it in there the way you think is best. Sounds good. Yeah. We trust you too. Anything else? Feel free to include anything in that area that you think would be helpful for
us to know. All right. Thank you. We give you permission to work with stakeholders and Yes. Do we need a motion for that? No. Okay. To accept the RFIs. Mr. Chair, the motion that I would suggest would be to accept the RFIs with the additions and adjustments as discussed today, including the CDE memo, the separate one, April. Any other questions before we do that? Madam Vice Chair. I move that the committee accept the finalized fiscal year twenty twenty five-twenty twenty six request for information, including the RFI,
addressed in the separate memo regarding CDE Colorado Empowered Learning Program and RFIs as amended by committee discussion. Are there any objections? Seeing none, the motion passes six-zero. Thank you, committee. And Mr. Chair, I will track you down for signatures later. We hope you're feeling better. Good. What's the easy one? College first. You think so? What is the What is the the whole way. Oh, captain like captain. Ms. Bickel? I think the question is do you need a copy of the draft or the redraft again?
Yes, please. Thank you. Of course. Yes. Thank you. Or you could just throw it all away. Are they just going to throw it away later? How are you keeping it? I know you might as well just put it in that blue box behind you. Is that a cube? Yes. Otherwise, it ends up in a box in your office. Unless you tell them to get rid of it and then they just file it and then later they have to get rid of it. Ms. Bickel? So Amanda Bickel, JBC staff. So this is the second version of a bill that you've looked at previously. The original version just did technical fixes to the existing tax credits bill.
This is for higher education tax credits. So those tax credits are already in effect in 2025. So it has seemed fairly important to do the technical fixes at a minimum to them because those are going to have to be processed in this coming year in 2026. During your meeting, you said there's a lot of problems with these. We're concerned about the increase in costs from the original forecast for what these would cost and you asked for a draft that phased these out.
The current version of the bill that you have before you has the tax credits in effect in 2025 and in 2026 tax year for those students who were enrolled and got tax credits in 2025. The and there's been discussion about, do you make it last longer? Do you not want to phase it out? So, we can modify it at your pleasure. Madam Vice Chair. Thank you, Mr. Chair. So, Committee, after we had our conversation about this most recently,
then I did hear back from the Governor's office and I think they also like this tax credit and want to work with the Committee to do the technical fixes, but do not terminate the credit. And then next year, we can continue working on even more fixes and improvements upon what we had in the original legislation. So don't end it, but do the original technical fixes as proposed in the first draft that you gave to us. And maybe we could talk about what those were again just to remind us
and then just reserve the opportunity again next legislative session to work on the longer term fix. Okay. So I had a memo for you, but I would need to reprint it if you want that. Otherwise, I can talk you through it. Rep. Saretta. Thank you, Mr. And Chair. Just a quick question. If that were the case, madam vice chair, does that mean that, in the next school year, as people become start to become eligible or, you know, they basically start college, It would be under basically what we have currently,
and there would be no change to that in the case that it was determined that it needed to be scaled in a particular way. Madam Vice Chair. Thank you, Mr. Chair. That's my understanding. So it's not any new appropriations. We drafted our budget to current law, not assuming a change with this. So I don't think we are creating any bigger liability, but we have next year to work. And I think a lot of those bigger costs we assume to happen in out years anyway. So we have a chance next legislative session to address overages that we when we originally talked about this tax credit that we're concerned about.
We have time to do that. Rick Jagger. Thank you, Mr. Chair. So the incoming class of fall twenty twenty five will still be covered. Okay. At what? Yes. And twenty twenty twenty two. Yes. And I think the only thing I wanted to note, but is that you the first real data you'll probably have about this is sort of December of twenty twenty six. So that's the nature of these tax credits and when you have data available. Sounds good.
Sarah Marbelle. Thanks. So the technical fixes, you were going to tell us what those are because I don't remember that seems like a lot of the incoming Class of 2026. Okay. So one is that's significant. There's a change from reflecting and discussing an academic year to instead doing a calendar year, which shortens the amount of time for when students can claim this, right? Because if they if it's so at least it's not more than a year if you are enrolled. It will be for the whole tax year and then you can claim them immediately.
