State government takes small slice of tax revenue

David Milstead, Rocky Mountain News

Published October 17, 2006 at midnight

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If money is power, then look not to the Capitol for the source of strength in Colorado.

Colorado's state government nabs a smaller share of statewide tax dollars than nearly anywhere else in the U.S., according to the Center for Tax Policy.

The group's annual report on state taxes and spending says Colorado ranked 48th in the share of state and local tax revenues going to state government. It ranked third in receipts collected by local governments.

Just 48.4 percent of the $14.6 billion in Colorado tax collections went to state government.

The U.S. average is 58.7 percent, with Arkansas and Hawaii's state governments grabbing 80 percent.

The flip side is that Colorado local governments take 51.6 of tax revenue, with only New York, at 54.8 percent, and Texas, at 52.5 percent, taking more.

Why?

It's the Colorado sales tax. "The ability of Colorado local governments to collect significant revenue from sales taxes helps to explain the fiscal dichotomy," the group says.

It also flows to Coloradans' wallets.

This tax structure means Colorado ranks in the bottom three for most state taxes collected per capita, but local-government taxes put Colorado in the top 10, per capita.

Put the two together and Colorado ranks 26th in per capita state and local taxes at $3,169.

But with Colorado one of the nation's wealthier states, taxes of $87.74 per $1,000 of income ranks Colorado 47th out of the 50 states and the District of Columbia.

The Center For Tax Policy, which has a partnership with the Daniels College of Business at the University of Denver, describes itself as a "watchdog" for taxpayer interests.

David Milstead is finance editor of the Rocky Mountain News. He can be reached at milstead@RockyMountainNews.com or 303-954-2648.

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