Category Archives: Fiscal Policy

Apr 05

California Businesses Take On Gavin Newsom Over Tax Hikes

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Meanwhile, in the state known for its historic gold rush, a coalition of California businesses gathered enough signatures for a ballot measure that would require two-thirds of voters to approve most local tax increases and roll back some already in place.

 

California Businesses Take On Gavin Newsom Over Tax Hikes

Governor says ballot measure would decimate funding for basic services; backers say it is needed in the high-cost state

By Christine Mai-Duc
April 4, 2024 9:00 pm ET

California Gov. Gavin Newsom was featured in an ad calling the tax measure ‘dangerous, an overreach and irresponsible.’ PHOTO: DAMIAN DOVARGANES/ASSOCIATED PRESS

A coalition of California companies is going to war with Gov. Gavin Newsom and his Democratic allies over taxes it says have grown out of control in the Golden State.

The businesses have gathered enough signatures to put a measure on November’s ballot that would require two-thirds of voters to approve most local tax increases and roll back some recently enacted ones. If passed, it would be one of the most significant changes to the way California funds its government since 1978’s Proposition 13, a voter-approved law that severely limited property tax increases.

Backers say it is necessary to stop continued tax increases that are making it too expensive to operate in California and pushing companies to leave the state. Real estate businesses in Southern California are among the biggest funders, according to state campaign finance records, partly in response to a surcharge on luxury home sales that Los Angeles voters passed in 2022.

Newsom, local officials and labor unions say the proposal would decimate funding for basic services such as trash collection and firefighting and would make budgeting decisions near-impossible.

The companies spent some $16 million to gather signatures to put their proposal before voters and are gearing up for a fight political analysts say could draw tens of millions of dollars in advertising by both sides.

“The business community is fed up, they want to start stepping up to make a positive change. And they recognize that if they don’t do it, nobody will,” said Rob Lapsley, president of the California Business Roundtable, an advocacy group representing some of the state’s biggest businesses and leading the “yes” campaign. Continue reading →

Mar 24

Water district subject to TABOR vote requirement

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Water district subject to TABOR vote requirement

Water districts are like all other government entities that are subject to the Taxpayer’s Bill of Rights when it comes to voters approving tax increases, the Colorado Appeals Court ruled Thursday.

In a precedent-setting case out of Logan County in the northeast corner of the state, a three-judge panel overturned a lower court’s decision that the Lower South Platte Water Conservancy District that serves four Eastern Plains counties violated TABOR by doubling its mill levy starting in 2019 because it did so without voter approval.

The lower court had ruled in favor of the district, saying its raising of the levy from 0.5 mills to 1 mill did not violate that 1992 constitutional amendment because the water district was formed before TABOR was approved, and is required under the state’s Water Conservancy Act to set a mill levy based on a mandatory and non-discretionary formula.

The water district tried to argue that the Colorado Supreme Court, in Huber v. Colorado Mining Association, allows such mill levy increases because of that formula.

But a three-judge panel said that high court ruling applies to entities that aren’t making a legislative or governmental act for a tax-rate increase, but a non-discretionary duty under pre-TABOR taxing statutes, such as the Colorado Department of Revenue making legally required adjustments to severance taxes. Continue reading →

Mar 24

TABOR: The enduring success story empowering Colorado taxpayers

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TABOR: The enduring success story empowering Colorado taxpayers

BY BARRY W. POULSON, OPINION CONTRIBUTOR – 03/22/24 7:00 AM ET

AP Photo/David Zalubowski

The dome of the State Capitol shines in the early morning sun Friday, May 28, 2021, in downtown Denver. (AP Photo/David Zalubowski)

 

Even as economists tout a soft landing for the U.S. economy, Americans are facing sticker shock at the grocery store, the gas pump, and fast-food restaurants, among other places.

After a long bout of double-digit inflation, not unlike that of the 1970s. We have learned once again that unconstrained growth in federal spending funded by borrowing and accommodative monetary policy eventually triggers high inflation.

In response to stagflation in the 1970s, Congress enacted statutory fiscal rules designed to balance the budget and stabilize debt. The Federal Reserve also pursued tighter monetary polies to stabilize prices. In the 1990s, a period referred to as “The Great Moderation,” the federal government achieved sustainable debt levels and low rates of inflation.

Unfortunately, over the last two decades, the federal government largely abandoned these fiscal and monetary policies. Federal spending has far outpaced the growth in national income, and federal debt has grown at an unsustainable rate. The statutory fiscal rules designed to constrain federal spending are routinely circumvented and suspended.

