The Taxpayer’s Bill of Rights is what Governing magazine said in 2017 is the “lens through which Coloradans see” state politics.
But how will voters see TABOR in 2020, or beyond?
TABOR sets revenue limits, which are recalculated every year. When the state takes in more revenue — primarily income and sales taxes — than allowed by TABOR, 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) on how to refund those dollars. Currently, the refund mechanisms include property tax exemptions, a temporary reduction in the state income tax and a six-tiered refund based on sales tax. Those refunds have been issued nine times in its 26-year history.
Nov. 5’s bruising defeat of Proposition CC, which asked voters to allow the state to retain surplus taxes, 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 when she was debating Michael Fields of Colorado Rising Action in the run-up to the vote, he 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,” as former Gov. John Hickenlooper called it, 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. “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 indicated. 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,” she said.
While she doesn’t plan to take on TABOR again in 2020, Becker said she didn’t regret trying it in 2019. “We definitely learned things and advanced the conversation. As legislators, if we’re not addressing tough issues we’re not doing our jobs.”
Educating voters about TABOR may play a role in the future. Becker said that those conversations will continue, both inside and outside the state Capitol. “I’m disappointed, but it’s worth a try. You have to keep trying.”
Douglas Bruce, who led the effort to pass TABOR in 1992, said the limit on government is necessary because politicians, judges and the press can’t be trusted to protect freedom.
He said giving citizens the right to vote on tax increases and other acts of government are what this nation is founded on. Bruce said the Legislature, led by Democrats, wants to impose socialism, and voters won’t let them.
“We still have enough people to say, ‘Hell, no,’ “ Bruce said after this week’s vote.
Scott Wasserman, president of the left-leaning Bell Policy Center economic think tank in Denver, 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 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 funding for 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.
They are exploring ideas like a graduated income tax structure, as well as full repeal of TABOR, a ballot measure currently in process and advanced by the left-leaning Colorado Fiscal Institute.
The graduated income tax idea isn’t new; it was included in the 2018 ballot measure Amendment 73, which would have raised taxes to pay for public education and which voters turned down last year.
“There are ways to reform [TABOR] and still keep limits on government spending and keep pace with the economy.” Wasserman said.
Conventional wisdom in the past said that once a tax measure failed, that those who want to try again should have a cooling-off period, perhaps five years. Wasserman rejects that idea. 2020 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.”
“It’s a shame. We’re the No. 1 economy in the country and it doesn’t feel like that.”
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.”
He added, “We know that they’re coming for it.”
The great thing about TABOR, he said, is that government can make a proposal but it has to benefit taxpayers. He said that’s why taxing measures pass at the local level, because people can see the direct benefit and decide accordingly.
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 a full repeal.
“We don’t expect any of these attempts to weaken TABOR to go away.”