This November, the Taxpayer’s Bill of Rights turns 20 years old.
TABOR, as it is commonly called, is beloved by those who want to limit government. Its various provisions are broad and arcane, but the most well-known one — which many citizens love — prohibits Colorado governments, from the state on down to school districts, from raising taxes without a vote of the people.
TABOR has also become the bane of many Democrats who want to protect public services. Depending on who you talk to, TABOR has either been a great ally of Coloradans or their worst enemy.
TABOR is the most restrictive government fiscal limitation in the country and has had perhaps the biggest impact on Colorado of any ballot measure in state history, several experts said. It amended the state Constitution, and it can’t be repealed without getting voters to OK at least two ballot measures.
There are simply too many aspects to TABOR, and putting all of them on one ballot measure would violate the state’s “single subject” rule, which only allows ballot questions to have one topic at a time.
At least 18 government agencies across the state want to free themselves of TABOR’s spending limits, according to the Colorado Municipal League, and seven of those agencies are in El Paso County.
All 18 — including the seven local ones — will ask residents in November to raise taxes and exempt them from TABOR’s spending restrictions.
Hundreds of such votes have been cast over the past two decades, and the other 11 “deBrucing” ballot measures this year range from Denver all the way down to the tiny town of Fleming, population 407. There are also at least six more municipal tax increases on Colorado ballots this year.
DeBrucing refers to TABOR’s author, Douglas Bruce, and his name has been used as a weapon against TABOR since its inception.
Though TABOR is still a hit with conservatives, Bruce, a former state legislator and El Paso County commissioner, ironically became politically toxic to the GOP after multiple scandals. He was convicted in December 2011 of tax evasion and three other tax-related crimes involving a nonprofit he ran for 10 years.
Bruce declined to comment for this story.
So far, 454 towns and 175 school districts have de-Bruced to some degree, also according to the Colorado Municipal League and Great Education Colorado.
DeBrucing is popular with local governments and districts because it gives them more freedom to collect and spend money and has been used to pay for projects from school improvements to fire stations.
Colorado Springs state Sen. Kent Lambert, a Republican, said TABOR has had a “profoundly positive effect” on keeping the government in check.
Conservative activist Jeff Crank, director of the Colorado chapter of Americans for Prosperity, said that he’s totally behind TABOR.
“With TABOR, people have to first separate it from the personality of Doug Bruce,” Crank said.
“Government is always going to whine that it doesn’t have enough money. I have yet to see one that is so lean that it absolutely has to have more revenue,” Crank said. “It’s almost immoral if you think about it, to ask people to give more.”
Not everyone agrees with Crank, though.
State Sen. John Morse, D-Colorado Springs, called TABOR “inherently evil.”
Morse is now one of the plaintiffs in a lawsuit to overturn TABOR, arguing that it’s unconstitutional.
How TABOR works
TABOR is best known for requiring tax increases be voted on by the people, but its more significant impact comes from its other big requirement — a cap on increases in government spending.
TABOR’s mechanisms are more complicated than those two requirements, however. Among many other things, it obligates governments to devote at least 3 percent of annual spending to an emergency reserve fund.
Also thanks to TABOR, all ballot measures that ask for tax increases have to start with the applicable language, “SHALL (DISTRICT) TAXES BE INCREASED”? (Such as issue 1A.) That provision was included ostensibly in TABOR so that ballot questions couldn’t be worded confusingly to sneak tax increases past unknowing voters.
TABOR also orders that county clerks mail to all voters a notice of a tax increase ballot question at least 30 days before the election, with the title, “NOTICE OF ELECTION TO INCREASE TAXES/TO INCREASE DEBT/ON A CITIZEN PETITION/ON A REFERRED MEASURE,” along with contact information for relevant local officials, an estimated amount of the tax increase, and more.
It’s also thanks to TABOR that El Paso County’s ballot initiative 1A, to increase the county’s sales tax for the county sheriff’s office, is in all capital letters.
And it’s why Amendments 64, 65, S and county issue 1B are in lower-case letters — nontax ballot questions can be written in regular language.
But TABOR is so bound in legalese that it’s never mentioned in the seven de-Brucing El Paso County ballot measures for this year. Instead, the ballot questions ask not just for tax increases, but for exemptions to “Article X, Section 20 of the Colorado Constitution.”
The reason for this year’s de-Brucing ballot measures isn’t really TABOR’s tax increase restriction — it’s the financial handcuffs the measure has put on government. No state or local agencies can spend as much as they often want after they reach a certain limit.
TABOR has, in effect, crippled many departments by removing their abilities to spend all the money they bring in, explained economics professor Fred Crowley, of the University of Colorado at Colorado Springs. Governments are only allowed to spend each year what they spent the previous year, plus an amount equal to inflation and the population growth. And that’s not an easy formula to figure out.
“TABOR only allows you to make expenditures in small increments,” Crowley said.
And though limiting government spending sounds positive to many Coloradans, what it means is that once the government pocketbook dwindles, it will take years to recover.
Once the recession began in 2001, it led to billions of dollars in cuts in government services, from education to health care, and more.
Although TABOR doesn’t restrict how much the state can take in, it does require that any tax intake over a certain limit be refunded to citizens.
From the 1997 to 2001 fiscal years, for example, the state refunded $3.25 billion to taxpayers that was over the TABOR limit, according to a report from the Center on Budget and Policy Priorities.
There haven’t been TABOR refunds since 2001, however, and none are projected for at least three years.
The same standard applies to other governments throughout Colorado, including cities, school districts, fire districts, and the like.
Less than half of the state budget, however, is subject to TABOR. It applies only to the state General Fund, which includes sales and use taxes, and taxes on individual income, corporate income, insurance, and a few other things. It doesn’t apply to funds from the federal government, cash funds, and state enterprises.
Until a little over a decade ago, Colorado didn’t have serious problems with TABOR — it just couldn’t grow as rapidly as it previously had, said Crowley.
But once the recession began, particular parts of the state budget were sliced and diced, as state expenditures plummeted under TABOR’s restrictions.
The complicated spending limit was famously called the “ratchet effect” and helped drive down state spending limits for years as tax income and spending went down.
From year to year, when government expenditures dropped, they couldn’t automatically return to their previous levels because of TABOR’s limit spending growth to inflation and the population growth.
After the state began recovering from a recession in 2005 and 2006, it was slated to refund $560 million for the 2007 fiscal year to taxpayers, despite a budget deficit of nearly $500 million. Referendum C, a 2005 ballot measure, headed off that refund.
Part of TABOR’s labyrinthine formula could even be unconstitutional, Crowley said. The measure calculates the “inflation” amount according to the Consumer Price Index from the Denver/Boulder area. But, Crowley said, that could violate the intricate “takings clause” portion of the state Constitution.
To comply with the Constitution, the calculation should be based on the entire state, not just Denver and Boulder, Crowley said.
But nothing has ever been done about that, or about “half a dozen other flaws” in TABOR’s mathematical system, Crowley said.
Finally, the limit was altered by Referendum C.
Referendum C gave the state a five-year timeout from TABOR refunds, and let the state keep almost $4 billion that it otherwise would have had to give back to the people.
The “ratchet effect” was “effectively eliminated” by Referendum C, according to a legislative report. The state is now allowed to spend much more than it had spent the previous year. There’s still a limit on state spending, it’s just higher.
That doesn’t really matter yet, though, because the state’s tax income is still way, way down.
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This November, the Taxpayer’s Bill of Rights turns 20 years old.