Mar 27

Tax and Expenditure Limitation Act

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As an interesting side note, while TABOR is well-known in Colorado, relatively few states have a similar government spending limit mechanism in their constitutions.  The American Legislative Exchange Council (ALEC) actually has a model bill that is based on Colorado’s TABOR amendment that lawmakers in other states can pick up, make minor changes to, and introduce in their own jurisdictions.  We would bet there are constituents in many states who would appreciate a cap on their legislature’s wanton spending.

http://www.alec.org/model-legislation/tax-and-expenditure-limitation-act/

Tax and Expenditure Limitation Act

Summary

The Tax and Expenditure Limitation Act recognizes the important tradeoff between constraints on the growth of state and local government, and the provision of adequate reserves to meet emergencies and to stabilize budgets over the business cycle. The Act is a constitutional provision designed to accomplish these objectives. The Act links a tax and spending limit to an emergency reserve fund and a budget stabilization fund. The Act also provides for temporary reductions in tax rates and/or tax rebates when surplus revenue accumulates above the tax and spending limit, and the cap on the emergency reserve fund and the budget stabilization reserve fund.

Model Policy

{Title, enacting clause, etc.}

Section 1. {Election Provisions} For any fiscal year that commences on or after____ state and local government districts must have voter approval in advance for any new tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, any markup on products sold through state-controlled enterprises, or a tax policy change directly causing a net tax revenue gain to any district. Voter approval is also required for creation of any multi-fiscal year direct or indirect district debt or other financial obligation without adequate present cash reserves pledged irrevocably and held for payments in all future years, except for refinancing district bonded debt at a lower interest rate or adding new employees to existing district pension plans. Voter approval is also required for suspension of the spending limits imposed by this Act. Continue reading →

Mar 26

RETURN TO OWNER: Tabor Tax Rebates May Be Coming to a Mailbox Near You

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Money IIIt has been almost 15 years, but hard-working Colorado taxpayers may be in for a TABOR refund in the near future.  The combination of an improving economy and tax receipts from the state’s nascent marijuana industry have created a surplus that must be refunded to Colorodans under the state constitution, unless a ballot measure calling for the funds to be retained and spent by the government is passed in a statewide vote.

Of course, there will be fierce resistance from Democratic lawmakers to refund a penny of the excess tax payments that was dropped into the states’ coffers.  It was not too long ago that the Speaker of the Colorado House of Representatives, Dickey Lee Hullinghorst,staked out her position on the issue, saying that “the people would be far better off if we invested that…” and went on to marginalize the refund by comparing it to “50 bucks to spend on a tank of gas or something.”

In case Speaker Hullinghorst has not been part of the middle class for a while, $50 is a lot of money to someone not making six figures.

Hullinghorst’s wild guesstimate of the figure is most likely wrong.  According to current estimates, the surplus tax collections will amount to somewhere between $70 million and $220 million during the 2015 fiscal year.  This would result in refunds between $15 – $89 per taxpayer, with lower-income people getting more.  There is also a possibility that some low earners will get an additional $230, according to a Denver Post story.

We have to ask – are Democrats really representing the middle and lower earners as they claim?  If they were, would TABOR refunds even be a question?

As an interesting side note, while TABOR is well-known in Colorado, relatively few states have a similar government spending limit mechanism in their constitutions.  The American Legislative Exchange Council (ALEC) actually has a model bill that is based on Colorado’s TABOR amendment that lawmakers in other states can pick up, make minor changes to, and introduce in their own jurisdictions.  We would bet there are constituents in many states who would appreciate a cap on their legislature’s wanton spending.

http://coloradopeakpolitics.com/2015/03/26/return-to-owner-tabor-tax-rebates-may-be-coming-to-a-mailbox-near-you/

Mar 26

Colorado roads could get more funding

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Personal income rose enough in Colorado last year to trigger provisions that could redirect $1.25 billion in extra funds to repair the state’s roads and buildings over the next five years.

But those transfers may end not long after they start because of caps linked to refunds made under the state’s Taxpayer’s Bill of Rights, or TABOR.

Personal income in Colorado last year rose 5.6 percent, the third-biggest increase, after Alaska and Oregon at 5.7 percent each, according to a report Wednesday from the U.S. Bureau of Economic Analysis.

Under a law passed in 2009, the state must redirect 2 percent of general fund revenues into the Highway Users Tax Fund and the Capital Construction Fund once personal income growth in the state exceeds 5 percent.

