(The Center Square) – A new study says Colorado's $1.7 billion surplus under the Taxpayer's Bill of Rights could "buy down" the income tax rate to 3.81 percent, down from the current 4.40 percent.

The buydown could be accomplished without negatively impacting the current state budget or state spending, according to the  Independence Institute, which authored the study.

When Colorado voters approved TABOR in 1992, it limited growth in state government spending by calculating the rate of population growth plus inflation in the calendar year ending six months before the start of the fiscal year. However, the free-market think tank said policymakers and Colorado’s courts weakened TABOR’s intent.

“Every year our legislature finds more ways to skirt TABOR and spend money beyond the limits set by the people of Colorado,” Jon Caldara, president of the Independence Institute, said in a statement announcing the 14-page study. “They call taxes ‘fees’ and put them into state-run enterprises to avoid TABOR and to avoid asking voters for consent.”

According to the study, the percentage of the state budget subject to the state constitution’s spending limit decreased from 67 percent to 46 percent since TABOR became law.

Colorado Governor Jared Polis agrees Coloradans should be keeping more of their earnings.

"If there is an excess in tax revenues above population growth and inflation, as defined by TABOR, that means tax rates should have been lower but were not,” Polis wrote in an opinion piece in National Review. “The law serves as a signal that tax rates have been too high. The proper response to this signal is not to have it keep signaling, but to get the message and cut tax rates permanently."

During last month’s special session of the General Assembly, a Republican effort to reduce the income tax to 4 percent was defeated in committee along party lines.

The study estimates Colorado’s surplus this year would have been $4.2 billion if legislators hadn’t evaded the spending limits. The amount could have reduced the income tax rate by 1.44 percentage points to 2.96 percent.

“The cumulative less spending over the last decade of $16.3 billion could have substantially reduced income taxes over time,” the report said.

The organization proposes the “Sustainable Colorado Budget.” It would limit spending of state funds, excluding federal funds, at the rate of population growth plus inflation. For the current fiscal year, legislators budgeted $4.2 billion more in all state funds than if it limited the increase to population growth plus inflation. The amount equates to $800 per person or $3,300 for a family of four.

“Under the Sustainable Colorado Budget, the state can rein in excessive spending, which is the ultimate burden of government, and use the resulting surplus taxpayer money to put income tax rates on a path to zero,” Vance Ginn, president of Ginn Economic Consulting and co-author of the study, said in a statement.