The Axiom Report by Paul Swansen
The Taxpayer Bill of Rights (TABOR) is a concept advocated by conservative and free market libertarian groups. TABOR is promoted as a way of limiting the growth of government. It is not a charter of rights but a provision requiring that increases in overall tax revenue be tied to inflation and population increases unless larger increases are approved by referendum.
Colorado has the most well known instance of TABOR legislation. In 1992, the voters of Colorado approved a measure which amended Article X of the Colorado Constitution that restricts revenues for all levels of government including state, local, and schools. Under TABOR, state and local governments can’t raise tax rates without voter approval. Those same state and local governments can’t spend revenues collected under existing tax rates if revenues grow faster than the rate of inflation and population growth, without voter approval. Revenues in excess of the TABOR limit, also known as a “TABOR surplus,” must be refunded to taxpayers, unless voters approve a revenue change as an offset in a referendum. Continue reading
Oct. 28–This November, the Taxpayer’s Bill of Rights turns 20 years old.
TABOR, as it is commonly called, is beloved by those who want to limit government. Its various provisions are broad and arcane, but the most well-known one — which many citizens love — prohibits Colorado governments, from the state on down to school districts, from raising taxes without a vote of the people.
TABOR has also become the bane of many Democrats who want to protect public services. Depending on who you talk to, TABOR has either been a great ally of Coloradans or their worst enemy.
TABOR is the most restrictive government fiscal limitation in the country and has had perhaps the biggest impact on Colorado of any ballot measure in state history, several experts said. It amended the state Constitution, and it can’t be repealed without getting voters to OK at least two ballot measures. Continue reading
Oct. 31–Critics are using the 20th anniversary of the Taxpayer’s Bill of Rights to bash the voter-approved constitutional amendment as something devastating to our state. They talk as if government budgets and the economy are one in the same. Fund governments more, and we’re good to go. Fund them less, and it somehow amounts to an economic crisis.
Take, for example, comments in a Monday Gazette news story by Wade Buchanan, president of the nonprofit Bell Policy Center. Buchanan explained how TABOR causes a “ratchet effect.” TABOR limits growth in government revenues and spending with a formula that is based on spending in prior years. When recession strikes, government spending and revenues decrease. When the economy recovers, governments are limited by a formula that ties them to recession-era revenues and spending.
Advocates of less government think it’s a brilliant way of achieving their goal. Politicians and bureaucrats tend to hate the ratchet, as it prevents local governments — in jurisdictions where taxpayers have not voted to opt out of TABOR restrictions — from benefiting from economic recovery. Continue reading
Current and former lawmakers are taking the Taxpayer Bill of Rights to court for a second opinion.
Workers install a large U.S. flag and a Colorado State Seal on the west side of the Capitol in Denver on Friday, January 7, 2011, as part of the decoration for the inauguration of Governor-elect John Hickenlooper.
Many states have provisions designed to limit the amount of taxes their legislatures can raise, but only Colorado has gone so far as to pass the Taxpayer Bill of Rights. Known as TABOR, Colorado’s unique constellation of confusing laws prevents the state legislature from raising taxes without public approval and caps the amount the government can spend in a way that’s designed to shrink it over time. All levels of government—city, county, and state—are limited in what they can spend by a complicated formula, which basically indexes revenue to inflation plus population growth. If the tax revenues the state and local governments collect in any given year are higher than the cap, which happens in good economic times or when there is an influx of new residents, states and cities are required by law to refund taxpayers. Over the years, more than 80 cities have passed local referendums to relieve their governments from some of the burdens of TABOR. Last week, Denver voters passed, by a margin of 74 percent to 26 percent, a referendum that allows the city to keep the surplus money it has already collected and spend it. The referendum they voted for is called “de-Brucing,” named after the law’s anti-tax activist Douglas Bruce. (On the state level, a de-Brucing referendum passed in 2005.) The city argued that without de-Brucing, it would no longer be able to provide basic city services; it hadn’t trained a new firefighter or police officer class in four years. Continue reading
Centennial will ask voters in November to exempt the city from having to refund excess revenue it takes in as required by the Taxpayer’s Bill of Rights.
TABOR requires local governments to send out refunds to its taxpayers when revenues exceed a certain amount. The intent of the law is to limit the growth of government revenues.
Centennial voters approved an exemption for the city in 2006 for 65 percent of its revenue and the remaining 35 percent temporarily until the end of 2013.
Centennial City Attorney Bob Widner said that 35 percent is made up of fees and taxes, such as the open-space tax, franchise fees and highway-use tax.
While most of it is not earmarked for specific uses and is often used for street repair, the open-space tax money must be used on open space, which he said creates a problem if the city collects too much of that because then it must refund money to taxpayers from another part of the budget. Continue reading