- allow the state to keep and spend all revenue it collects through June 30, 2026;
- raise the limit on the amount the state may keep and spend beginning July 1, 2026; and
- require that any money the state keeps over its existing limit be spent on education, transportation projects, mental health services, and senior services, rather than refunding the money to taxpayers.
Over two decades have passed since Colorado voters adopted The Taxpayer’s Bill of Rights in 1992. TABOR allows government spending to grow each year at the rate of inflation-plus-population. Government can increase faster whenever voters consent. Likewise, tax rates can be increased whenever voters consent. This Issue Paper analyzes TABOR’s effect on state government spending and taxes by examining three decades: The 1983-92 pre-TABOR decade; the first decade of TABOR, 1993-2002; and the second decade, 2003-12. The final decade included the largest tax increase in Colorado history, enacted as Referendum C in 2005. Decade-2 was also marked by increasing efforts to evade TABOR by defining nearly 60% of the state budget as “exempt” from TABOR.
Tax-and-Spending Limitation Results
The Taxpayer’s Bill of Rights Amendment has worked well to achieve its stated intention to “slow government growth.” Although government has still continued to grow significantly faster than the rate of population-plus-inflation, the Taxpayer’s Bill of Rights did partially dampen excess government growth. It did not cut or reduce reasonable government growth.
In terms of economic vitality, Colorado’s Decade-1 was best for Colorado. Unlike in the pre-TABOR decade, or in TABOR Decade-2 with its record increase in taxes and spending, because of Referendum C, Colorado’s first TABOR decade saw the state economy far outperform the national economy.
GUEST COLUMN: Say “no” to a special session
By: Michael Fields
May 21, 2016
Not even 48 hours after the legislative session ended, the governor floated the idea of convening a special session to address the hotly debated hospital provider fee.
This drumbeat has continued in the press, with pressure from countless special interest groups who didn’t get their way during the normal 120-day session. And this all comes after the Senate Finance Committee voted down a bill to move the $750 million hospital provider fee into a separate enterprise fund for the second year in a row.
Proponents of this move want you to believe that to fix roads and help schools, this budget gimmick is desperately needed. They have grabbed onto compelling buzzwords, cleverly invoked as rationale to adopt this plan. These messages are used to pull on people’s heart strings and convince them that enterprising the hospital provider fee would somehow fix our transportation and education needs. The fact is creating this enterprise would be an end-run around our Taxpayer’s Bill of Rights (TABOR) and would not fix our long-term funding problems.
To fully understand what has been going on with our state budget, let’s look at a few numbers:
– The state budget has gone from $19 billion to $27 billion in just seven years. Continue reading
Partisan posturing trumps a better Colorado
By Henry Dubroff and John Huggins
Posted: 05/21/2016 05:00:00 PM MDT
Local leaders discuss possible changes to the state’s constitutional initiative process in a small group during the Building a Better Colorado community summit at Northeastern Junior College on Dec. 7. (Sterling Journal-Advocate)
The tensions between populism and policymaking that are so evident in this year’s presidential primaries have trickled down to the state level.
In Colorado’s case, major policy reforms — including those that emerged from last fall’s Building a Better Colorado process of town hall meetings — have at times taken a back seat to partisan posturing.
But the Building a Better Colorado reforms remain a key part of the civic agenda, especially in these three areas:
- Reform or replace the Taxpayer’s Bill of Rights (TABOR), or put in place a “TABOR relief valve” so that the state may keep a bigger share of tax revenue to fund roads, schools and other infrastructure necessary to serve Colorado’s growing population.
- Reform our primary election process so that the results better reflect the will of voters and also put Colorado where it belongs on the national political map, as the most influential swing state in the Rocky Mountain region.
- Establish somewhat higher though reachable hurdles for qualifying and approving constitutional amendments, taking into account Colorado’s diverse geographic and demographic interests.
The difficulty in getting TABOR relief approved in the just-finished legislative session underscores how tricky it is to enact reforms in an election year where the Donald Trump and Bernie Sanders insurgencies are having a big impact. In the state Senate, for example, majority Republicans were pushed by the Colorado chapter of the Koch brothers-funded Americans for Prosperity not to tweak the language of the state’s hospital provider fee and exempt it from TABOR limits. The penalty: facing a more conservative primary opponent at the next election.
GOP: Hospital fees under TABOR
DENVER — Even though it had near universal support outside of the Capitol, Republicans in a Senate committee Tuesday killed a measure that some had hoped would free up money for schools and transportation without raising taxes or fees.
The Senate Finance Committee, on a party-line 3-2 vote, killed a measure to turn the state’s hospital provider fee program, which funds health care programs for the poor, into a state-run government enterprise.
Doing so would free up about $750 million under the revenue caps mandated by the voter-approved Taxpayer’s Bill of Rights, something the 1992 constitutional amendment expressly allows.
But Republicans in the GOP-controlled committee said the idea flies in the face of TABOR’s spending limits, saying it would allow for unlimited growth when it comes to Medicaid spending.
