From the Wall Street Journal on February 28, 2005:
Colorado Governor Bill Owens used to be so enamored of his state’s constitutional caps on spending that he instructed fellow Republicans about the merits of tax and expenditure limits. But that was then. These days you’ll find Governor Owens crafting rationales to bust those caps and spend the extra loot that comes with a growing economy.
Just as important is how these strictures helped Colorado weather the last recession. By forcing lawmakers to restrain spending during the boom years, the state was better able to cope with revenue shortfalls when the economy went south. “While states like California had a $38 billion deficit because they had spent all their excess tax revenue and increased the size of government, Tabor saved Colorado’s financial fanny,” says Jon Caldera of the Independence Institute, a Denver think tank.
That sounds like the Governor Owens who not too long ago — October 16, 2003, to be exact — used the op-ed pages of this paper to tell other governors that the way to tackle fiscal challenges is to “tie the growth in the state government to the annual growth in inflation and population, as we have done in Colorado.”
Now Mr. Owens is working with the Democratic Legislature to undo Tabor, and he’s using the same excuses he once excoriated. Tabor limits spending to the previous year’s level, plus inflation and population growth. This means that recession years “ratchet down” state spending levels and force politicians to make tough decisions, which is what they’re paid to do.
Citing fallout from the recession and another state constitutional provision that mandates annual hikes in spending on K-12 education, Mr. Owens has proposed changes to Tabor that would allow the state to spend a half-billion dollars more each year — money that normally would be refunded to Rocky Mountain taxpayers. Moreover, the Governor wants to eliminate the Tabor limits on how fast government can grow as a share of the economy. The only saving grace is that the constitution requires legislators and voters to approve these changes.
One measure of how far Mr. Owens has shifted fiscally is the local media coverage, which was quick to note that his proposals are very similar to what tax-and-spend Democratic Legislators have been pushing for years. Mr. Owens has been at politics long enough to know that if you’re a Republican being praised in the press for having grown in office, then you’ve probably surrendered some principle.
Instead of taking on the real problem, which is the mandated increase in education spending known as Amendment 23, Mr. Owens has taken it off the table. K-12 outlays are already 47% of the budget — the largest line-item — and much too big an expenditure to ignore. The Governor argues that adjustments to Amendment 23 can be proposed only in an even-numbered year, which some dispute. But even if that’s true, the responsible move for the Governor would be to hold off on any Tabor tinkering until education spending can also be part of the discussions.
Not that we think Tabor needs tinkering; the dread ratchet effect is its most important feature and one of the reasons that states like California, Maine, Kansas and Ohio are considering their own version of Tabor. By forcing lawmakers to put the brakes on spending, even after a downturn in the economy, Tabor gives government an incentive to take on self-correcting tasks that aren’t in its nature. Selling off excess assets and reforming procedures for procurement and competitive contracting aren’t high on a state’s list of priorities unless there’s a fiscal squeeze. Tabor helps state governments find these efficiencies. Bill Owens used to know that.