Then, modifies a deadline for institutions to report eligible student data that was at January 15, and it moves it to January 31. That likewise delays a report from the Department of Higher Ed to the Department of Revenue reflecting the list of students, makes a tweak to who are the eligible students. So it clarifies that it's students who completed high school graduation or the equivalent on or after January 2024. The purpose there is to exclude students who graduated high school earlier,
attended post secondary ed and then stopped out because the way it was written would have included them. Specifies that beginning with the 2026 tax year, whether a student is eligible and qualifies is based on the facts and circumstances determined by the institution of higher ed before January 15 of the following following the income tax year. So in other words, even if there's new information later, you don't end up with kind of continuously changing whether a student was eligible or not. You make a determination based on the facts that were known as of January 15
following the tax year. Adjust dates for reporting to the JBC. So that would be an initial report 12/01/2026, with an estimate of like how much was actually spent for the program and talking about the rollout of the program. And then you start to get data in 2027, again December about sort of the impacts of the program. And it authorizes Department of Revenue to share information with Department of Higher Ed regarding whether individuals have claimed the credit, which DHE must also keep confidential.
A significant addition to the bill this time as well is to try and deal with the possibility that the federal government is going to tell us that we cannot use FAFSAs, the federal applications for student aid in doing these calculations and that higher ed institutions won't be able to reveal which students qualify, which makes things quite a bit more complicated. So there's sort of additions to this that says you have to do this to the extent allowed by law by federal law and then with the expectation that we'll
if necessary, we're going to end up with students submitting applications to the Department of Higher Ed, which are to try and deal with this income eligibility issues. It will be complex, but if that's what we've got to do, that's what we have to do. There are related to this some additional appropriations for the Department of Revenue with the expectation that it's going to be a more complicated process. So there is some additional funds related to that. So you had started out
with let's see originally, the 1340 version of the bill had costs of $478,000 in FY 'twenty six that declined then in 'twenty six, 'twenty seven. But and this is going to sort of add $135,000 general fund in 2025, '20 '20 '6, which then would increase to $200,000 in the following year. Obviously, to the extent that this doesn't come that we don't run into this problem with
the federal government, then you can make adjustments back down and reduce the amount of administrative funding. But it seems reasonable in the meantime and, these figures were included in your balancing spreadsheets that, that Director Harper was balancing spreadsheets that, that Director Harper was working with. So, that was really the whole deal, and I had noted for you that we have rough estimates at this point that it's going to cost more than we thought originally. And so just in terms of scale, the original expectation was that it would cost when we got to the first full year,
which would be $25,000,000 20 6 million dollars about $36,700,000 and now it's looking potentially more like $65,000,000 But again, there's a lot we don't know. So I think you'll begin to see in the future what those numbers actually look like. Okay. Gov's team thinks there's room for these tax credits? Next year? Yes. All I will note is they are already in place, and I'm not privy to exactly what calculations they're making about the tax credits that
are available. Okay. Rep Taggart? Thank you, Mr. Chair. Because the way 1340 was written, the tax credits would not show up until next year anywhere. Correct. They wouldn't show up to 2026 because there was an eighteen month delay. Or does this now change the incoming class of fall of twenty twenty four? I don't see how it could. Ms. Bickel? So, my understanding is that, it won't students will
some students may be able to claim it a little earlier than they had otherwise. But really, everything you were doing had to do with starting it in tax year 2025 and that's really what you're continuing. And typically, what happens with the tax credits is they're calculated on an accrual basis. So even though the money doesn't come in until 2026, the question is what are you assuming and what's getting built into your forecast related to the revenue impacts. Senator Kirk Meyer? I'm just very hesitant here because of the situation that we're going to still be
in next in the 2627 budget year. And we're going from a $37,000,000 liability possibly up to a $65,000,000 liability. Either one of those is high. So I guess I'm just not sure why we're doing this, why we aren't just phasing it out like we talked about. I mean, I know everybody likes it. We don't want to let it go. But, I don't know how we afford it next year. Madam Vice Chair. Thank you, Mr. Chair. When I talked to, OSPB, the thought was that we would phase out other tax credits to create more pay
fors for this. So I don't know what that is. And particularly, this is why we wanted to wait and not do it at the end of this legislative session just because with the few days that we have remaining in the session, we wouldn't have the opportunity to do that in a thoughtful way and to stakeholder it and be responsible with making those trade offs. So it just gives us more time if we do it next legislative session, find other papers to make space. And I guess if that isn't possible, then we could be done with it. But,
my ask of the committee if and, of course, everybody, you know, however you vote on this is how you vote, but, would be to give us that opportunity. And if it isn't some if it's ultimately something that we can't find enough pay fors for in terms of other tax credits to repeal, and make this be something that the state can afford, then we would just make a more informed decision next session to terminate this rather than doing it now before we've taken the time to make sure we really have exhausted our options. Senator Kirkmeyer? So thank you, Mr. Chair. So everyone would be prepared to do a phase out of other tax credits in
this current fiscal year or in the next fiscal year if we find out we I mean, we may have to pause and do a phase out of other tax credits because we're not pausing this year. We're prepared for that, just making sure because there could be issues with the senior or with the homestead exemption that I'm concerned about, just saying. Okay. Rep. Sirota and then Senator Majole. Thank you, Mr. Chair. I do share some anxiety about what we do and don't have room for.
