TABOR constitutional amendments severely limit states’ revenues and their ability to make prudent budget choices. Colorado, the only state to adopt the restrictive measure, has suffered a worsened business climate under TABOR and has failed to meet its education and public health commitments to its residents…
This claim, above, was posted by the Center on Budget and Policy Priorities (CBPP) on their website two years ago. The article continues:
A Taxpayer Bill of Rights or TABOR is a constitutional measure that limits the annual growth in state (and sometimes local) revenues or spending to the sum of the annual inflation rate and the annual percentage change in the state’s population. (For example, if the general inflation rate is 2 percent and the state’s population grows by 1 percent, state revenue available for expenditures can increase by 3 percent. The balance must be refunded to taxpayers)…
… Colorado enacted the nation’s only TABOR in 1992 but suspended it for five years in 2005 [via Referendum C] in response to a sharp decline in public services. Though powerful special interests have promoted TABOR proposals in at least 30 states since 2004, no other states have adopted it…
Last month, a federal court — The 10th US Circuit Court of Appeals — reversed a lower court ruling and granted 10 government agencies standing to file a lawsuit seeking to overturn Colorado’s TABOR amendment on constitutional grounds. In a 2-1 decision, the appeals court ruled that the plaintiffs — eight school boards, plus the Boulder County Commissioners and the Gunnison Recreation District — do in fact have legal standing to challenge TABOR. The appeals court did not rule on the merits of the lawsuit.
From that court ruling:
This case is rife with difficult issues, and we applaud the district court for its attempts to “don waders” and generate some cognizable structure out of the sludge. Nevertheless, we conclude that it could not properly reach its conclusions at this stage of litigation. Because we hold that the political subdivision plaintiffs are not barred by standing requirements, we reverse.
I appreciate the reference to “sludge” in this paragraph — ‘sludge’ being the solid matter remaining in a sewer treatment pool after the clean water has been removed from the mix. As suggested, the district court may have indeed needed “waders” in this court case. The case was originally filed by a single Colorado legislator and was initially rejected by the courts — but several school districts, a county commission and a recreation district were added to the list of plaintiffs in an attempt to give the suit legal standing.
The trick apparently worked.
The Center on Budget and Public Policy (quoted above) argues, meanwhile, that TABOR has caused Colorado to suffer a “worsened business climate.”
US News & World Report begs to differ, according to an article they posted in May 2019:
Since [the Great Recession] unemployment has fallen below 5 percent nationally, though the recovery hasn’t been consistent nationwide. The growth of the nation’s gross domestic product, 3.2 percent on an annualized basis in the first quarter of 2019, was above that of the previous period.
Colorado is the top state for economy. It’s followed by Utah, and West Coast states Washington, California and Oregon to round out the top five. Four of the 10 states with the strongest economies also rank among the top 10 Best States overall…
Or we can refer to yesterday’s report coming from Colorado Secretary of State Jena Griswold, announcing her Second Quarter Economic Indicators Report:
“Colorado’s economy is performing well despite slower growth nationally,” said Secretary Jena Griswold. “Employment in our state continues its upward trend, and we hope to see continued growth in the next two quarters…”
Meanwhile, the State of Colorado got into the TABOR reform game this year. The Democratic-controlled legislature placed a ballot measure on the upcoming November election — Referendum CC — asking voters to allow the state to retain excess tax revenue — permanently. That measure was pushed by House Speaker KC Becker (D-District 13) among others.
From an article published by Colorado Public Radio:
TABOR sets an annual income limit that can trigger tax refunds based on a formula that involves population and inflation. It’s blamed by many Democrats for contributing to a $9 billion backlog in road projects and a multi-million-dollar debt to schools — all at a time when Colorado’s economy is one of the nation’s strongest.
Colorado Republicans, in contrast, credit TABOR and its tax limits for the strong economy. Assistant House Minority Leader Kevin Van Winkle called TABOR “an important safeguard against government overreach,” in a statement opposing the ballot proposal.
Other TABOR opponents are trying to get a separate measure on the 2020 ballot that repeals the 1992 constitutional amendment in its entirety, as we discussed in Parts One through Three.
We note that all of the above arguments focus on the impacts of TABOR on state government revenues, which — as we noted previously — have not been greatly affected by TABOR since 2005. According to the state’s own “New Legislator Orientation Information Paper” published by the Colorado Legislative Staff in December 2018 (you can download that document here) almost 70% of the state’s 2016-2017 budget was “exempt” from TABOR limits, due in part to the increased use of “state-run enterprises” which are simply clever ways to side-step TABOR limits.
Those exemptions include “enterprises” like Colorado Department of Transportation’s High Performance Transportation Enterprise (HPTE) and the Statewide Bridge Enterprise. Highway, health care, and education funding coming from federal sources is likewise exempt from TABOR limits.
But TABOR also limits local government. When the Archuleta County Board of County Commissioners wanted to increase the local sales tax by one percent — an increase that might have generated more than $50 million exclusively for “Justice Center Capital Improvements” — TABOR required them to obtain taxpayer approval prior to increasing the tax rate. The taxpayers narrowly defeated that ballot proposal… twice.
Then the BOCC — Ronnie Maez, Steve Wadley and Alvin Schaaf — went ahead and borrowed the money for their new jail anyway, without voter approval, using a clever financial scheme well-loved by the banking industry: the Certificates of Participation (COP) Scheme. Final cost to the taxpayers, however, was considerably less than $50 million.
Repeal TABOR? While we have unethical people running our local governments?
Thanks, but no thanks.