Category Archives: Editorial

Jul 22

Affordable housing program will cut into your TABOR refunds

Posted on by

Affordable housing program will cut into your TABOR refunds

By Natalie Menten

Guest Commentary

The state government has taken more taxes from you than we allow it to have, and it should rebate that over-collection back to you. That money coming back to all taxpayers is now in jeopardy. We should be alarmed at the potential waste.

Colorado voters’ dissatisfaction with government growing beyond its means led to the passage of the Taxpayer’s Bill of Rights (TABOR). This constitutional amendment requires voter approval for tax increases and debt. It also limits how fast government can grow. The formula for automatic tax increases is the prior year’s budget plus adjustment for inflation and population growth.

When government collects taxes above the limit, it must refund the surplus. Later this year, each taxpayer will get a $750 TABOR rebate from the state. The economic outlook predicts rebates for the next several years.

Two statewide ballot measures in November claim they don’t raise taxes, but that’s just not true. Funding for new programs comes from our future TABOR rebates. If we don’t get all those rebates back, that’s effectively a higher tax rate and clearly a tax hike.

Click the link below to continue reading this article at the Denver Post.

 

Opinion: Statewide affordable housing program will cut into your TABOR refunds

Jul 22

Menten: Jeffco commissioners want voters to hand them a blank check

Posted on by

Jefferson County is one of more than a dozen counties in Colorado that still enjoys the protections of the Taxpayer’s Bill of Rights (TABOR). This constitutional amendment requires voter approval for tax increases and debt.  It also modestly limits how fast government can grow. The formula for automatic tax increases is the prior year’s budget plus adjustment for inflation and local growth.

Jefferson County government is presently allowed to grow 3.9% annually under the formula as described in a Board of County Commissioners agenda for July 19 (page 171).  That’s a reasonable amount for government growth – compare it to your household. Have you gotten nearly a 4% increase in your income?

Yet, the county commissioners have spent the last few years claiming they have insufficient revenue to maintain operations. Now they blame the revenue problem on the pandemic, yet the county received close to a couple hundred million in COVID relief money.

That pile of federal money still didn’t calm down the county commissioners’ quest to get rid of our Taxpayer’s Bill of Rights.

To continue reading the rest of this story, please click (HERE) to go to Complete Colorado

#ItsYourMoneyNotTheirs
#ThankGodForTABOR
#VoteOnTaxesAndFees
#FeesAreTaxes
#TABOR
#FollowTheMoney
#FollowTheLaw

Jul 04

The Empire of Fees. How charges and fines drive government growth

Posted on by

When I wake up in the morning at my home in Austin, Texas, I turn on the lights, and thereby provide a few cents to the city government’s electric company. I flush the toilet, owing a few more to Austin’s sewer service. When I pour myself a glass of water, the city water department gets a piece. After I get dressed and step outside, I watch the city take my trash, my recycling, and my compost—each pickup costs a few dollars. Sometimes, I discover a $25 ticket for parking my car in the wrong spot. Then I swallow my anger and drive down the MoPac highway, where I pay a toll to the Central Texas Regional Mobility Authority. I park in a garage downtown owned by the Austin Transportation Department, pay them a few bucks, and walk to my office. If I need to take a trip out of town, I pay $1.25 for a Capital Metro District bus to the city-owned Austin-Bergstrom International Airport, where, along with the price of my plane ticket, I pay a $5.60 fee for the benefit of being patted down by a TSA agent, a Passenger Facility Charge, and a small part in any rents the city charges restaurants and retailers. Only when I’m in the air does the drain to the government stop.

In one typical morning, I handed over money to several government bodies. But I didn’t pay any taxes—only fees, charges, and fines. These are the future of government in the United States.

The idea that government operates just by taxing and spending money is anachronistic. A growing share of its revenue comes from charges that the government imposes in exchange for its services or as a penalty for breaking its rules. In 1950, about 1 percent of Americans’ income went to charges from state and local governments. Today, that number is 4 percent. Include federal fees and charges, themselves the fastest-growing part of federal revenue, and that number rises to over 5.5 percent. Though largely hidden from the public, fees and charges account for most of the growth in government over the past 70 years and have become the top source of revenue for state and local governments.

Two factors drive this new reliance on special charges. First, governments are expanding the “businesses” they run—hospitals, universities, airports—and forcing users to pay more for them.

