Some legislators want to change the revenue caps required in the Taxpayer’s Bill of Rights.
What we think:
Tying revenue caps to personal incomes provides stability — and ensures government won’t grow faster than individual wealth.
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An unlikely bill that changes the revenue limitations in the Taxpayer’s Bill of Rights has crossed another hurdle on its way to becoming state law.
The bill, proposed by Rep. Dan Thurlow and Rep. Larry Crowder, both Republicans, has passed both the Finance and Appropriations committees in the state House. So far, it has bipartisan support.
HB 1187 builds on voter-approved changes to TABOR through 2005’s Referendum C. Under Referendum C, the state can keep — and spend — excess revenues up to a defined cap, determined by a number of factors, including inflation and population increases.
Thurlow and Crowder are proposing changes to that formula, adjusting the caps based on the average annual change of Colorado personal incomes during a five-year period, instead of calculating caps based on inflation and population.
And don’t worry: The bill calls for a referendum, a TABOR requirement since it could add money to the state’s coffers in future years.
Since the constitutional amendment known as TABOR passed in the early 1990s, the state has struggled to maintain adequate spending levels for priorities like education, transportation and other needs — because so much of the budget is mandatory spending, it doesn’t leave much room for other items. And even when times are good, the state can’t expand spending or save. TABOR also limits saving when times are bad, leading to vast cuts in programs, year after year, regardless of whether the economy is growing or contracting.
The new bill has had Republican support, at least so far, and is likely to pass the Democrat-controlled House.
Is it a good idea? It seems so. It would grow government in boom times, but not increase government spending beyond growth in personal incomes. It would reduce the state’s rebates by $133 million in 2017 fiscal year and by more than $209 million in the 2018 fiscal year, according to the bill’s sponsors.
It’s money the state needs to fix roads and bridges, expand transportation infrastructure, lower the cost of education — all meeting the needs of an ever-growing population. In the years since TABOR passed, the state’s share of higher education funding has dropped to around 6 percent, leaving the burden for schools on the backs of parents and Millennials, who are delaying decisions that could affect the economy. Young adults are taking longer to move out on their own, longer to buy houses and cars, longer to start families — due in no small part to the billions in student loan debt they must repay.
Investing in Colorado’s future is paramount. Changing the way the TABOR caps are determined not only erases volatility in state government, but it allows the General Assembly to say yes to infrastructure, to wildfire mitigation on state lands, to transportation needs, to higher education. As jobs become more high-tech — and manufacturing becomes more automated — investing in education is paramount to the state’s success.
TABOR, despite its problems, still has support in Colorado. Its requirement to have voter approval for tax increases makes good economic and fiscal sense. Capping state revenue could also be beneficial to businesses that can use additional revenue to grow their business base. But as written, TABOR hamstrings government spending in areas vital to future prosperity: transportation, infrastructure and education.
Keep TABOR, but change the equation. Say yes to Colorado’s future.