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An arrow aimed at the heart of TABOR

Posted by Kelly Maher on December 19th, 2010
 
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In 2005, Colorado voters approved Referendum C (a five-year timeout from the Taxpayer’s Bill of Rights) that allowed the state of Colorado to keep $3.6 billion (since revised upward) that it otherwise would have had to return to taxpayers. Separately, the Associated Press recently reported that in the past ten years, “Colorado has amassed $3.7 billion in obligations that it may never pay.” And still the state is projected to be almost $1 billion in the hole in the next fiscal year.

So, when people starting targeting TABOR for “reform,” think about those many billions of dollars and ask yourself: where did it all go?

The fiscal accountability of TABOR, which requires voters to approve tax increases, is a key reason Colorado is in as good of shape as it is. If you need proof that government will expand to fit any budget (and beyond) take a look at the fiscal messes in California and Illinois, which The New York Times recently headlined, “Mounting Debts by States Stoke Fears of Crisis.”

Government will grow regardless of who’s in charge unless there are external constraints. Operating under TABOR has its challenges, but we need to acknowledge its many successes since voters approved it in 1992.

Expanding budgets is easy; constraining them is hard. Which brings us to a proposed ballot initiative from the Colorado Fiscal Policy Institute that we’ve been documenting and discussing the past few days.

In my view, it threatens to gut and bypass TABOR’s intent that citizens be told clearly whether a ballot measure will raise taxes.

Their proposal has at least several components that should raise the ire of any Coloradan seeking fiscal discipline. It proposes to:

- Replace the current 4.63% flat tax rate with a graduated tax whereby the median bracket would be 4% and the upper bracket would be at least 6%. Actual rates and brackets would be determined by the legislature.

- Extend the current 2.9% sales tax on goods to goods and services, but reset the rate at 2.7%. The legislature would have one year to determine what services in addition to health care would be specifically exempt from this tax.

- Repeals the current bans written into TABOR on a statewide property tax; and on real property transfer tax; and on a local income tax.

According to the Colorado Constitution, any initiative that increases taxes must start with the language:

Ballot titles for tax or bonded debt increases shall begin, “SHALL (DISTRICT) TAXES BE INCREASED (first, or if phased in, final, full fiscal year dollar increase) ANNUALLY…?” or “SHALL (DISTRICT) DEBT BE INCREASED (principal amount), WITH A REPAYMENT COST OF (maximum total district cost), …?”

Yet the proposed initiative, Modernizing Colorado’s Revenue System, doesn’t contain that language. At the Title Setting Board meeting last week, Dee Wisor, the counsel for the proponents of the initiative, explained to Board Member Sharon Eubanks that it all depends on what a “tax increase” actually means:

“I think partly, Sharon, this question turns on an analysis of how you measure what is a tax increase. Is it measured from the perspective of one or more taxpayers - or is it measured, in fact, in the aggregate from the perspective of the taxing entity, in this case, the state. And, in fact, will the state under this proposal really even receive more revenues or is the structure . . . Are we really talking just about, as implemented by the General Assembly, a structural change that redistributes who pays the taxes as opposed to resulting in more tax revenues for the state. And that may dictate the decision on whether or not you have to use the mandatory language of: “Shall state taxes be increased…”

What is a tax increase?

Or, as President Clinton once said, “It depends on what the meaning of the word ‘is’ is.”

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    ABOUT THE AUTHOR: Kelly Maher
    Kelly, a co-founder of WhoSaidYouSaid, brings more than 10 years of campaign and policy work experience. In addition to her skills in grassroots activism and organization, Kelly has a knack for distilling complex issues into accessible messages that resonate with voters. Her policy specialties include health care, education, employment and tort reform. Follow Kelly on Twitter at @okmaher.

5 Responses to “An arrow aimed at the heart of TABOR”

  1. Gregory Golyansky says:

    Well done!

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  2. Rob McNealy says:

    Why are Colorado Republicans complaining about TABOR now? They actively had a chance to not only defend TABOR, but actually make some real inroads at reducing the size, scope and power of government with 60, 61, and 101. However, they they came out against the measures.

    Republicans like big government and big government spending. Complaining now about this initiative is nothing more than toothless rhetoric.

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  3. Debbie Schum says:

    “Smaller government and lower taxes” is the mantra of the GOP…unless of course that means actually lowering taxes and reducing the size of government!

    On the one hand, we have the tax and spend party-on the other we have the borrow and spend party. Oh, wait…it’s not a tax, it’s a FEE. Oh, wait…it’s not borrowing, it’s a certificate of participation!

    The GOP only wants to government to be small enough to get under your bedroom door. Other than that, they LOVE expanding government-so long as they are the dictators in charge.

    BAH…none of these goons is believable anymore!

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  4. Kelly Maher says:

    @Gregory - Thank you!

    @Rob - I don’t exactly know how you could interpret this as me “complaining” about TABOR. But okay. Hope you have a Merry Christmas.

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  5. Gregory Golyansky says:

    Kelly,

    I do like your article; however, Rob does have a point. During the last election the Republican Establishment behaved in the most shameful manner possible by opposing Amendment 60, 61 and Prop. 101. Rob and I were on the same side in this fight and were disappointed to discover that the majority of our opponents (in various debates) were Republicans (usually associated with the Bill Owens’ Administration).

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