Monday, November 28 2022

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Are you one of them?


Key points

  • Colorado residents could be getting good paychecks in the coming months.
  • Single filers could receive $400 in return, while joint filers could get a salary of $800.

Many people today are struggling with the rising cost of living. And the Coloradons are no exception.

Although the state has recovered well from the economic blow of the pandemic, the cost of living in the state has increased since last year, as it has across the country. Meanwhile, in recent years, the cost of housing in popular metropolitan areas like Denver has skyrocketed, putting even more strain on residents’ budgets.

But there is relief in sight. This summer, Colorado residents can look forward to a nice payday courtesy of the state. And it could help many people shore up their finances at a time when inflation is raging and forcing consumers to rack up credit card debt just to stay afloat.

A good payday is looming

This week, Colorado Governor Jared Polis announced that state residents will receive a $400 summer discount. Single filers will receive $400, while married filers jointly will receive $800.

The rebate is available to anyone who files a 2021 state tax return by May 31, 2022 and is a full-time resident of the state. In total, that means more than 3 million people could be lining up for the money, which is expected to arrive in the mail in August or September. And those who qualify for a discount will get it automatically.

Colorado is experiencing the fifth fastest economic rebound in the nation and has recovered more than 100% of the jobs lost during the pandemic. Today, the state’s unemployment rate sits at 3.7%, the lowest level since the pandemic began. Due to the state’s strong economic performance, there is a surplus of funds available that will allow payments of $400 or $800 to be made within a few months.

An imperfect system?

On the one hand, the fact that Colorado residents are being paid a salary due to a budget surplus is a good thing. This allows individuals to spend that money however they want or need. On the other hand, giving that money to the masses means Colorado can’t invest that money in things like schools, infrastructure, and other projects that could improve residents’ quality of life.

To be clear, payments made this summer are not being sent out on a whim. Rather, they are due to the Taxpayer Bill of Rights, or TABOR, an amendment to the Colorado Constitution enacted by voters in 1992 that limits the amount of revenue the state is allowed to keep and spend. But Colorado residents are divided on whether it is better for the state to return excess money to residents or spend it on infrastructure, education and social programs.

Not the first state to repay a surplus

Colorado isn’t the only state planning to give residents a discount this year. Due to a comparable surplus, approximately 4.3 million Indiana residents will be in line for a $125 payment this year as well.

At a time when so many people are struggling with bills, these deals can be celebrated. But it definitely raises the question of whether giving those little paydays is a good thing or not.

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