I know that there is uncertainty here and newer information that came from CUA. It's very unclear as to why it came when it did and not when this was being worked on. I don't understand that part. But it is what it is. We are where we are. But as I stated last week, I would rather the general assembly have a deliberate discussion about what it wants its priorities to be. And to be sure, there were, I think, some very good options on the table this year. In terms of the general assembly's priority for funding that perhaps and hopefully we will
revisit next year, and there are other options as well. So I think I support Madam Vice Chair in delaying this decision so we can have a clearer conversation about what we want our priorities to be and what we have room for. Senator Mabile. So I'm happy to support it also, but I think I'll just be a little bit more blunt. This year, we had the opportunity to repurpose a bunch of tax credits, and we turned it down. And so I'm a little bit worried that next year,
we will find ourselves in similar well, we didn't, but the General Assembly did. So I'm not sure that we'll do that. And then if we find ourselves in a situation where we're just winding this down, then maybe it would have been smarter to do it now. All right. Madam Vice Chair. Thank you, Mr. Chair. I move that the committee introduce the first version, which is just the technical fixes of the bill draft for modifying higher education expenses income tax incentive. Are there any objections? Seeing none, the motion passes six-zero.
We'll start in the Senate, run when it does. Senators Bridges and Amabile will be on it with Kirk Myers as a cosponsor. In that house, it'll be, you're gonna have to fight it out. Sirota said you're you're good? Alright. Taggart and Byrd, this road is a cosponsor. Okay. Rep. Taggart? Thank you, Mr. Chair. Could we though, for the fiscal note, I just I'm sorry. I just don't believe the fiscal note that got the draft that we saw. I just don't believe that number initially.
And I think it's going to scare everybody half to death when we bring it to appropriations. No, no, that Ms. Bickel. It's a good question about exactly what's going to be reflected in the fiscal note because this bill does not create the tax credits, right? But the tax credits we've now believe are going to cost more than they were originally estimated. So I don't think it will be viewed as this bill necessarily driving the higher costs. But I presume the fiscal net will have some discussion of possibly higher estimates of
what this is actually going to cost. So let me, if I could, reframe the question. Go ahead, Rick. I'd like to know then before we present it what the foundation is for those numbers because I just don't believe them. I'm sorry. They are much too high in relationship to what I'm hearing so far from the schools actually implementing this program. I'll leave it at that. Yes. Ms. Bickel? And I would say, Representative Taggart, I mean, certainly, we don't have an LCS fiscal analyst who's saying,
oh, they're definitely this higher number, right? I think our challenge is we don't really know exactly how much they're going to cost. We have there was modeling by the Department of Higher Ed last year with one set of costs. Then we have some really intensive work with CU between CU and the department, trying to look more carefully at what the impact would be on their students at Boulder. And so I think that that analysis was probably sound if all those students chose to claim the credit, but that doesn't tell you about all the rest of the state.
I mean, I've given you sort of a very broad extrapolation of that, but is that going to be the same degree of issue at other higher ed institutions? I don't think we know. And we also don't know how many students will actually claim it. Typically, ultimately, if you keep it in place, a refundable tax credit will get claimed. But there's a certain amount of time until information spreads and folks are actually doing it. So I honestly think we don't have a great sense of what this is going to cost and probably won't have a good sense until late next year,
really like December of twenty twenty six. So my expectation is the fiscal note will might try and talk a little bit about that, but isn't going to say that this bill is driving that cost. The only cost that are going to be shown as this bill driving is additional admin costs in the Department of Revenue. All right. Thank you. Ms. Bickel? Thank you. I will just say that in the conversations I've had, the implementation of this varies greatly depending on the institution. It requires a lot of support from their financial aid office and some institutions seem
more motivated to make that work than others. So, I think that the total cost of this will vary greatly depending on how the institutions out there are taking advantage of it or not. All right. Thank you, Ms. Bickel. I hope more of them do. Next. I think that's you, Mr. Sobetsky. Chief Sobetsky. Thank you, Mr. Chair. For the record, Greg Subecky, Chief Economist, Legislative Counsel. I'm going to go up and pull up the slides that I've presented to each of you individually today, but I think you now should have two versions of this bill. One from mister Lively early this morning and one from mister Lively this afternoon.
