Category Archives: Why TABOR Matters

May 22

Ending tax refunds, sports betting on ballot as Propositions CC and DD

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Ending tax refunds, sports betting on ballot as Propositions CC and DD

 By Mike Krause

Proposition CC is the more contentious of the two, asking Coloradans to permanently give up any future tax refunds under the Taxpayer’s Bill of Rights, or TABOR.

TABOR is a constitutional amendment passed in 1992 that, among other things, limits the annual growth of a portion of the state budget to a formula of population growth plus inflation. The state is obligated to refund revenue in excess of that formula back to taxpayers, or get voter consent to keep and spend it temporarily.

So-called “enterprise” revenue is exempt from TABOR limits, and thus is already off limits for refunds.  Enterprises are essentially government-owned entities that provide goods or services and are funded through fees, and which have grown dramatically in Colorado. According to the  Legislative Council Staff, “Revenue to enterprises has grown significantly since the passage of TABOR, from $742 million in FY 1993-94, the first year TABOR was in effect, to $17.9billion in FY2017-18, the most recent year for which financial data are available.”

File photo – Todd Shepherd

But if approved by voters, Prop CC would eliminate what’s left of the TABOR limit, allowing the state to keep and spend any and all excess revenues that would otherwise be refunded back to taxpayers in perpetuity.

The second measure, Proposition DD, would both authorize and tax sports betting in Colorado.

The U.S. Supreme Court in 2018 struck down a federal law restricting commercial sports betting in the states to only Nevada, thus opening the door for Prop DD. If passed, the measure would allow sports betting through licensed casinos in Colorado, as well as enact a 10 percent tax on the profits to “fund implementation of the state’s water plan and other public purposes.”

The propositions are statutory changes, meaning that they need 50 percent plus one of the vote to pass, and that lawmakers can later amend the measures if enacted, as with any other state law.

Ending tax refunds, sports betting on ballot as Propositions CC and DD

May 20

Colorado voters to decide whether to dilute Taxpayer Bill of Rights

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The Center Square analysis

Colorado voters to decide whether to dilute Taxpayer Bill of Rights

Bills that passed during the legislative session would permanently end TABOR-granted tax refunds if voters give their approval

FILE - Voting booth polling place election
Allen J.M. Smith | Shutterstock.com

Colorado Democrats were successful in passing legislation this session that could chip away at the Taxpayer’s Bill of Rights (TABOR) if voters give the majority party what they want.

TABOR is a constitutional amendment that requires voters to approve all tax increases. In addition to being a check on tax and spending increases, TABOR requires voter approval of debt increases. The amendment also ensures taxpayers receive refunds when the government’s revenue increases faster than population growth plus inflation.

It’s also one of the most contentious and partisan issues at the Colorado capitol.

TABOR means that anytime legislators want to raise taxes, they have to seek voter approval at the ballot box. But referendums become expensive and require significant political capital, especially given Coloradans’ recent history of voting down tax increase proposals.

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May 18

Sharf: The revolt of Colorado’s political elites

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Sharf: The revolt of Colorado’s political elites

Laws outlining government powers frequently come with restrictions. (See the U.S. Constitution for an excellent example.) Sometimes, the laws are restrictions, and they include exceptions. And sometimes, people vote down expansions or loosening of those restrictions.

Described by one side as guardrails and the other as a straitjacket, such restrictions very quickly morph into obstacles to be overcome or, in extremis, ignored. That such arrogance is profoundly disrespectful to the people of Colorado hasn’t kept it from being the default position of far too many elected officials.

Examples are legion. In 2018, voters rejected a proposal for a half-mile setback for new oil and gas wells by a 10-point margin. Nevertheless, the current legislature has passed and the governor signed Senate Bill 19-181. That law would allow local governments to ban all new wells, and the state is drafting regulations permitting exactly the setback that voters decisively rejected. Continue reading →

May 09

Colorado legislature moves transportation bond issue to 2020, leaving TABOR refund issue alone on the 2019 ballot

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Colorado legislature moves transportation bond issue to 2020, leaving TABOR refund issue alone on the 2019 ballot