To read the rest of this article, click the following link:
http://www.denverpost.com/business/ci_27785344/colorado-roads-could-get-more-funding

 

Mar 24

Rep. Jim Wilson: War breaks out at the Golden Dome

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(Jim Wilson)

The March Revenue Forecast is in and the “Battle Over Bucks” is gearing up under the Golden Dome. Throughout this session, I have been alerting you to the fact that a battle was brewing over the upcoming budget and TABOR – the Taxpayer’s Bill of Rights. Well, the war broke out this week!

Here is the scoop: The March Revenue Forecast unveiled the amount of new money available for the next budget cycle and all the bills that have been in a holding pattern are lining up for funding. In the MRF for the 2015-16 budget year, Legislative Council projects that the General Assembly will have an increase in General Fund dollars to allocate in the budget. The increase amounts to approximately $831.4 million or 8.7 percent. There is an additional $49.1 million surplus left over from fiscal year 2014-15. These amounts reflect the dollars available to spend even after TABOR refunds and SB 09-228 transfers are accounted for. (There was, however, a decrease of $218.6 million in projected revenues compared to the September Revenue Forecast.)

What does all this mean? I am glad you asked! Overall, the MRF is lower than the September projection, but there will still be an estimated $831.4 million in new dollars to spend. It is anticipated that TABOR refunds will kick in, but the amount refunded will be rather small in the first year. The “dollar debate” is a passionately partisan issue. Democrats continue to seize every opportunity to demonize TABOR as the reason there is no revenue available to fund state programs. Republicans are quick to counter with the fact that the General Fund has increased its expenditures $2.9 billion (with a B!) since 2009, with approximately $831.4 million available for additional growth in the 2015-16 budget. Continue reading →

Mar 22

With taxpayers due refunds for the first time in a decade, lawmakers mull workarounds

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By Charles Ashby
Saturday, March 21, 2015

DENVER — The Colorado Legislature has entered Bizarro World.

The revenue forecast it received last week confirmed that while the state’s economy is booming overall, and its coffers are overflowing with money, it can’t fund everything lawmakers on both sides of the political aisle want because it must return some of the extra money to taxpayers.

That has led many under the golden dome to believe they’ve entered an old Superman comic book that featured a backward Earth.

And it’s all because of the Taxpayer’s Bill of Rights.

That 1992 constitutional amendment put a permanent cap on how much government can grow each year, and requires that any long-term debt and tax increases be approved by voters.

While some lawmakers credit TABOR for preventing the state from going even deeper into the hole during the recent recession, others are blaming provisions in it for hindering the state’s ability to keep pace with funding such big-ticket items as roads and schools.

And now that forecasts are calling for anywhere from $70 million to $220 million in excess TABOR revenues, lawmakers are debating whether to try to work around TABOR limits and fill funding gaps.

Lawmakers on both sides of the aisle already have killed measures their constituents want because they would have an impact on those TABOR refunds, even if they bring in new revenue, such as a measure to allow off-highway vehicles to be licensed to drive on state roads because it would bring in cash, and a felony DUI bill because of its $17 million price tag.

For the first time ever, fiscal impact notes that legislative staffers attach to every bill introduced into a session include what they would do to the TABOR refunds, and if they cut into general fund money that goes to those big-ticket items.

TABOR ISSUES

Under TABOR’s strict provisions, government budgets can only grow by inflation and population growth. But some lawmakers are questioning both as not accurately reflecting how governments operate.

At the same time, other TABOR provisions lump all state revenue into one big pile when it comes to calculating when a refund is required. That formula, however, doesn’t take into account that much of the revenue already is dedicated to specific uses.

The inflation rate under ?TABOR is based on the consumer price index of the Denver-Boulder area, which makes no sense to Sen. Pat Steadman, D-Denver.

Steadman, the longest-serving member of the Legislature’s Joint Budget Committee, says the price of milk that consumers pay has nothing to do with the cost of building a new school or prison.

“The inflation rate, that’s based upon a market basket of goods that consumers buy, but the goods and services government buys are very different from what the average household consumer buys,” Steadman said. “We’re buying prisons. We’re buying roads. We’re buying a lot of things that most people don’t have to pay for, and that has nothing to do with the consumer price index.”

When it comes to population growth, TABOR impacts could spell danger to areas of the state that see their populations decrease, such as in rural Colorado. Continue reading →

Mar 21

Aurora leaders are lobbying against an anti-Gaylord bill that doesn’t exist yet

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It’s not uncommon for interest groups or local governments to go into defense-lobbying mode once they see a bill put forward that they don’t like or even once they hear the details of a bill before its introduction.