That is the version of the bill recommended by representative Sirota. And so, mister chair, I am available for discussion as as you would like to proceed. Can you show us the charts? Sure. With the so, mister chair, going back a little bit, these are the two versions you saw this morning, the current law version where we don't know the base year amount for calculation of the CAGR growth rates, the compound annual growth rates that are used to determine the trigger amounts needed to turn on or off the tax credits.
This was the initial bill draft, the version that I presented this morning and that you received from Mr. Lively early today. This shows a FY twenty twenty three, twenty twenty four actual revenue amount as the base year for calculating the compound average annual growth rate, and then shows the outcome, which is the same for the OSPB and LCS forecasts and then, the credits being turned off in the case of the low growth scenario. As a point of comparison, this is how I've charted representative Sirota's proposal. So, to revisit that discussion from this morning,
this would use instead of an actual amount for FY 2324 revenue, this uses the March 2024 OSPB forecast for revenue subject to Tabor for FY twenty four-twenty five. This is a defined amount of money. We know what this amount is if we look at the March 2024 OSPB forecast. And this draws a new gray line because we know this amount, it's not flexible, that is higher than I think the permutations that I had presented under current law. So if you look at the screen,
I'll click back and forth between the current law calculation and the calculation in representative Sarota's bill. And what you'll notice there is that that gray line is higher than all three of the permutations I had run for current law, the OSPB forecast, the LCS forecast, and the low growth scenario. To interpret that for you a little bit, that higher line means that the state must collect more revenue under the December 2025 OSPB forecaster, must expect that it will collect more revenue under that forecast in order to turn
on the credits than in any of the three current law scenarios that I've modeled. And so this is a version of the policy that would be more likely to turn off the credits in the low growth scenario that I'd identified than in any of the current law permutations. The difference relative to the bill draft, the version that mister Lively prepared and that I presented earlier this morning, is that, first of all, that gray line is drawn from FY 2425 instead of FY 2324. That ends up not mattering.
What matters is the level of the line where that line is at. And this line is slightly lower than the version of the line that I drew for the version in the bill draft. The difference in f y 2627 is a 12,000,000 between the gray line under the bill draft that we discussed this morning and representative Serota's proposal. What that means is that there's a slight The higher likelihood under this version, representative Soreta's proposal, that the credits will become available.
I think in that scenario, based on the modeling that I've done today, they would become available in an environment where they could become available and the the general fund would have money in order to fully fund those credits. So that's my presentation of that modeling that I promised you earlier this morning, Mr. Chair. Great. Any questions? I think yes, Senator Kirk Marr. Thank you, Mr. Chair. I just want to make sure regardless of which scenario we end up with, And even if it's the March 24 OSPB forecast
regardless, I mean, because when you look at the current law to the '24 I'm just going to go off the '24 OSPB forecast. I mean and you keep looking at the low scenario like I do. I mean, we're talking about $1,000,000,000 shift. We go from $610,000,000 below in current year or in current law, sorry, not year, current law to you know, about $400,000,000 above. And I'm just looking at the OSPB one. I just wanna make sure that the homestead exemption is fully funded
first, that regardless if we have enough or we don't have enough, that there is no pause put on the homestead exemption. Chief Sybetsky. Thank you, Mr. Chairs. Thank you, Senator Kirkmeyer, for the question. So what I've done in building these slides is the horizontal bars that are labeled LCS and OSPB, that cross those revenue lines. Those are the bars that I estimate are the level of revenue needed to fully fund the budget up to the level of the rest of the cap, the maximum budget that Tabor allows the state to have,
plus the homestead exemption reimbursements. So that's how I'm presenting this for f y twenty six twenty seven. What I've presented is for both the initial bill draft and representative Sirota's version, under all of the scenarios, you would be able to fully fund the RFC cap and the homestead exemption for FY 2627. Now senator Kirkmeyer and I had a conversation earlier today about FY 2526, and about the credits that are made available for tax year 2025.
If you remember back to the March forecast, the LCS forecast does not anticipate that there will be sufficient FY 2425 revenue to have enough of a TABOR surplus to fully fund homestead reimbursements during FY 2526. So if the LCS forecast comes to pass or if revenue is lower than under the LCS forecast, then in 2526, you would not have a prior year surplus that's sufficient to fully fund those homestead exemptions. I haven't focused on that for this presentation. This presentation last week,
this morning, right now has all been about tax year 2026 later years. The homestead exemption permutation that we're talking about is revenue for FY 2425, which is not a function of what's triggered through these credits. But you're right, Senator Kirchmeyer. Under our forecast, we don't anticipate enough of a TABOR surplus in 2425 to fully fund Homestead in 2526. Rep or sorry, Senator Kirkmeyer, go ahead and keep going. Thank you. And I appreciate that and thank you for explaining that, again to me and everyone else.
