TABOR: A Losing Proposition for Colorado

Earlier this month, voters in Colorado demonstrated their dissatisfaction with the state's constitutional spending limit law — otherwise known as TABOR--by voting in favor of suspending its spending limits for five years. TABOR, the "taxpayer's bill of rights," had contributed to a significant decline in the state's public services since its enactment in 1992. Unfortunately, this victory in Colorado has come after years of disastrous tax and spending practices eroded state services, harming Colorado's education system, health care programs, and transportation infrastructure. Despite the lessons learned in Colorado, other state legislatures are attempting to pass measures that would restrict spending in much the same way TABOR did in Colorado. Proponents of these measures argue their initiatives are vastly different than Colorado's TABOR, but despite superficial differences all share one underlying intent: to drastically reduce the size of state governments or "starve the beast." Residents of these states would be wise to study the example of Colorado, lest they become victims of the same draconian spending constraints that have proven so detrimental to that state's economy and to its citizens' quality of life. TABOR laws are initially appealing because they appear on the surface to be responsible attempts to scale back state spending and give tax breaks when there is an excess of state revenue. However, Coloradans found with TABOR that any minimal savings they received from tax refunds were lost in higher cost and deteriorating quality of services. Residents were forced to pay more for such public services as education, health care, access to parks and recreation areas, public transit, where the state had previously covered a greater share of the cost. TABOR works by limiting state spending to a formula based on population growth plus an inflation factor. The formula has proven insufficient over the long-term for providing adequate revenue to continue important state services as population increases, particularly when unexpected needs arise, such as a natural disaster or economic downturn. Anti-Tax Advocates Continue to Push TABOR During the 2005 legislative session, 23 states considered TABOR proposals at one level or another. Most never made it past the committee level or floundered before being brought up for floor debate. Voters in California, however, were presented with a TABOR-like ballot initiative in the state's Nov. 8 special election. Sixty-two percent of voters rejected the TABOR measure, which would have established a new limit on state spending by restricting it to the previous years' spending plus the average annual growth in revenues over the previous three years. The measure was defeated over concerns that it would have led to a significant reduction in future state spending similar to that experienced in Colorado. Despite their initiatives having met with little success in 2005, anti-tax advocates plan to continue pushing proposals in 2006, including in the legislatures of Arizona, Kansas, Michigan, Missouri, Ohio, Oklahoma, Oregon, Nevada, and Wisconsin. Many are also expected to attempt passage of TABOR-like ballot initiatives in November when voters will elect federal representatives in mid-year elections. The outcome of the vote in Colorado, however, sends a strong message to these states that TABOR-like laws are ultimately a losing proposition. The fight over unsustainable spending limits is already heating up. In Nevada, for example, the State University Chancellor Jim Rogers is already planning to use his political action committee in an effort to block gubernatorial candidate Bob Beers' TABOR-like tax cut measure. Rogers has criticized Beers' Tax and Spending Control for Nevada initiative and hopes to educate state lawmakers, regents and community members about the harm done in Colorado by its TABOR law. Rogers and others are using resources and materials developed for the Colorado fight against TABOR to effectively make their case in Nevada. Hopefully the people of Nevada will absorb some of this information and avoid the near-guaranteed decline in state services seen in Colorado. Such wariness would pay off. As David Bradley from the Center on Budget and Policy Priorities aptly points out, "The only state to actually live under TABOR has had to suspend it for five years. [The recent TABOR] vote reflected the actual experience of deteriorated government services." The "starve the beast" philosophy encapsulated by TABOR laws starved Colorado of the funds necessary to provide the most basic of state services. The successful reversal of this law has now illustrated just how out of sync the "starve the beast" philosophy is with the will of the public.
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