New Williams Institute Study Finds Civil Unions in Colorado Would Boost State Budget by Nearly $5 Million

A new research study released by the Williams Institute at UCLA School of Law shows that allowing same-sex and different-sex couples to enter civil unions in Colorado would boost the state budget by nearly $5 million over three years. This net impact will be the result of savings in expenditures on state means-tested public benefit programs, an increase in state license fees, and sales tax revenues.

Below, you’ll find the Executive Summary of the report and a link to download the full results of the study.

Recognizing civil unions between same-sex partners in Colorado would positively impact the state budget by nearly $5 million over three years.

This analysis by UCLA’s Williams Institute estimates the impact on Colorado’s state budget of introducing civil union rights for same-sex and different-sex couples. Using the best data available, we estimate that a law recognizing civil unions for same-sex and different-sex partners will garner the State $4.8 million over the three years following the law’s implementation. The benefits accrued will change every year, as the number of couples entering civil unions each year will change. The State will gain approximately $1.4 million in the first year after offering these rights (Year 1), $1.6 million in the second year (Year 2), and $1.8 million in the third year (Year 3). This net impact will be the result of savings in expenditures on state means-tested public benefit programs, an increase in state license fees, and sales tax revenues.

We base this analysis on the following estimates:

Approximately 3,500 same-sex couples and 2,500 different-sex couples would form civil unions that would be recognized in Colorado in the first three years.

According to 2009 American Community Survey data, Colorado has 12,558 same-sex couples and 90,282 different-sex unmarried couples. Based on the experiences of other states, we estimate that 28 percent of same-sex couples and 2.8 percent of different-sex couples will enter a civil union over the next three years. For same-sex couples, 1,899 will enter a civil union in Year 1, 914 will enter a civil union in Year 2 and 703 will enter a civil union in Year 3. For different-sex couples, 1,354 will enter a civil union in Year 1, 652 will enter a civil union in Year 2, and 501 will enter a civil union in Year 3. Over a three-year period, we predict that the State will recognize the civil unions of 3,516 same-sex couples and 2,507 different-sex couples.

Sales tax revenues will rise as a result of new spending on civil union ceremonies.

We predict that Colorado’s same-sex couples would spend nearly $19 million on civil union ceremonies over three years. Out of state guests would generate an additional $6 million in spending, including accommodations. This spending would generate state sales tax revenues of nearly $726,000 over three years. We do not estimate the impact on Colorado sales tax for different-sex couples because the demand for civil union ceremonies in this population is uncertain. However, if different-sex couples held ceremonies similar to those of same-sex couples, the State could realize an additional $517,000 in sales tax revenues over three years.

The cost of State employee healthcare and dental benefits will increase.

Colorado already provides same-sex domestic partners state healthcare and dental benefits. However, the State would see increased expenditures on healthcare and dental premium contributions for different-sex couples who enter civil unions. We estimate the increased cost to the State from different-sex couples enrolling partners to their state benefits plans is approximately $980,000 over three years.

State expenditures on means-tested public benefits programs will fall.

Civil unions for same-sex and different-sex couples would reduce the State’s public assistance expenditures. Just as married spouses are obligated to provide for one another’s basic needs, a same-sex or different-sex partner’s income and assets would be included in assessing an individual’s eligibility for means-tested public benefits after entering a civil union. This will reduce the number of people eligible for such benefits. We estimate that civil unions for same-sex and different-sex couples will save the State over $4.8 million in its spending on public benefit programs over three years, or $1.1 million in Year 1, $1.7 million in Year 2, and $2.1 million in Year 3.

Colorado will receive increased revenue from civil union license fees.

Civil union licenses would require the same fee as a marriage license in Colorado, currently $30. Thus, civil unions between same-sex and different-sex partners would generate over $180,600 from these fees over three years.

To read the full report from the Williams Institute, click here.