I appreciate that. I just want to make sure that regardless of what path we move forward on, that we do not pause the Homestead Exemption Act because it's the easiest thing to pause. I just don't want that to happen because it's not a retroactive kind of thing. It's not based on a trigger. It's based on, one, it's in our constitution. And the Homestead Exemption Act is, it's been around since 1992, somewhere in there, maybe not that long, but it's been around quite a while. And I just want to make sure under no circumstance would we pause it because
we don't have enough money to pay for the triggers or pay for the tax credits, any of the tax credits because, I mean, I get it. I understand. I mean, we've I think we all heard the discussion or we've had discussions probably about pausing other tax credits, but that doesn't necessarily help us in current years unless we catch it early enough, I guess. I don't know. I mean, it just means we're telling somebody they aren't getting the the tax credit they thought they were going to get. I just want to make sure that we always fund no pause to the homestead exemption,
that that should be our first deal before anything else. And I just want language in the bill that says that. Senator Mabile. So what you just said about the Homestead exemption for twenty five-twenty six, that we don't think we will have enough money to fully fund that above the Rep C cap. Is that right? But then how does that how does what happens with these tax credits? Do they get fully funded in 'twenty five, 'twenty six? Chief Sebesky. Thank you, Mr. Chair. Thank you, Senator Amabile, Senator Kirkmeyer for the discussion. I'm going to take a step back and make sure that we're all on the
same page. Everything that I presented to you last week, this morning, right now is about the availability of these tax credits, the family affordability credit and the earned income tax credit for tax year 2026. That isn't actually a function of the homestead at all. The reason why homestead is a word that appears on this chart is because I recognize that the way that the budget is built right now is that TABOR puts a limit on the amount of money that the state can collect and retain and
spend or save. Revenue over that limit has to be refunded, but the way that you've chosen to administer part of that refund is by reimbursing local governments for their lost revenue as a result of the homestead exemptions. And you do that and use that money to trade off with future year general fund obligations for those reimbursements that would otherwise arise. So as a piece of history that might be helpful, that wasn't always the case. Before 2017, Homestead, to senator Kirk Myers' point, goes back to 02/2001. And before 02/2017,
Homestead exemption reimbursements were a general fund budget obligation. They did not come from the TABOR surplus. And if the state, in some year, did not collect a TABOR surplus, under current law, you would be required to pay homestead exemption reimbursements from the general fund. That would be a, you know, appropriation, or an informational appropriation that would appear in the treasury budget in, Senator Kirchmeyer raised a point about, do these credits stop Homestead from being funded? By default, no. Homestead is required to be funded. It's a constitutional requirement. The the constitution allows the general assembly to reduce the level of homestead exemptions.
But so long as there is a homestead exemption and you have not reduced it, the constitution requires you to reimburse locals for it. You can't cause locals to take the revenue loss without reimbursing them. The constitution doesn't allow for that. So by default, these triggers don't ever turn off homestead. Turning off homestead would be a policy decision that you all would make. Okay. Now I think I'm getting I think I'm getting that. Okay. Because that wasn't my question at all. But, yes, go ahead. Your question was about our forecast and we us not having enough money to fund
homestead under the the oh, okay. Yeah. So my question is thank you. Do we have enough money to fund these tax credits in 'twenty five, 'twenty six? I know you said tax year 'twenty six, but it does affect twenty five-twenty six fiscal year. That's my question. Or will these will we end up having to fund these tax credits out of the general fund? Senator Amable, under both the current law LCS forecast and the current law OSPB forecast I said
current law under the March 2025 LCS and OSPB forecast, you have enough money to fully fund these credits without causing revenue to dip below the Ref C cap and the amount that you need for Homestead for FY twenty twenty five-twenty six. Okay. Thank you. Rick Zacker? I'm confused though. Geez, so bestie, you did say there was a risk for 2425. Did I mishear what you said? Because I thought I heard you say there was a risk for 2425. Have enough revenue for 2526. I thought I heard you say specifically 2425.
