Dealing with TABOR, one increment at a time

The 25th anniversary of the passage of the Taxpayer’s Bill of Rights gives me a chance to reflect on how it affected my time in elected office. Though citizens have approved relaxing its formula or removed it from some levels of government, one provision seems here to stay: the citizen’s right to vote on new taxes. For state leaders, the direct democracy requirement means that unlike 49 other American states, our legislature has a limited tool kit to handle the basics of government like transportation and school funding.

We have never shied away from making our case for issues of importance to the voters. In Denver, several initiatives, such as funding for pre-school and major construction projects, including the new justice center and jail, had failed repeatedly. We dramatically expanded public outreach and provided in detail how funds would be spent, and the voters responded positively.

In 2004, when the Metro Mayors Caucus partnered with RTD to fund 122 miles of new transit via FasTracks, the greater detail and transparency led all 34 mayors, the majority Republicans, to endorse the initiative, which won by 16 points.

TABOR’s cap on state revenue is one of the many rules that comprise our “fiscal thicket.” The cap was set a decade ago and it increases by population and inflation each year — it won’t drop during a recession as originally intended. State voters changed

that rule in 2005’s Referendum C.

The cap only affects the state right now because some revenue is accounted for improperly. For the third legislative session in a row, failure to re-categorize the Hospital Provider Fee outside of TABOR is preventing us from having a productive discussion about school funding and transportation needs. Since Fiscal Year 2007-08, except for the hospital provider fee, the rest of our funding growth has been below population and inflation growth. Though TABOR receives most of the attention, some people may be shocked to hear this: With the provider-fee change, the state’s TABOR cap would be adequate for a long time.

Looking ahead, it is the interaction of TABOR, the Gallagher Amendment, and Amendment 23 — all in the state Constitution — that is the problem. Around 50 percent of property taxes and around 40 percent of the state’s general fund support K-12 education. But the system of rules that 1) indiscriminately lowers property taxes and shifts the cost to the state (Gallagher) and 2) mandates growth in education spending (Amendment 23) regardless of circumstance is unsustainable. TABOR’s role in this nonsense is to make the drops permanent. Over time we can see the negative impacts in high college tuition, General Fund support for state parks that has been zeroed out, and critical maintenance of our transportation network and state buildings put off until the last minute. The list goes on.

Here is the challenge: How can Colorado keep its thriving economy without losing its quality of life? What role do these laws play in that future?

First, we must be able to keep the money we have, with the limit the voters approved. That can be done with the provider-fee enterprise, and state legislators can make that change. Second, the economic future of the state hinges on a ballot issue that builds our infrastructure to maintain our economic momentum and at the same time create the conditions for sustainable and vibrant growth across the whole state. Third, the nearly 900,000 students in public school deserve a comprehensive review of how we pay for K-12 education. Thirty years ago, local property taxes paid two-thirds of K-12 costs; now, that two-thirds comes from the state. But richer districts have taxed themselves outside of the normal formula, and it is not the case that every kid in Colorado is getting the same shot at a great education. The system shouldn’t be rigged against some kids solely based on where they live. Money isn’t everything, but the gaps between rich districts and poor districts ultimately mean a workforce that won’t be as competitive as it could be and individual Coloradans won’t be as successful as they could be.

We have the toughest budget rules in the country. That is not necessarily a bad thing. However, their unintended interplay is a serious concern. When we consider the first 25 years with TABOR, we see that we managed our way through the tangle. It certainly wasn’t perfect. In the lesson of the past lies both the good news and the bad: It is up to everyone to play a part in planning the future of this state. On the one hand, changes take time and sometimes the choices we have to make are unduly hard. On the other hand, we have to listen to each other and collaborate to find agreement on policies that benefit all of Colorado.