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Senate committee kills House bill to loosen TABOR limits

March 20, 2017 Updated: March 21, 2017 at 10:46 am
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photo - Senate Republicans on Monday killed a TABOR reform effort by one of their own to allow the state to retain excess revenue when economic times are good. File photo.
Senate Republicans on Monday killed a TABOR reform effort by one of their own to allow the state to retain excess revenue when economic times are good. File photo. 

Senate Republicans on Monday killed a TABOR reform effort by one of their own to allow the state to retain excess revenue when economic times are good.

On a party-line vote, the TABOR reform measure died in a Republican-controlled "kill committee," where legislation deemed unfavorable by the majority party is sent to die.

What was unique about House Bill 1187 was that the bill was sponsored by two Republicans: Rep. Dan Thurlow of Grand Junction and Sen. Larry Crowder of Alamosa. It picked up one additional Republican vote in the House when Rep. Lois Landgraf, R-Fountain, supported it.

The bill passed the House earlier this month 39-26.

Judging by the legislation's speedy death in the GOP-majority Senate, Crowder and Thurlow remain GOP outsiders on the subject.

"I would ask people to take a look at what you would rather have, a $20 or $30 check in your pocket, or the possibility of a hospital closing in rural Colorado," Crowder said. "We need to step up to the plate."

The bill - which needed voter approval - would have tied the state's spending cap to personal income rather than the current formula: inflation plus population change. Supporters said the current formula is arbitrary and in need of a tune-up after 25 years.

The legislation would have taken a five-year look at the rolling average of the change in personal income from year-to-year. The measure would not have changed a TABOR requirement that voters approve tax increases.

But critics of the bill pointed out that over time, the proposal would have likely resulted in fewer rebates offered to taxpayers. It would have decreased the state's rebate obligation by nearly $133 million in the upcoming fiscal year and more than $209 million in the 2018-19 fiscal year.

Many Republicans looked at it as more money out of taxpayer's pockets.

"We have 44 counties out of 65 that are considered distressed ..." said Sen. Ray Scott, R-Grand Junction. "How does that make you feel as far as what those folks would think about getting any kind of a rebate if they're on unemployment or they can't find a job at a coal mine or wherever."

But Scott Wasserman, president of the Bell Policy Center, a left-leaning think tank for state economic issues, said financial inequality across Colorado is the exact reason TABOR reform is needed.

"Because the Front Range is doing so well, by increasing the amount of total revenue that the state can keep and spend in other parts of the state, that would be an excellent way to move some of the prosperity ... out to other areas of the state," Wasserman said.

The bill had wide-ranging support, including from the Colorado Fiscal Institute, the Colorado Farm Bureau, the League of Women Voters, the Colorado Association of School Boards, the University of Colorado system and AARP Colorado, to name a few.

Supporters said the state shouldn't have to curb spending on critical state services and programs because of a 25-year-old spending limit that didn't take into account the significant growth the state would see.

The state's spending cap, which triggers TABOR rebates, is based on the Consumer Price Index for consumers in the Denver-Boulder-Greeley area, or Front Range consumer inflation. That percentage of inflation from one year to the next is added to the state's percentage of population growth for the year. TABOR-defined revenue, or state fiscal year spending, cannot grow beyond the total percentage. Rebates come out of the general fund, which is used for discretionary spending.

Some economists argue that it is an arbitrary formula. They point out that businesses don't often use the CPI when considering costs, and that population growth is largely unrelated to inflation.

Because most government fees are defined under the TABOR cap, all of the general fund falls under the limit.

The legislation would have amended Referendum C rather than TABOR. Referendum C, backed by voters in 2005, offered a five-year TABOR timeout, allowing the state to retain and spend money above the TABOR limit.

Some critics of the bill argued that TABOR prohibits lawmakers from making a change to the spending cap formula, even if referred to voters. Nonpartisan legislative staff, however, said the move would have been legal since it would have amended Referendum C, which was written into statute, not the constitution.

"What this bill does is follow what TABOR absolutely tells us to do, which is ask if we can keep the revenue," said Sen. Lois Court, D-Denver, who supported the bill. "It does so based on changing the formula in Ref C ... asking the people if we can change that Ref C formula so we can keep some of it but return some of it as well."

Crowder added, "I find it offensive that anyone would think that I would do anything against the constitution," suggesting that a "no" vote is a "slap in the face to the citizens of Colorado."

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