Colorado now ranks dead last among the states for the competitiveness of K-12 teacher salaries. Overall, it ranks “only” 43rd in per-pupil funding for K-12 education when adjusted for regional cost differences. However, the dollar gap between Colorado and the national average has been increasing for more than 25 years.
Why? The answer is TABOR, the Taxpayer’s Bill of Rights, a constitutional amendment passed by initiative in 1992. TABOR attracted voters because it mandates voter approval of tax increases for government at any level in Colorado: the state, counties or municipalities, or special districts such as the Durango Fire Protection District.
I doubt that most voters comprehended the details in the full 4½ pages of the amendment, but anyone who has served as an elected official in Colorado has encountered TABOR’s broad impacts.
Another key TABOR provision requires that year-over-year spending increases by no more than population plus inflation. Taxpayers must receive refunds of any amount over that. Combined with balanced budget mandates, this provision ratchets down public spending by limiting restoration of service cuts made during recessions. To ensure such reductions, TABOR defines “spending” to include savings, e.g., to build a “rainy day fund” in good years.
TABOR does allow elimination of the spending constraint by referendum. Eighty percent (51 of 64) of Colorado counties, 84% of municipalities (230 of 274), and 98% of school districts (175 of 178) have approved such overrides. A vote to enable the state to retain excess revenues for five years (Referendum C) passed in 2005, serendipitously allowing the state to mostly recover from the impacts of the Great Recession.
A 2019 referendum (Proposition CC) would have allowed the state to retain the excess revenues and instead allocate them to education and transportation services. Voters rejected it. Consequently, state revenues rebounding from COVID-19 budget cuts in 2021 will lead to taxpayer refunds in 2022, although $4 billion in one-time federal pandemic funding will substantially compensate for the loss to the state.
By 2000, TABOR’s early impact on K-12 funding prompted adoption of Amendment 23, an attempt to shield education from the TABOR ratchet. The amendment mandated base per-pupil funding would increase at least by the inflation rate, plus 1% for the first 10 years. Consequently, education funding gradually shifted away from local property taxes to the state’s General Fund, its discretionary spending account.
Ten years later, K-12’s share of state funding had grown above 40%. In response, the Legislature devised the “budget stabilization factor,” creating a debt to education to preserve funding for other services. Despite efforts to begin repayment of this debt, the pandemic revenue shortfall increased it to more than $9 billion.
The gradual shift of limited state spending to schools came at the expense of other funding commitments, including higher education. When TABOR passed in 1992, Colorado ranked a mediocre 35th in state funding for higher education. By 2019-20, it had fallen to an abysmal 45th in spending per student and 47th in funding per dollar of personal income. Consequently, Colorado colleges now derive 70% of their income from tuition, compared with 46% nationally.
Overall, rising tuition has led to increasing student debt, prompting many young people to postpone starting businesses or families. For some, high tuition precludes consideration of higher education, thereby limiting their lifetime earning potential.
TABOR has been a disaster for educating Colorado’s children.
However, in the words we all have heard in TV commercials, “Wait. There’s more.” In fact, there is much more to TABOR that constrains government services across Colorado, including in Durango and La Plata County. Some of these I experienced firsthand during my service on the Durango City Council.
Stay tuned.