Chief Sevesty. Thank you. Yeah. Thank you, mister chair. Representative Tiger, yes. And that's in our forecast. So that's that we briefed you on that back in March when we presented the LCS forecast. The LCS forecast anticipates that revenue for FY 2425 will not be sufficient to fully fund the FY twenty twenty five, twenty twenty six reimbursements for Homesmith. That's a major difference between the March LCS forecast and the March OSPB forecast that you chose to budget to. None of that is really at issue in this bill in the sense that both
the initial version of this bill and representative Sarota's alternative proposal for this bill are only about the triggers that determine the availability of the credits in tax year 2026. Revenue that we forego in tax year 2026 as a result of these tax credits does not impact revenue collections for FY twenty four-twenty five. And so, for that reason, there is a possibility that FY twenty four-twenty five revenue will be below the amount that's needed to fully fund Homestead, that is a feature of current law and the March 2025 LCS forecast,
not a feature of how these triggers work with respect to the availability of the credits in future years. Yes. But just the way you said that, it sounds like these two very significant tax credits, I'm just speaking about '24 and '20 '5, play a priority over the homestead refunds. Is that what I'm hearing? Representative Taggart, I wouldn't put it that way. Okay. Both the credits and the reimbursements for Homestead are in current law. So they're both on. Neither one is taking precedent over the other.
If you had budgeted to the LCS forecast, then you would have had less budget space because our forecast would have identified a need for you to make general fund expenditures in f y twenty five, twenty six to fund homestead exemption reimbursements. And in order to balance to our forecast, you would have needed to make other cuts in order to fund those reimbursements and the other demands that our forecast would have put on your budget rather than the OSPB forecast that you budgeted to.
The reason I'm putting it that way is I don't think it would be fair for me to anticipate that the way that you would have handled that is by cutting Homestead. Homestead is fully funded for tax year 2025, which is the year we're talking about. And even if the LCS forecast comes to pass, even if that's what revenue collections actually are, unless you were to convene in a special session, everyone who's getting homestead is getting it for 2025 because by the time you come back in 2026, you won't be able to change that. I understand that. But here's my concern is,
maybe I'm the only one that has this concern. If Homestead doesn't, isn't in the priority position From this point forward, the tax credits at some point could in fact, from the way I'm interpreting things, could in fact be the priority in terms of funding over the Homestead reimbursements. And that scares me. So maybe I'm misinterpreting this, but I'm worried that this could happen again in the future. So,
Representative Tigert, one of the reasons why I brought this issue to the committee's attention is because I think the possibility that these credits could pinch your budget and cause you to choose to make cuts to Homestead or any of the other budget lines that you need to prioritize is because I think that the triggers that are in place in current law don't forestall that possibility. I think in either version of the bill, the version that I presented this morning, the version that representative Serreta requested that I analyze over the course of the day to day,
that possibility becomes far less likely because the credits become much more difficult to turn on than they are under current law. To go back to this morning's conversation, the risk that I see so these dotted lines that are on the chart, the lower that line is, the more likely it is that the credits are turned on. The higher that line is, the more difficult it is for the credits to be turned on. Because current law says use the FY 2425 actual amount to set that line,
and because at the time that that law was written, we didn't know what that $24.25 actual amount was going to be, there is a risk that that red line ends up being at a low enough level that you can turn on the full amounts of the credits when those credits dip into the available space that you need to write your appropriations and fund things like the Homestead Exemption Program. And so I wanted to bring to your attention that if you want the triggers to turn off the credits in an environment like that, you would need to strengthen the way that the triggers operate. And I think that,
in my opinion, both versions of this bill accomplish that to a level that would make an interaction where this is directly competing with Homestead less likely. Now, I'll say less likely and not non existent because in all cases, the availability of these credits depends on a forecast, not the December or the March 2024 OSBB forecast, but a future December forecast about how revenue is going to look in the future. And if that forecast is incorrect, then there's still the possibility that the credits can be turned on when there's not enough money for them.
That is less likely under any version of this bill than under current law. Websterretta. Thank you, Mr. Chair. Well, I will just, read up my request for the version that I have requested. I appreciate Senator Kirkmeyer's desire to state an interest in preservation of homestead. I don't think that fits under the title of the bill or the purpose of this bill nor do I think it is a thing necessarily that well, I mean, to Mr.
Sovetsky's point, it becomes a question of if we were ever in such a scenario, whether or not it is the priority of the general assembly, which in my limited time in the legislature, we have made a priority. I can't remember when it was, but there was a discussion about what to do about it. I think it must have been in 2020 when we were in that particular situation. And as long as I have been here, this has been a priority of the General Assembly to ensure we are able to provide for. And, I anticipate we will be doing it into the future. But, I would like to keep the confines of this bill
to simply addressing, the functionality of the CAGR, which I think this second version does. And, I don't know if this beautifully drafted legislative declaration is all actually necessary or if even that we might trim back. But, I guess this is the draft that I would prefer to, that I would be willing to introduce. So given the fact that right now for 'twenty four, 'twenty five, we're $80,000,000 short to fund the Homestead Exemption. That's what I learned this morning. That's in this current year.
