TABOR: What does and why it’s important
In 1992, Colorado voters did something no other state in the country had done – they amended our state constitution to include the Taxpayer’s Bill of Rights, commonly known as TABOR. This new constitutional amendment requires every tax increase to be approved by the voters and limits the amount of revenue the state can keep. While critics of TABOR claim such stringent restrictions have hampered Colorado’s economy, an examination of the amendment’s provisions reveals how it actually helps keep our taxes low and government lean, and is helping Colorado recover faster than many other states.
Perhaps the most widely-known provision of TABOR is the requirement that all tax increases be approved by a majority of Colorado voters. In any given year, the state legislature is faced with numerous budget decisions, but rather than simply allow the legislators to enact tax increases to fund projects as they see fit, voters must approve these increases. Think back to Amendment 66 in 2013, which called for a $1 billion tax increase for education. Citizens overwhelmingly defeated this measure, 66 to 34 percent, sending a message that an increase in school funding should come from existing resources and not new taxes. The result meant the legislature had to make some hard decisions, but since Amendment 66, we have directed more than an additional $200 million dollars of existing resources into K-12 education.
Opponents point out that TABOR unfairly restricts government, but that unfounded concern leads me to my next point – TABOR forces our state government to budget just like a business or an individual. As with any budget, resources must be prioritized and inefficiencies must be identified and corrected. TABOR forces the legislature and the governor to make hard decisions about what programs to fund, whether an existing program can or should be expanded and how much should be set aside in a rainy-day fund. Simply put, everyone must be mindful of how money is spent and our state government should be no different.
Less well known, though equally important, is the provision that restricts the state government’s revenue. Under TABOR, government revenue cannot increase more than the percentage of inflation plus population growth. For example, if inflation increased by one percent and the population increased by two percent, then revenue could not increase more than three percent for the next fiscal year. If revenue exceeds this formulaic cap, that excess must be refunded back to the taxpayers. This revenue limit prevents our state government from growing beyond its means and ensures it cannot create too many future obligations that may burden the state in lean years.
So how has this law helped Colorado? Well think about the recession. When revenue was low, TABOR prevented the state legislature from raising taxes on citizens struggling through the recession. And now that our state is starting to recover, TABOR is ensuring our state government grows at a responsible and manageable rate.
Perhaps numbers do the best job of supporting TABOR. In just the last seven years, our general fund has increased by more than 43 percent, meaning the state has an additional $2.8 billion more to spend than it did in 2009, all without requiring a tax increase. This additional revenue is allowing our state government to direct resources to areas where they are needed most and help fund new ideas to keep our recovery on track.
TABOR acknowledges that the best stewards of taxpayers’ money are the taxpayers themselves. TABOR keeps our state on a budget and ensures we are making informed and calculated decisions with your money. And finally, TABOR keeps our obligations in check, ensuring our state government doesn’t over burden its citizens and stifle economic growth.
Finally, to the critics who argue TABOR is too restricting I have one simple question, “If a 43 percent increase in revenue in only seven years is not enough, what amount is?” I believe most families and businesses would be very happy with a 43 percent increase in income over a seven year period. But apparently, it is not enough for some TABOR critics.
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