“I do believe it is a major cash transfer, and I believe it was set up accordingly so that it would not come under the strong scrutiny of the voters of Colorado,” said Sen. Tim Neville, R-Littleton, who chairs the committee. “I believe that was not by accident.”
The issue has been a major theme of the 2016 legislative session, which ends today.
It actually started at the end of last year’s session when Gov. John Hickenlooper proposed taking the program out from under TABOR, in part because it’s a fee paid by hospitals and not taxpayers.
Call a special session | GJSentinel.com
Call a special session
One of the bigger disappointments of the current legislative session, which ends today, is that Senate Republicans dodged taking any action on the contentious hospital provider fee.
The House passed two bills, 1420 and 1450, which would have converted the fee to an enterprise, thereby freeing up space under the revenue cap set by the Taxpayer’s Bill of Rights. Getting the fee out from under TABOR would have allowed $750 million to be directed toward transportation and education and helped backfill some of the $362 million in severance taxes that lawmakers have used to cover spending gaps since 2006.
Senate leaders delayed introducing the bills until Tuesday, thus assuring they wouldn’t get the required number of readings needed to pass before the sessions ends.
Several Republicans broke ranks to support the House measures, so it would have been instructive to hear arguments in the Senate. In an election year, voters deserve to understand the rationale behind fiscal policy positions and who’s taking them.
Early on, some Republicans argued that converting the fee eliminated refunds to taxpayers. But budget negotiations removed that scenario from the equation. In a parallel universe, funding for roads and schools without a tax increase sounds like something the GOP would get behind.
“I don’t quite understand a lot of my fellow Republicans saying, ‘Oh, we have to preserve TABOR,’” John Suthers told The Colorado Independent last week. “The easiest way to preserve TABOR, and not increase taxes, is to remove the provider fee from the calculation. But obviously there’s a group in the Senate that feels differently.”
In 2009, Suthers, who was then Colorado’s Republican attorney general, urged lawmakers to make the new fee an enterprise. The current attorney general, Republican Cynthia Coffman, says converting it now is perfectly legal.
PLF files brief in Colorado Taxpayer’s Bill of Rights case
The Colorado Department of State requires companies to pay a business and licensing charge for filing various statutorily mandated corporate documents. The Department considers this charge to be a fee. But most of the money raised from the charge is not used to defray the cost of providing the business and licensing services, the classic purpose of a fee. The lion’s share of the business and licensing charges go to the Department’s Cash Fund, and less than 15% of the Fund is used to defray the cost of operating the Business and Licensing Division. Because most of the money raised from the business and licensing charge is used to provide the Department of State’s general services, it has all of the hallmarks of a tax, and should be labeled as such.
Colorado courts examine three factors to determine whether a charge is a tax or fee: (1) the language of the enabling statute; (2) the primary purpose for which the money is raised; and (3) whether the primary purpose of the charge is to defray the cost of services for those who must pay it. The District Court of Denver concluded that while the first two factors support characterizing the business and licensing charge as a fee, the third factor did not because the primary purpose was not to defray the cost of providing business and licensing services. Unfortunately, the court did not explain how it would consider the factors in this balancing test, instead concluding that TABOR did not even apply to the business and licensing charge.
PLF’s brief raises two points. First, we argue that Colorado courts should apply a presumption that TABOR applies to all charges. Colorado voters made it clear that they wanted to limit government growth when they enacted TABOR. Colorado Courts would give effect to the Colorado voters intent by applying a presumption that TABOR applies. Second, we suggest that Colorado courts follow the footsteps of other state courts in conducting the balancing test that determines whether a charge is a tax or fee, by giving stronger consideration to the third factor—whether the charge is meant to defray the cost of providing a service to those who must pay it—and de-emphasizing the first factor which considers the label given to the charge. Indeed, if Colorado courts give too much weight to the government’s characterization, governments will have a perverse incentive to mislabel charges to avoid TABOR’s requirements. Under this test, the business and licensing charge is clearly a tax. Thus, the charge would illegal because it was not submitted to the voters.
7 winners and losers: Breakdown of the 2016 Colorado legislative session
May 11, 2016 Updated: May 11, 2016 at 10:45 pm
The 2016 Colorado legislative session may go down in history as the year of little change.
The politically divided chambers in the General Assembly resulted in neither party having much success with their lengthy agendas.
That’s not necessarily a bad thing for political moderates or independents who don’t care about party agendas, but for everyone else, they’ve got something in the loss column this year.
That means 2017 won’t see major policy changes on things like clamping down on construction defects litigation or equal-pay legislation.
Here is a look at some of the winners and losers from the session, which concluded Wednesday:
The Joint Budget Committee
Any politician who can emerge from 120 days of politicking and still look like a high-functioning, level-headed individual. The three Democrats and three Republicans on the Joint Budget Committee received more than their share of accolades for crafting a 581-page budget that somehow managed to appease both sides. Sen. Kent Lambert, R-Colorado Springs, and Rep. Millie Hamner, D-Dillon, led the committee to a $25.8 billion budget that averted major cuts and – perhaps more significantly – the gridlock all too common across the nation when politicians dig in their heals.