Category Archives: TABOR news story

Apr 08

Learning from Colorado’s Success, Alaska (and Every Other State) Should Adopt a TABOR-Style Spending Cap

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April 7, 2020 by Dan Mitchell

As explained in this short video, a spending cap limits how fast a government’s budget can grow each year.

That’s a very sensible approach, sort of like having a speed limit in a school zone, and even left-leaning international bureaucracies have concluded it’s the best fiscal rule.

That being said, not all spending caps are created equal. A fiscal rule that allows continuous increases in the burden of government spending is akin to an excessive speed limit on the road in front of an elementary school.

At a minimum, a spending cap should keep the spending burden constant (relative to the economy’s productive sector). Even better, a spending cap should fulfill the Golden Rule of fiscal policy by slowly but surely reducing the size of government.

Let’s learn from a real-world example.

Ben Wilterdink, a Visiting Fellow with the Alaska Policy Forum, explains for readers of the Peninsula Clarion that the state has a spending cap, but one that is set too high.

Alaska is in the midst of a perfect fiscal storm. …Even before the present crisis, our state faced large budget deficits and tough decisions about how to make ends meet. …That’s why adopting a functional limit on the growth in state spending is essential for long-term economic success. …a functional limit in the growth of state spending decreases the temptation to dramatically increase spending when economic times are good, creating new budget expectations that are difficult to maintain during inevitable economic downturns… Technically, Alaska already has a constitutional spending cap in place, but the formula used renders it basically meaningless. …While Alaskans can’t retroactively adopt a meaningful spending limit, we can ensure that those economic benefits are captured going forward.

So why is a spending cap now an important issue?

To continue reading this story, please click (HERE):

Apr 07

“Truth and reason in ballot language!”

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“Truth and reason in ballot language!”
April, 2020

The Taxpayer’s Bill of Rights includes good government provisions that improve election procedures.

There was a time when Colorado elected officials could push for passage of a bond, or for new taxes, but bury the cost very deep into the explanation on the ballot, in hopes that many voters might not notice the magnitude of the tax.

The ballot language would promise all kinds of wonderful outcomes.  Not only would the new revenues for the government solve the problem in perpetuity, but it would bring world peace and even make the voter more handsome!  Then, near the end in the midst of a lot of other promises, would come the information that the cost to the taxpayer would be very, very high.

The Taxpayer’s Bill of Rights stopped that sort of game playing.  Now, the government must put the cost right up front.  It has no option but to state how much the new tax will weigh annually on the taxpayer.  For a new bond, the ballot measure must state at the very beginning how much the total new debt will be and what that means for the total repayment cost.  Only then may the government (“district”) present its reasons for the new taxes.

Another game that the Taxpayer’s Bill of Rights anticipated and which it explicitly prohibits is a government underestimating a revenue number.  If the new taxes exceed the estimate, the entirety of the overage must be refunded the next year and the rate adjusted downward.

Colorado constitution (Article X, Section 20), paragraph 3(c) states:  “Ballot titles shall begin, ‘SHALL (DISTRICT) TAXES BE INCREASED ____ ANNUALLY?’  (or)  ‘SHALL (DISTRICT) DEBT BE INCREASED (principal amount) WITH A REPAYMENT COST OF (maximum..)’.”  Earlier in the same paragraph is the requirement that “if a tax increase exceeds any estimate… for the same fiscal year, the tax increase is thereafter reduced up to 100% in proportion to the …excess, and the combined excess revenue refunded….”

The paragraph was carefully crafted as a good government improvement, with TABOR protecting the taxpayer in ways beyond just voting on tax rates.

Apr 02

Alaska Voices: It’s time for a spending cap that works

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…While more than half of states currently have some form of tax and expenditure limit, the most effective is Colorado’s Taxpayer Bill of Rights (TABOR), which constitutionally limits spending growth to the rate of inflation plus estimated population growth. The stable budget and tax climate created by TABOR has served Coloradans remarkably well. Over the past decade, Colorado’s gross state product (GSP) has grown by 45.5%, personal income has grown by 59.5%, and non-farm payroll employment has grown by 15.8%.

By comparison, during the same time period, Alaska’s GSP growth was 0%, personal income growth was 33.5%, and non-farm payroll employment growth was 0.3%.

But it’s not just Colorado that has benefited from a functional tax and expenditure limit. Nationwide, states with tax and expenditure limits have outperformed states without them in GSP growth, personal income growth, and employment growth…

To read this whole story, please click (HERE):

Apr 02

A free-market approach to reviving the economy amid COVID-19 distress

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…Once the COVID-19 crisis subsides, the federal government should wholeheartedly work toward a reduction in both federal spending and the national debt. There are many pro-taxpayer fiscal rules to choose from, including the Taxpayer Bill of Rights (TABOR) in Colorado, or a meaningful balanced budget amendment, like the one Indiana voters overwhelmingly inserted into their state constitution in 2018….

A free-market approach to reviving the economy amid COVID-19 distress

© Getty

According to economist Arthur Laffer, President Ronald Reagan had a great response when asked by staff what to do about one of the economic crises of the 1980s: “Don’t just stand there, go undo something!”

This rings true amid our current situation. Yet some elected officials are inclined to impose a new law or regulation to address an economic crisis. In some cases that reaction is warranted. However, harkening back to the words of Reagan, some of the most effective government responses to aid individuals in the economy can revolve around repealing or suspending burdensome taxes and regulations. While many of the innovative policy solutions are currently happening at the state and local level, federal policymakers have major opportunities as well.

For instance, the economy would greatly benefit from a suspension of the Jones Act. Passed in 1920, the Jones Act requires all ships transporting goods between United States ports be U.S. owned, U.S. crewed, U.S. registered and U.S. built. As researchers at the Cato Institute point out, this results in higher prices for American consumers, to the tune of $1.8 billion each year. Fewer ships are available to transport needed goods in the supply chain, which is especially worrisome during a pandemic.