But Aurora officials on Thursday launched a pre-emptive strike against a bill to hurt the proposed Gaylord Rockies project that they feel is coming — even though they don’t know what its details might be or who might be sponsoring it.

Members of Aurora’s legislative delegation are writing a letter to colleagues in the Colorado House and Senate letting them know their concerns and pleading for a fair and open process.

Meanwhile, Mayor Steve Hogan told 60 people gathered for Aurora Day at the Capitol on Thursday that they should lobby legislators against taking any actions that could put up obstacles to construction of the 1,500-room hotel and conference center.

“We are concerned that anything that would shut down this project or anything that would affect the decision-making process of the Economic Development Commission would just close business in Colorado,” Hogan said. “If the rules are changed after they’ve been made, it is going to make it difficult for any business sector to come to Colorado with any confidence.” Continue reading →

Mar 19

Rebounding economy, boosts tax revenues, triggers TABOR refunds

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Colorado is preparing to issue rebates to taxpayers for the first time in nearly 15 years.

The latest economic forecasts released Wednesday indicate the state will exceed its constitutional limit on tax collections by between $70 million and $220 million this fiscal year, triggering refunds under the Taxpayer’s Bill of Rights.

How much taxpayers will see when they file their 2015 taxes in April 2016 remains unclear, but the amount is expected to be modest.

The refunds will range from $15 to $89 per taxpayer based on income level, with the lowest-income earners possibly receiving an additional $230 break.

To read the rest of this article, click the following link:
http://www.denverpost.com/news/ci_27739330/rebounding-economy-boosts-tax-revenues-triggers-tabor-refunds

Mar 10

Lessons from 30 Years of TEL Experience

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Yes, you can get involved in your city or state.  TABOR gives citizens the right to vote yes or no on the government increasing your taxes.  To learn more, send an email to info@theTABORcommittee.com

The first tax and expenditure limitation (TEL) was proposed by California Gov. Ronald Reagan in 1972. In the years since then, numerous states have adopted TELs. By studying these laws, we have discovered principles and design concepts for effective tax limitation.

State TELS

In spring 1978, under the leadership of State Rep. David Copeland, the people of Tennessee adopted the first constitutional tax limitation measure in the nation, the work product of a state constitutional convention.

Then came Proposition 13 in California in June 1978. While not itself a TEL (it was primarily a limitation on the growth of property taxes), Prop. 13 was the catalyst that ignited a national tax revolt. Things began to happen quickly across the country:

  • Arizona, under the leadership of then-Senate Majority Leader Sandra Day O’Connor, adopted a TEL referendum in 1978.
  • In November 1978, Michigan adopted the Headlee Amendment, which restricted state spending as a share of personal income.
  • In 1979, California adopted a Prop. 1-type TEL (the Gann Limit) that for the first time limited the growth of state spending by measuring it against inflation and population or per-capita personal income growth, instead of a percentage of state personal income growth, which really tightened the year-over-year control over taxes and government spending.
  • Also in 1979, Washington State adopted a TEL (Initiative 62).
  • In 1980, Missouri adopted the Hancock Amendment, again using a percentage of state personal income growth as the measure.
  • In 1980, Massachusetts’s Prop. 2 ½ drew heavily on the language of California’s Prop. 1 in order to control the growth of local governments.

Lessons Learned

Many other states have since adopted constitutional or statutory controls. But many were not tough enough or sufficiently well enforced or honored to be effective. Circumvention began in earnest in Missouri as the legislature and courts played games with the revenue base and school financing. In California in 1989, wily Assembly Speaker Willie Brown corrupted the Gann Limit formula in a statewide initiative devoted to improving California’s roads and highways. Continue reading →

Mar 10

How TABOR works: Tracking the fate of your 2015 refund

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If state legislators pass all active tax credit bills, your refund would be at least $18.42 less than originally projected.

(CPR: Megan Arellano)

You’ve probably heard you might get a TABOR refund. If you’re like us, you’re wondering how much that could be. We set out to answer that very question.

What are TABOR refunds?

Under the Taxpayer’s Bill of Rights, state spending in Colorado is only allowed to increase at the rate of population growth plus inflation.* Any money the state raises above that amount must be returned to taxpayers through a complex set of formulas.

Between a voter-approved TABOR timeout passed in 2005 and the Great Recession, it’s been a decade since residents last received a rebate. But with Colorado’s economy once again booming, analysts project the state will need to start returning money to taxpayers either this fiscal year or next.**

Continue reading →