By Jackie Mitchell
In Ballot measures
May 6, 2019 at 11:20 PM

On May 2, 2019, the Colorado state legislature gave final approval to Senate Bill 263, which moved a legislatively referred bond issue from the 2019 ballot to the 2020 ballot. The bond issue was designed to authorize the state to issue transportation revenue anticipation notes (TRANs)—a specific type of bond debt—in the amount of $2.337 billion with no increase to any taxes. Proceeds from the debt would be credited 85 percent to the State Highway Fund and 15 percent to the Multimodal Transportation Options Fund. The maximum repayment cost of the TRANs debt would be $3.25 billion, and it would have to be repaid fully within 20 years. Senate Bill 263 also amended the bond issue to reduce the amount of TRANs that would be authorized from 2.337 billion to 1.837 billion and make other changes.
In the Senate, all three no votes came from Republican Senators. In the House, Republicans were split with 11 voting in favor and 13 voting against. Thirty-nine of 41 House Democrats voted in favor except for two Democratic Representatives who were excused from voting.
Still on the 2019 ballot is a measure to allow the state to retain excess revenue it is currently required to refund under the Taxpayer’s Bill of Rights (TABOR) to provide funding for transportation and education. The revenue would be used for transportation.
Democratic Senator Rachel Zenzinger of Colorado’s 19th Senate District said, “If we were to move forward this year (with the bonding measure), the same thing we saw last fall — with two competing ballot measures on transportation — would sink them both.”
May 06

State could go off a fiscal cliff

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State could go off a fiscal cliff

By: Barry W Poulson

May 5, 2019

Barry Poulson

Colorado has created a fiscal cliff; the state is woefully unprepared for the revenue shortfall that will accompany the next recession. Citizens might be surprised to learn that the state has been pursuing imprudent policies that will result in a fiscal crisis when the next recession hits. It is important to understand how the fiscal cliff was created and what we can do about it.

Over the past two decades, Colorado has weakened the fiscal constraints imposed by the Colorado Taxpayer Bill of Rights. TABOR limits the rate of growth in state spending to the sum of inflation plus population growth, regardless of the amount of revenue the state takes in.

But most state revenue is exempt from the TABOR limit. The exempt funds include the revenue from enterprises and the fees collected by government agencies, which have grown rapidly over this period. As a result, over the past decade TABOR has not constrained the growth in spending, and this year the state will spend virtually every dollar of revenue it takes in. Continue reading →

May 06

Sharf: Opponents of the Taxpayer’s Bill of Rights prove why we need it

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Sharf: Opponents of the Taxpayer’s Bill of Rights prove why we need it

May 6, 2019 By Joshua Sharf

Look at the list of organizations supporting House Bill 19-1257, the bill to ask Colorado voters to permanently repeal Colorado’s Taxpayer ‘s Bill of Rights (TABOR) spending limits. No fewer than 60 groups hired lobbyists to push for the measure, which will appear on November’s state-wide ballot.

Everyone is represented – governments, non-profits, business groups, unions, school districts, government employees.

Everyone is represented.

Well, everyone except the taxpayer.

Which is why we need a constitutional amendment protecting the taxpayer in the first place.

While TABOR has a number of provisions designed to limit government, there are three main ones. The first requires a citizen vote on all general tax increases – income tax, payroll tax, sales & property tax, etc. Fees directly related to delivering a specific government service are exempt. So-called enterprises, which do not receive general tax revenue, are also allowed to raise their fees and charges without a vote, and what’s more, their revenue doesn’t count towards the overall cap the way than regular fees do. Continue reading →

Apr 30

Colorado’s Taxpayer Bill of Rights Should Be a Model for the Nation

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Colorado’s Taxpayer Bill of Rights Should Be a Model for the Nation

Requiring voters’ consent to increase taxes or debt is a very effective check on the expansion of government.
Monday, June 18, 2018
Daniel J. Mitchell
Daniel J. Mitchell
A balanced budget requirement is neither necessary nor sufficient for good fiscal policy.

If you want proof for that assertion, check out states such as Illinois, California, and New Jersey. They all have provisions to limit red ink, yet there is more spending (and more debt) every year. There are also anti-deficit rules in nations such as Greece, France, and Italy, and those countries are not exactly paragons of fiscal discipline.

The real gold standard for good fiscal policy is my Golden Rule. And the best way to make sure government doesn’t grow faster than the private sector is to have a constitutional rule limiting the growth of government.

That’s why I’m a big fan of the “debt brake” in Switzerland’s constitution and Article 107 in Hong Kong’s constitution.

And it’s also why the 49 other states, assuming they want an effective fiscal rule, should look at Colorado’s Taxpayer Bill of Rights (TABOR) as a role model.

Continue reading →