Tabor revenue

The Common Sense Institute applied its calculations to a potential November ballot question on requiring voter approval for raising major fees — those that would generate $100 million or more in the first five years — under the state Taxpayer's Bill of Rights.

Inititiative 295 still needs to turn in 124,632 signatures from registered voters by Aug. 3 to qualify for the ballot, a tall order given coronavirus restrictions and concerns.

The Common Sense Institute, the hub of a business-oriented coalition, noted that the state government is paid for in basically three ways: taxes; state fees and enterprises; and federal dollars distributed by the state

Since voters put it in the Colorado Constitution in 1992, TABOR has kept a lid on taxes using a spending cap based on population growth and inflation, forcing a rebate to taxpayers if their tax revenue exceeds the limit, which happens in good economic times.

Most fees and all federal revenues are exempt from TABOR, which allows those who impose fees to raise them without constitutional limits.

"In 1993, the first year of TABOR limits, only 46% of the total state spending was exempt, or $2,403 per Coloradan in 2019 inflation adjusted dollars. In 2019, 69% of total Colorado state spending was exempt from TABOR, which equates to an amount of $5,787 per Coloradan," the white paper states.

TABOR opponents say limits on the revenue the state can spend make it hard to keep up with growth by investing in things such as roads and education when tax coffers are flush, beyond raising taxes.

Since legislators can't raise taxes without voter approval, which have proven nearly impossible to get on the statewide level, they have turned to raising fees, as Brown notes.

Now the stakes are even higher. In the legislative session that ended this week, the General Assembly cut a quarter of its operating budget, and next year is expected to be just as dire, forcing more cuts to services, state assistance to schools and other unsavory outcomes.

"Most fees and all federal revenues are exempt from the TABOR provisions of the Colorado Constitution, however, which has allowed them to grow outside our state’s constitutional limits on spending," states the paper by Chris Brown, the institute's policy and research director.

Between 2008 and 2018, state enterprise fees had more than doubled on a per-capita basis.

The picture looks worse going back to 2000: State revenue from fees has grown from $222 to $3,136 per Coloradan. Yet, spending from the state budget went from $1,174 per resident to $1,864.

"This means that for every $1 increase in general fund revenue per Coloradan, enterprise fees have gone up $4.22 — more than four times faster," Brown wrote.

The paper continues, "The reasons for this trend are two-fold: First, individual fees have grown, and second, the Colorado General Assembly has moved several revenue sources outside of the TABOR cap by designating them as state enterprises. The primary example is the exemption of most higher education tuition and fees in 2005. Yet even when enterprises related to higher education are removed, total remaining fees have grown from $97 per Coloradan in 2000 to $873 per Coloradan in 2018."

Read the white paper by clicking here.

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