The Federal Reserve has again used monetary policy to accommodate these fiscal policies, resulting in wide swings in the rate of inflation. It is difficult to argue that we are experiencing a soft landing and that all is well. A more realistic forecast is that over the next decade we will again experience stagflation.

But there is a bright spot in this gloomy outlook.

In response to stagflation in the 1970s, citizens launched state and local tax revolts. Beginning with property tax limitations in California, citizens began to challenge profligate fiscal policies at the state and local level. Using the initiative and referendum, citizens enacted tax and expenditure limits to constrain fiscal policies. Continue reading →

Mar 22

A TABOR Lawsuit Victory

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Residents in the northeast corner of Colorado contacted the TABOR Committee several years ago about a tax increase imposed without voter approval by their local Water Conservancy District.  Our organization kicked off the response with an attorney’s letter warning the District to reverse course.  It did not.  After other subsequent efforts, a lawsuit was filed by those residents.  Two public interest law firms have done the legal work.

Although a lower court allowed the District to increase taxes, the very good news is that the Colorado Court of Appeals recently ruled for the taxpayers!  The case still can be appealed to the Colorado Supreme Court, and if not heard there, the trial court must still resolve several questions, so the lawsuit will continue.

The importance here is that the Colorado court system has confirmed the primacy of the Taxpayer’s Bill of Rights and protected the taxpayers in that District.

 

Penn Pfiffner
Colorado TABOR

Mar 15

Menten: Open letter to the Colorado Commission on Property Tax

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Dear members of the Commission on Property Tax:

The commission was tasked with providing property tax relief options before the temporary tax adjustments expire at the end of 2024.

The obvious  answer is to restore inflation and growth adjustable property tax revenue caps where they’ve been forfeited in prior elections. Good news – that’s already in the Taxpayer’s Bill of Rights (TABOR) but it needs to be reinforced!

If that doesn’t happen, there will be a hard property tax cap on the 2024 ballot. That’s been clearly stated by two of the proponents of property tax caps if there was insufficient actions from the commission.

Taxpayers want tax caps whether they are hard or inflation adjustable. Taxpayers like me understand that government growth should be relative to the size of the local economy. That is rightly answered in the existing property tax limit contained in TABOR, paragraph 7c, which allows for such growth.

Having sat through all the commission meetings, there’s a few moments I want to highlight.

Bring back the tax caps

In this three minute video, the county assessor from Santa Clara, California described where that state sits now under the Proposition 13 property tax caps. His points illustrate why our Colorado TABOR is ideal. The assessor points out that local California governments didn’t appropriately reduce property taxes in 1978, even referring to property taxes as “money machines.” So, California voters used their right to petition to place a hard tax cap on the ballot, which became Proposition 13. Continue reading →

Feb 28

Fiscal Rules and ‘Learning by Doing’

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February 28, 2024

Fiscal Rules and ‘Learning by Doing’

By Barry Poulson

An important discovery in understanding productivity change and economic growth is the phenomenon of “learning by doing.” One of the first discoveries of this phenomenon was in the aircraft industry during World War II. Defense contractors discovered that in producing a particular aircraft, the labor force was more efficient with each successive contract. The labor force gained knowledge in producing aircraft in the initial contract that they applied in subsequent contracts.

Learning by doing is found to increase productivity across many industries. It is found in pursuing public policies as well. I gained insight into these learning effects as a member of the Colorado Tax Commission. We held hearings across the state to gain insight into citizen attitudes toward fiscal policy, and in particular to Colorado’s Taxpayer Bill of Rights Amendment (TABOR). If any government in Colorado wants to increase taxes, revenues, or issue public debt, it must have citizen approval. Citizens in Colorado have voted on hundreds of these ballot measures at all levels of government since TABOR was passed through citizen initiative in 1992. Continue reading →

Feb 23

Freedom Minute | Colorado’s Taxpayer Bill of Rights (TABOR)

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Economist Dr. Paul Prentice explains Colorado’s Taxpayer Bill of Rights (TABOR) amendment. TABOR allows the state budget to grow each year at population plus inflation, while giving taxpayers the ability to vote on all tax and debt increases.

Feb 23

Freedom Minute | Everything You Ever Wanted to Know about TABOR

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Rob Natelson wrote THE BOOK on Colorado’s Taxpayer’s Bill of Rights. As he puts it, “It’s everything you could ever want to know about TABOR.” Check it out here: https://www.i2i.org/the-colorado-taxp…