The Taxpayer’s Bill of Rights, as Governing magazine said in 2017, is the “lens through which Coloradans see” state politics.
But how will voters see TABOR in 2020 and beyond?
TABOR sets revenue limits, which are recalculated every year. When the state takes in more revenue — primarily income and sales taxes — that exceed those limits, the state is required to refund that surplus to taxpayers. Over the years, 21 different mechanisms have been developed (with 18 of the 21 abandoned) to refund those dollars. Currently, the refunds include property tax exemptions, a temporary reduction in the state income tax and a six-tiered refund based on sales tax. Those refunds has been issued nine times in its 26-year history.
Tuesday night’s bruising defeat of Proposition CC, which asked voters to allow the state to retain surplus taxes by eliminating refunds, has dimmed the enthusiasm for some backers but re-energized others.
TABOR has been tweaked along the way since its passage in 1992, most notably in 2005, when voters approved a General Assembly-recommended ballot measure known as Referendum C.
Republican Gov. Bill Owens backed Referendum C, although he was part of the opposition to Prop CC this year.
This was different, he said, a permanent attempt to undermine a tool that makes Colorado government work: That voters have the right to vote on tax increases and hold down spending.
He doesn’t expect another run at TABOR anytime soon.
“This was the most vulnerable part of TABOR,” he said at the victory for the opposition in the Denver Tech Center on election night. “The real popular side of TABOR is voting over every tax increase. This means my friends in the Democratic Party would be crazy to come back after this issue again.”
House Speaker KC Becker, one of the sponsors of the bill that put Proposition CC on the ballot, House Bill 1257, said this week that she doesn’t intend to try again with a referred measure from the General Assembly in 2020, and doesn’t know any other lawmakers who might be thinking about it.
One of the lessons learned from the failure of Prop CC, the Boulder Democrat said, is that people know very little about the state’s fiscal situation.
She pointed out that opponents frequently referred to the state’s $32 billion budget. “We don’t have authority over that $32 billion,” Becker said, pointing out that a lot of it is Medicaid and tuition dollars.
What’s tying up the Legislature, she said, is the fiscal thicket around general funds, which the General Assembly does control. That’s income and sales taxes.
The other lesson is that there’s a general lack of trust in government, she said. “People support more money for roads and K-12, but I don’t think they realize that we would have to cut from human services, prisons or Medicaid” to pay for those things, Becker said.
“They distrust us. We need to do a better job of building that trust.”
The solutions are hard to come by. The gas tax isn’t one of them, she said. It’s not indexed to inflation and buys less and less every year, yet it’s a principal source for transportation funding.
“Colorado will suffer unless we deal with these things,” Becker said.
Scott Wasserman, president of the left-leaning Bell Policy Center economic think tank in Denver, said he’s still digesting lessons from Election Day, but his biggest takeaway is that Tuesday’s vote was not a referendum on TABOR.
“Off-year elections are just challenging,” with a smaller and older electorate. Wasserman said Tuesday’s vote is a verdict on the those who reached voters with the simplest message: the government money versus taxpayer refunds, without an appreciation for the critical public services that taxes aren’t adequately funding. He called it the “TABOR labyrinth,” simple versus complex.
“I think one of the big myths is that TABOR is super popular,” he said on Tuesday. “We did a poll that found out that 40% of Coloradans don’t even know what TABOR is, and the 60% who do are evenly split on it. For me, the Bell, we’ll just continue to educate people on TABOR. We’ll continue to make sure people understand fiscal issues, but we’ve got to get out of the TABOR labyrinth. It’s not an effective way to be discussing these issues.”
“There are real trade-offs on funding” priorities, he said Thursday, such as for full-day kindergarten. Paying for it could mean cutting other services, such as those for the developmentally disabled. “We have to do a lot more work on educating Coloradans on budget realities. At some point, we have to make tough choices. Voters need to see what happens with $300 million payments for transportation bonds and what we have to cut to do that, or how to fund teacher pay and what we have to cut for higher ed or health care.”
But the Bell and its allies aren’t going to stop working on change.
“The needs aren’t going away,” Wasserman said.
Conventional wisdom in the past said that once a tax measure failed, there should be a cooling-off period before trying again, perhaps five years. Wasserman rejects that idea. Next year, he said, will be a “really huge turnout election. If we’re interested in finding out what all Coloradans think about this, we can’t skip 2020.”
Carol Hedges, executive director of the Colorado Fiscal Institute, pointed out that voters are the exclusive decision-makers on tax policy.
“We’re looking for alternatives,” she said last week. People “feel the impact of not funding schools around the state, and a failing and crowded transportation system. Our goal is to figure out the options voters have to address these concerns.”
While the Fiscal Institute has won Supreme Court approval for language on a TABOR repeal, it isn’t the only option; they’re also interested in the graduated tax system.
“Voters believe the tax system isn’t fair,” she said. “They believe that not everyone contributes” equally.
The one drawback on rushing back into the fray, however, is what Hedges calls “funder fatigue. Unless you have a really deep pocket” and consistent ideological support, the election process is a very expensive one, and that might be a reason to delay.
Jesse Mallory helped lead the charge against Proposition CC. The former chief of staff to the Colorado Senate Republicans now leads the Colorado chapter of Americans for Prosperity, a major bankroll for the less-funded opposition to the ballot measure.
“A lot of the opposition has been very clear that they intend to go after full repeal,” he said, just as the results were coming in Tuesday night. “As far as we’re concerned as a chapter, this battle ends and the next one instantly begins.”
The Legislature and those around the state Capitol “should change their perspective on what the average person thinks about TABOR,” Mallory said. He said people understand that TABOR is a guard against government spending. He believes where Prop CC went wrong is that it said “without raising taxes,” which he said led people to ask that if that was true, “why do they need to ask? If they can do it without raising taxes they wouldn't be asking me.”
Former state lawmaker Penn Pfiffner has spent the last two decades with the TABOR Committee, which advocates for TABOR.
“Voters were not fooled," he said. "TABOR has become a very important part of the culture and identity of Colorado,”
Looking forward, Pfiffner could not imagine how citizens who have seen TABOR work so well for the past 26 years be convinced to do any of the things suggested, such as repeal.
“We don’t expect any of these attempts to weaken TABOR to go away.”