To continue reading this story, please click (HERE) to go to The City Journal.

May 18

Progressives want more from Colorado residential property taxes

Posted on by

Progressives want more from Colorado residential property taxes

By Brad Hughes

Some Colorado progressives are intrigued by a Bell Policy Center idea to increase property taxes on the wealthy to pay for subsidized housing for the poor. Colorado progressives frustrated that they could not eliminate TABOR, have been targeting property taxes as a source to expand government. The repeal of the Gallagher amendment was a big victory for them in pursuing increased residential property taxation. One of their proposals was to target residential real estate that exceeded $2 million in value. One proposal was to assess an additional 0.57% tax on homes valued at over $2 million. Another proposal was to establish a fee that was 1.1% on houses valued at over $2 million. Fortunately, both initiatives died. This doesn’t mean the idea is dead. It will be back for next year’s session.

Elizabeth Warren (D-MA) was quoted on Twitter as making a comparison between her proposed wealth tax and the traditional property tax. Addressing a crowd, she said: “You’ve been paying a wealth tax for years. They just call it a property tax. I just want their tax to include the diamonds, the yachts, and the Rembrandts.” Under current law, the first $250,000 ($500,000 for married couples) of capital gains on the sale of your primary residence are exempt from tax. Warren wants to create a wealth tax that would fall on the ownership of financial assets such as corporate stock or bonds. Many progressives at the national level like this idea. This will be difficult to accomplish when Americans learn about the magnitude of this taxation. A surtax on residential property in Colorado will be met with resistance if the electorate is informed.

The experiment with the wealth tax in Europe was a failure in many countries. France’s wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems. Emmanuel Macron, President of France, ultimately killed it.

In 1990, twelve countries in Europe had a wealth tax. Today, there are only three: Norway, Spain, and Switzerland. According to reports by the OECD and others, there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn’t raise much revenue.1

The wealth tax idea was substantially influenced by the work of discredited French economist Thomas Piketty, whose book “Capital in the Twenty-First Century”, was focused on redistributing wealth in Europe.

Although a wealth tax will be difficult to impose in America, some states, like Colorado, are considering an increased surtax on residential property to accomplish their tax agenda and circumvent taxpayer opposition. It is important for Coloradans to support TABOR, and oppose surtaxes on residential property. Apathy and ignorance encourage the passions of radical progressivism. Stay tuned. The progressives will not give up until they lose elections.

1 https://www.npr.org/sections/money/2019/02/26/698057356/if-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs#:~:text=The%20experiment%20with%20the%20wealth%20tax%20in%20Europe,twelve%20countries%20in%20Europe%20had%20a%20wealth%20tax.

May 18

Menten: Jefferson County ‘listening’ tour leaves out inconvenient facts

Posted on by

Jefferson County is one of more than a dozen counties in Colorado that is still enjoys the protections of government revenue caps under the state’s Taxpayer’s Bill of Rights (TABOR) amendment. In years of excess revenue collection, the taxpayers traditionally benefit from this TABOR feature by a temporary property tax reduction. Unfortunately, County Commissioners Lesley Dahlkemper, Andy Kerr, and Tracy Kraft-Tharp didn’t want to issue the 2020 refunds in an efficient way, instead, they chose to spend $200,000 in postage to send $1.5 million dollars in rebate checks to residents.

The commissioners chose to unnecessarily spend that money so that they could then introduce a recently concluded promotional tour gauging feedback on whether they would be successful in eliminating all or parts of the TABOR revenue caps.  County voters decidedly said no to a similar effort in 2019.  In addition, they are polling meeting participants about an alternative sales tax increase.

The problem is that those who have read the county promotional literature and attended the meetings haven’t been given all the facts.

Click (HERE) to go to Complete Colorado to continue reading this story.

Apr 18

The Colorado Title Board & TABOR

Posted on by

The April 20th Title Board Hearing has a notable 60 proposals on the agenda because it’s the last chance to get title set for the 2022 ballot. Although the list of potential ballot issues is long, many are variations with a slight tweak.  After title setting, the proponents must do the hard (or expensive) work of getting enough signatures.

Nearly a 1/3 of the proposals pertain to alcohol licensing, sales, and delivery.

Property taxes are another hot topic. Pro-taxpayer advocates are presenting relief in the form of a 2%-3% cap on property taxes.