Now we think maybe that could come out in the wash because of the way that we have been under refunding Tabor Surplus for like the last three years, but it may not. And when we're talking about the availability of income tax credits, I want that availability to be after we have funded the Homestead Exemption. I don't want it to be put in a I don't want it to be bumped in priority or however we're going to say it. I want the Homestead Exemption funded. I mean, it came before all these tax credits. Understand the whole thing with the tax credits. If we were to use 23,
20 four, it's even less likely that we would have the issue. But if we're going to use 24, it's $112,000,000 more It's $112,000,000 difference approximately. And, we I don't know. I'm just worried that we would end up doing that. And, I don't know what the discussion was with regard to the Homestead Exemption Act and regard to all these tax credits, but I'm thinking at some point, someone thought, wow, we could end up funding these things because we're a year behind before we can even shut them off, and it could end up messing with our general fund revenues to fund the Homestead
Exemption Act. And we're in a situation where we're not going to have unlimited general fund next year. We don't have that this year. We don't have it next year, and it's even worse. Next year will be worse. So we're asked being asked to go to a 'twenty four year so that 'twenty four forecast base year instead of 'twenty three, 'twenty four. Even though it's pretty close, it still gives more there I guess, there is less likelihood that we would not be able to fund the tax credits.
Hopefully, I said that correctly because this gets really confusing. I just wanna make sure on the Homestead Exemption. I mean, the thing I'll say on that is that I think this JBC, this legislature, has made it very clear that Homestead, the Homestead property tax exemption is a major priority. That essentially, I think that gets funded before maybe anything else in the budget, perhaps, maybe excluding K-twelve public education. I think that I think we would all be in major trouble with our constituents, major trouble with our local electeds.
I don't see a world where we don't fund the senior property homestead tax exemption. This bill right here makes it more likely that we'll be able to do that, without dipping into our General Fund. It makes it a little less likely compared to what it is that Chief Sevetsky originally brought to us, but like marginally so. If we all liked the other idea, this is almost exactly the same thing but a slightly different starting point. So I think the question really is do we want to make it less likely that we have to dip in a general fund in order to pay for the
senior property homestead tax exemption and move this bill forward? Or do we leave current law sitting where it is and make it far more likely that we'll be in a terrible situation in the future, funding senior property homestead tax exemption from the general fund and falling pretty far short under the TABOR cap in the general fund, meaning we'd have to make a lot of other really painful cuts at the same time. So I think in the interest of preserving the senior property homestead tax exemption and the general fund, which I think is probably putting me in legal jeopardy for even saying that in relation to this bill. However, I think we should run this bill,
alter that starting point, and the JVC is the most likely task to getting that kind of bill done. And we can talk a lot about how we're doing this to preserve the senior property homestead tax exemption at every step along the way. Senator Kirkbauer? Well then, if that's truly everyone's thought, then I don't think it would be an issue to say that as long as the family tax credit is on, the homestead exemption must also be fully funded. I don't think that folks are comfortable with putting that in the bill. We need six. Do you need six for all of it? Yes. Yes. We can leave it out,
please. Senator Majble. Sure. I'm confused because I thought the senior homestead exemption was in the constitution and we just have to pay it one way or another or is there some way for us to not pay it? Yeah, we can not. We can set the slider to zero. Mr. Sibetsky. Thank you, Mr. Chair. Senator Amabile, the Chair is correct. Homestead is in the Constitution. The Constitution permits the General Assembly to change the amount of a person's home that is exempt from taxation to any level, including zero.
There are six years in the period that Homestead has been in the constitution for for which the general assembly has set that to zero, three following the two thousand and one recession, three following the two thousand and eight recession. Some of the discussion in 2017 around making Homestead a TABOR refund mechanism was essentially to make it such that TABOR would never stop the general assembly from fully funding Homestead because in a world where you had a TABOR surplus,
revenue over the limit would be available to be refunded to taxpayers using this mechanism. In a recessionary scenario, you've only been there once since 2017. That was COVID, and, that was a priority that was preserved as, as a priority item for the legislature at that time. Alright. Where are we, committee? And vice chair? I mean, I like the fact that Rep Saroda's proposal isn't that much different than the approach that Chief Sevetsky brought forward. I also don't have a problem with making clear our intent that we also prioritize
funding of the senior homestead exemption. I think that's fine, and I don't think there's damage to what we're trying to do here with making sure we've got a responsible CAGR that works for us. But we can keep talking about that. That's right on that. Senator Mavalley. I'm just wondering if Senator Kirkmeyer would require this language about the homestead exemption in either version of the bill that we saw today or just in this most recent version? Senator Kimmer. In either version. Yes. Okay. So it's not really about Rep Sirota's version versus the earlier version.
