The Taxpayer’s Bill of Rights has lowered Colorado tax burdens, but at the expense of public services even beyond the education system discussed four weeks ago (Herald, Jan. 21).
TABOR allows government annual spending to grow no more than population growth plus inflation as measured by the Consumer Price Index, but the cost of government services increases faster than that of consumer goods. Consequently, from 1995 to 2018 the cost of the four largest programs – K-12 education, human services, health care and corrections – grew from 70% to 80% of the state’s General Fund, reducing funding for others by one-third.
Two consequences stand out. In the face of a national COVID-19-related mental health crisis, Colorado already has the highest rate of adult mental illness and the lowest access to treatment services of any state. And, with gasoline taxes fixed at 1992 levels, the state has accumulated a multibillion-dollar backlog in transportation projects.
Every referendum to address such funding needs by raising the state’s sales or income taxes – 10 in all – has failed. The Legislature has resorted to various fee increases as substitutes, but even fees have faced court challenges from TABOR partisans as being taxes in disguise.
TABOR does not just limit tax increases, it prescribes the kinds of taxes that different governmental entities can levy, including prohibiting real estate transfer taxes. It also mandates referendums on bond issues and precludes conducting required referendums in special elections. Consequently, multiple funding initiatives can crowd onto a single ballot.
A local example occurred in November 2016. Besides the many candidate choices, from president to judges, the six-page ballot included referendums on six constitutional amendments, three statutory initiatives and four local fiscal issues. Both La Plata County referendums failed – a property tax increase for the road and bridge fund and a bond for a new airport terminal. School district referendums both passed – property taxes for Durango 9-R and a bond for Bayfield 10-JT-R.
Jurisdictions that hold non-November elections can avoid competing initiatives, allowing better voter attention to the ballot issue itself. For example, in its April 2019 election, Durango passed a sales tax to support street maintenance, whereas a more complex proposal had failed on a ballot crowded with other fiscal referendums in November 2018. Waiting for biennial City Council elections, however, can delay important initiatives, such as a bond to fund the cost of connecting Lake Nighthorse storage to the city water system as a hedge against the ongoing drought.
TABOR’s complexity prompted the Legislature in 1994 to propose Amendment A, which limits ballot referendums to single subjects. Voters approved it. Consequently, short of complete repeal, only piecemeal TABOR amendments remain possible, each one entailing the expense of a statewide campaign, even for proposals referred by the Legislature. Otherwise, proponents also must mount a statewide signature campaign to get on the ballot.
Few voters likely understand TABOR’s complex negative consequences, but most value the right to vote on tax increases, yielding dim prospects for repeal. An alternative judicial effort asserted that TABOR denies the “Republican Form of Government” guaranteed by the U.S. Constitution. Success appears unlikely after the 10th Circuit Court of Appeals dismissed the case in December.
Where might TABOR amendments begin? I suggest eliminating the prohibition of real estate transfer taxes while restricting revenue to support affordable housing and homelessness programs – as Aspen already does with its pre-TABOR tax. This idea holds great appeal in a time of rampant real estate inflation. Another initiative might redefine “spending” to include saving in good budget years to avoid even greater permanent revenue losses during inevitable recessions.
Unless a Supreme Court judgment invalidates TABOR, Colorado politics will continue to include an unending sequence of referendums to mitigate its fiscal impacts.