Bigger government advocates propose a new tax on “Luxury Residential Real Property,” defined as $2 million or more. New revenues would be turned over to government to address affordable housing.  On that same theme, there’s a proposal to increase the income tax rate which would be spent on government-overseen affordable housing.

Another group wants to increase taxes from income tax by reducing deductions, putting increased taxation towards free school lunches for certain public schools – an expenditure of $60 – $140 million dollars a year.

Protecting the Taxpayer’s Bill of Rights begins before a ballot issue hits the street. The public can testify at the title setting meeting to get transparent language about the financial effects. If you’ve been around Colorado long enough you know that proponents of tax increases will actually try to have the question read, “without raising taxes” if they can get away with it. As we know, if you end up with less money in your pocket because of a tax policy change, that’s a tax increase.

Currently, there’s a legal battle just filed with the Supreme Court over initiatives #62-65, called Additional Revenue to State Education Fund.  Proponents are attempting to claim the measures are not a tax increase. Any of the four variations would reduce or completely eliminate our expected rebates from the Taxpayer’s Bill of Rights over the next two years. Since there is no sunset, we would give up a substantial amount of our future refunds if #62-65 moves forward.

You can find the ballot proposals at the Colorado Secretary of State website under Elections & Voting and Initiatives & Title Board. You’re looking for the section titled Awaiting Initial Hearing.

You can testify remotely. The meeting is Wednesday, April 20 starting at 9 am. https://attendee.gotowebinar.com/register/3996912106274902539

Email the Title Setting Board at initiatives@coloradosos.gov. Emails should be sent by Tuesday midday at the latest. Otherwise, listen in remotely and chime in when it’s time. It’s going to be a long meeting.

 

Natalie Menten
TABOR Board Member

Mar 01

Update on Colorado’s Legislative Council Staff and Proposition 116

Posted on by

In 2020, Colorado voters approved Proposition 116, which reduced the state’s income tax rate from 4.63 to 4.55 percent. Due to the state’s application of certain provisions of TABOR, however, taxpayers will effectively lose out on the rate reduction for the first several years.

Naturally, voters expected that Proposition 116 would allow them to keep more of their own money. A close look at documents maintained by Legislative Council Staff (LCS), however, reveals that things did not work out how voters expected. Tax rates went down, but constitutionally mandated tax refunds — known as “TABOR refunds” — fell by the exact same amount, negating taxpayer savings from the voter-approved tax cut.

It’s a bit complicated, but here’s how it works.

Article X of the state constitution — commonly known as the Taxpayer’s Bill of Rights, or TABOR — sets limits on the amount of tax revenue the state can collect each year. If revenues, including income-tax collections, surpass the TABOR limit, the excess gets refunded back to voters.

Picture state coffers as a silo and revenues as grain filling it up. In a good year, there may be more bounty than what the silo can hold. In that case, the overflow goes back to the people.

Each year, the limit — or the size of the silo — increases based on population growth and inflation, allowing government spending to grow automatically. If the state wants to collect or keep tax monies at a level higher than automatic growth permits, it must win voter consent at the ballot.

When voters reduced revenues last year, they voted to decrease the amount of grain put into the silo by a specified amount. In executing the will of the people, the state reduced the amount of grain but put it in the same, larger silo. At the lower income-tax rates, the harvest (i.e. revenues) would have to be exceptionally good to fill up the same silo and trigger a refund.

Incidentally, state revenue forecasts show very bountiful times ahead and refunds for at least four consecutive years despite all this. That means that for at least this year and the next three, smaller refunds will offset the voter-approved tax cuts unless additional reforms are adopted.

Read plainly, TABOR appears to guard against this outcome by requiring the limit to be “adjusted for revenue changes approved by voters.” LCS evidently has a different interpretation—one which has effectively stripped voters of their tax cut.

Governor Jared Polis has lauded the income tax cut on multiple occasions and even said that he supports eliminating the state income tax entirely. He can demonstrate fidelity to his own rhetoric and to the state constitution by directing the Colorado Department of Revenue to adjust the TABOR limit for the “revenue changes approved by voters” with Proposition 116.  Alternatively, the General Assembly could set a new, lower TABOR limit to reflect the new tax rate. Either solution would cause voters to receive their full refunds and benefit from the income tax reduction they adopted in 2020.

Ben Murrey, Fiscal Policy Center Director with the Independence Institute