You would want that in either one. Yes. I mean, I feel like that is relitigating these tax exemptions and is relitigating what that CAGR is in a pretty significant way. And the whole reason we're running this bill is to make sure that there is room for us to not make major cuts to the general fund and keep the senior property homestead tax exemption intact. So I think if we don't run this, then it's more likely we're going to be in a really tough situation, where we do end up having to look seriously at cutting the senior property homestead
tax exemption. And I'd rather not do that. But I also don't think that it's appropriate right now to entirely relitigate when these turn on and when these don't, especially because we can't build that into the prediction model at the end of the day. Like, that is it's not a it's not something we'll know at the time we make these decisions. Senator Kirk Martin? Well, I'm not sure what it is that you believe we're relitigating. And I thought the understanding was with these bills is that we wanted to make sure that we weren't or with this legislation, that we weren't gonna use general fund for the tax credits. So we're trying to fix that. And at the same time,
I just want to make sure that we also don't, do something negative to the Homestead Exemption where we don't fund it because we're so busy fixing this. So I don't know what you're talking about when you're saying we're relitigating, but I don't know why it's such a heartburn to basically say that we our goal is to fund both, right, but not necessarily out of the general fund. We're We're trying not to fund either of them out of the general fund. And the tax credits came after the Homestead Exemption stuff, not before it.
So I just want to make sure that we aren't going to get ourselves in a scenario where we put the tax credits above the homestead exemption because it has been put on pause both in the Owens administration and I believe it was in the Hickenlooper administration. They put it on pause. And I don't want to be on the joint budget committee when we say we have to put it on pause. So I think there just needs to be an understanding that our goal is, is that we are not going to use general fund for the tax credits, and I think we're only talking about the family tax credit here. We're not even talking about the earned income tax credit, are we?
Is there a Yes, we're talking about both? Okay. And, anyways, that we don't want to use general fund for either. That was not the purpose of either. Yes. And I think that's exactly the purpose of this bill. I think this bill makes it less likely that we'll have to use general fund for either. I think the concern is saying that, is putting something about senior property homestead tax exemption explicitly in this bill when it is not not the subject of the bill, if not what we're talking about. So I think we the purpose of this is exactly what you laid out. And I think we can make it very clear that that is why we're doing
this. We're passing this bill in order to protect senior property homestead tax exemption and to protect the general fund from these turning on in a situation when we can't afford it. Great to have you put that kind of language in here. Brook Taggart. Thank you, Mr. Chair. If that's the case, can we not just at least put it in the legislative declaration so that it's not in the bill or the act itself, but it recognizes the importance by way of being in the declaration. Well, we're drafting the bill right now.
Mr. Lively, could you join us for a sec? My understanding of the ledge deck is that this is essentially man, this the fact that we have to have this conversation on the mic is one that I am deeply nervous about. So I think I'm maybe going to not have it and just say instead, would something like that fit in a legislative declaration in a bill like this? Mr. Lively. Thank you, Mr. Chair. It could depend on how you wanted to characterize your goals in making this change
in the bill. Yes. I believe I understand what you're saying. Yes, JBC will stand in a brief recess. JVC is back and, we'll stand at a senatorial five. JBC is back. Oh, wait. It was a senatorial five, so we don't have to do that. Oh, well. We are a we are back either way, gavel or no gavel. Madam Vice Chair? I move that the Committee introduce the current bill draft before us, tax credit availability. Are there any objections? Seeing none, the motion passes six-zero. It will start in the Senate and run as soon as it can.
It will be sponsored by Senators Kirk, Myer and Bridges, with the Mabile cosponsoring. And in the House, it'll be Sirota and Taggart with Byrd cosponsoring. And you have permission to make technical changes, as we already said? Any questions? Anything? Yes. Mr. Lively? Thank you, Mr. Chair. Just to confirm, the version in front of you is the 0.03 that you're talking about, correct? The one with Representative Sirota's suggestions? Yes. The Sirota version. Two drafts today, just wanted to make sure. Indeed. Latest of the versions. The one with that line. That's point o two.
Point o two. So point o two. Sort of like you're going into surgery to get a limb cut off, and they want to mark and cut the right limb. Right? Alright. Seeing no further business before the joint budget committee, that is that might be the last on the record comment for the budget committee this session. Do we yeah. We don't have anything else, do we? Well, I hate to jinx it, but that surgery comment is, perhaps the last comment for this budget season. It wasn't on the mic. Well, I think people could hear it. Alright. Anything else? Feels great. Alright.
With that, the joint budget committee will stand in an ongoing recess.