Educators have been led to believe that repealing TABOR’s state and local tax and spending restrictions would trickle down into more legislative funding of the public schools. Not so fast. The state’s recent budget history says otherwise.
Since approved by the voters in 1992, TABOR has done what it promised to do, which is to require voter approval before taxes can be raised and to tie revenue increases to Colorado’s overall economic growth unless voters permit.
In fact, state revenues and spending have increased every year under TABOR even under the cap of combined growth in population and inflation.
So why hasn’t the Colorado Legislature shared the tax-revenue wealth with the public schools and higher education? And why have transportation and other parts of the state budget also failed to keep pace?
The reason is simple: Medicaid. Colorado legislators have expanded Medicaid into the largest single expenditure in the state budget — by far. No one is quite sure how big Medicaid has grown. Estimates range from $8 billion to $13 billion a year, depending on how much double-counting there is in the state budget’s many medical assistance categories.
Legislators and the governor have made the big mistake of chasing federal matching grants, which are particularly enticing under Obamacare’s massive expansion of Medicaid. Experience tells us the federal match surely will decline over time, leaving the state with a huge bill to pay in the future.
The sad thing is that other states did not fall for Obamacare’s promise of something for nothing and resisted the lure of Medicaid expansion.
While crying poverty year in and year out, Colorado politicians won’t admit that they have diverted most of the state’s annual revenue growth into this one program — Medicaid — at the expense of education, transportation, public safety and the rest.
So, even if TABOR is overturned in court, what’s to stop the Legislature from continuing to short education and other budgets that should, in a perfect world, have priority? The answer is nothing.
Of one thing you can be sure, however. We would face perpetual increases in taxes at both the state and local level. Taxpayers would face general sales and income tax hikes and, in the case of school districts, higher property tax mill levies.
Colorado is fortunate to have TABOR as a safety valve against that outcome. The real culprit is not TABOR, but mistaken state budget priorities.