To continue reading this story, please click (HERE):

Apr 01

Against uncertain backdrop, the tax overhaul backed by Colorado’s governor and state lawmakers limps ahead

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Colorado Gov. Jared Polis greets the crowd as he walks to the podium to deliver his second State of the State address at the state Capitol on Jan. 9, 2020 in Denver. (Kathryn Scott, Special to The Colorado Sun)

Gov. Jared Polis announced a task force in January to study the state’s tax breaks, building on the General Assembly’s efforts, but it may stall

After years of groundwork, 2020 was supposed to be the time for Colorado tax reform.

Democratic Gov. Jared Polis kicked off his second year in office by doubling down on his pledge to eliminate special interest tax breaks to fund broad tax cuts. A legislative study group came into the session with an agenda of its own. And the state auditor’s office in January released a damning evaluation of one of the state’s most expansive — and controversial — tax breaks, the Colorado enterprise zone program.

Two months later, the tax overhaul effort is suddenly in limbo, like most everything else. The coronavirus has uprooted the legislative session, halting deliberations indefinitely. And even if lawmakers return to their duties, it’s not clear that a tax code rewrite will be a priority when the legislature reboots.

“Right now, nobody knows what’s going to happen,” said Rep. Adrienne Benavidez, the Commerce City Democrat who chaired the interim study committee.

To continue reading this story, please click (HERE):

Mar 19

Explore the Colorado State Budget

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Michael Fields@MichaelCLFields

Here’s a good tool to better understand our state budget. It’s much more accessible than what’s been previously available from the state.

KC Becker@kcbecker
If you’re looking for something to read while #socialdistancing, we’ve launched a tool to help you understand the Colorado Budget! Find simple explanations on where revenue comes from, how taxes are spent, TABOR, school financing, and much more!

To see where the money comes in and goes out in Colorado’s state budget, click (HERE):

 

Mar 12

Paid leave, petitions ballot measures land in state Supreme Court

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The Colorado Supreme Court In Denver
The Ralph L. Carr Colorado Judicial Center in downtown Denver, home of the Colorado Supreme Court.

traveler1116 / iStock

Five additional challenges to proposed ballot initiatives went to the Colorado Supreme Court this week, as opponents seek to block measures pertaining to paid leave, tax policy and the petitioning process from the November statewide ballot.

Kelly Brough, the president and CEO of the Denver Metro Chamber of Commerce, filed four of the challenges. She wrote in a court petition that she believed Initiative 245, which would create a right to ballot initiative at virtually every level of state and local government, had a misleading ballot title because it omitted descriptions of several key features from the complex measure.

Specifically, she argued that the title should inform voters of a reduction in signatures required to put an initiative on the ballot, of newly-assigned jurisdiction to the Supreme Court to hear initiative protests and of prohibitions on legislation from the General Assembly on topics that voters previously rejected through referendum.

The three-member Title Board sets the ballot titles for voters if they determine that an initiative constitutes a single subject. The title must include the central components of the proposal, but also be brief.

To continue reading this story, please click (HERE):

Mar 12

NEW COLORADO BALLOT PROPOSAL

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Increase taxes on rich, lower them for rest

By Alex Burness
The Denver Post

Coloradans may be voting this November on a proposal to raise billions of dollars annually by hiking taxes on the rich and using the money on schools and other, unspecified needs of a “growing population and changing economy.”

An issue committee that calls itself Fair Tax Colorado announced Thursday that it will begin collecting signatures to place its proposal, titled Initiative 271, on the 2020 ballot. They’ll need at least 124,632 of them to qualify for the ballot.

It would compensate for the loss in revenue from the tax cut by requiring everyone earning at least $250,000 to pay a 7% income tax rate on their federal taxable income after the first $250,000 and up to $500,000.

Anyone earning more than $500,000 would then pay a 7.75% rate on their income above and beyond the first $500,000, and up to $1 million. Finally, for anyone earning more than $1 million, the measure proposes to tax them $67,700 plus 8.9% of all federal taxable income above and beyond the first million

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Mar 04

Colorado Department of Revenue hopes to start taxing digital movies, music and books

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 By Sherrie Peif

DENVER —The Colorado Department of Revenue will be meeting to gather input before considering changes to the tax code that would make a movie streamed or downloaded from Amazon — among other digital items — taxable in Colorado, a move that has some questioning if this circumvents the state constitution’s requirement that new or increased taxes get voter approval first.

The “stakeholder workgroup” is scheduled for 10 a.m. Wednesday, March 4 at 1313 Sherman St. Room 220 in Denver to “discuss the promulgation of a sales tax rule to clarify the department’s treatment of digital goods as tangible property.”

The department defines “stakeholder workgroup” as a forum for the department to gather information from stakeholders. It occurs before the actual rulemaking hearing. Stakeholders are defined as “individuals who have particular knowledge of the issues being discussed … to provide relevant information, opinions, and constructive feedback and suggestions.”

The public is invited to give input. Anyone who cannot attend in person can request a conference number to call in at dor_taxrules@state.co.us or by submitting comments via email to the same address.

According to a draft of the proposed change to rule 39-26-102(15) “Tangible Personal Property,” “the purpose of this rule is to provide clarification on the definition of tangible personal property.”

Laura Carno, founder of SpringsTaxpayers.com, said regardless of what they choose to call it, when they take more money from the people, they need to ask permission. She called this process a violation of the Taxpayer’s Bill of Rights (TABOR).

“The fact that they are doing this through rulemaking instead of doing it properly by asking the voters shows the contempt they have for taxpayers.,” Carno said. “They just look at us as their ATM.”

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