Colorado Democrats were successful in passing legislation this session that could chip away at the Taxpayer’s Bill of Rights (TABOR) if voters give the majority party what they want.
TABOR is a constitutional amendment that requires voters to approve all tax increases. In addition to being a check on tax and spending increases, TABOR requires voter approval of debt increases. The amendment also ensures taxpayers receive refunds when the government's revenue increases faster than population growth plus inflation.
It’s also one of the most contentious and partisan issues at the Colorado capitol.
TABOR means that anytime legislators want to raise taxes, they have to seek voter approval at the ballot box. But referendums become expensive and require significant political capital, especially given Coloradans’ recent history of voting down tax increase proposals.
Bills that passed this last legislative session – while not yet signed by the governor – would permanently end TABOR-granted tax refunds if voters give their approval. If they do so, it would mean the most significant reform to the law since its inception.
House Bill 1257 will ask voters to allow the state to keep excess revenues typically refunded under TABOR. The question will appear on the ballot in November. An accompanying bill, House Bill 1258, allocates the excess revenue the state would keep if approved to K-12 education, higher education, and transportation.
Colorado's population growth since TABOR was passed could be one of the amendment's hurdles going forward.
TABOR was passed by voters in 1992 with a 53.7 percent to 46.3 percent margin. Similar measures had failed eight attempts at the ballot box in over two decades starting in 1966.
But since then, Colorado’s population has exploded from 3.3 million residents in 1990 to 5.76 million today.
Both sides of the issue say education on what TABOR is and what the ballot measure will do will decide the outcome.
Senate Minority Leader Chris Holbert, R-Parker, acknowledged the demographic issue TABOR faces in a recent interview, saying many voters in Colorado now didn’t live in the state when the amendment passed.
That means continued education on what TABOR does is needed. Most of those “newer” voters don’t realize taxpayers, not politicians, chose TABOR, he explained.
“That’s the Taxpayer’s Bill of Rights, it was put in our constitution by the taxpayers – a vote of the people – and the empowerment the people have, the protection the people of Colorado have, by not empowering, no longer empowering our legislature to create a tax or raise a tax rate without a vote of the people,” Holbert said.
Scott Wasserman, president the liberal-leaning Bell Policy Center, said the ballot measure is “the least the state can do.”
“I’m hopeful and I do feel confident that if voters are presented the facts on this, if they understand how great the need is … that they will see this as one of the simplest things they can do to make sure that when times are good we’re investing in ourselves and preparing for the next recession,” he said in an interview.
Holbert and other supporters of TABOR are skeptical the allocated funds would end up funding education and transportation, as House Bill 1258 says.
Voters approved a similar measure to House Bill 1257 in 2005 called Referendum C, which was a 5-year timeout from TABOR spending limits. The referendum was an attempt at making up for recession-area budget cuts, and the excess revenue was supposed to go to funding for K-12 education, higher education and transportation.
Except that revenue didn’t fund what was promised, Holbert said.
“The promise is that money will be spent on higher ed, K through 12, and transportation,” he said. “Specifically for us, we hope that means roads and bridges. The voters of Colorado were presented that same opportunity in 2005 when [Referendum C] passed, and yet the money was not allocated to roads and bridges, to transportation. By some estimates, over $19 billion should have gone to roads and bridges and it didn’t.”
“My appeal to voters is: don’t fall for it again,” Holbert said.
Voters’ recent history indicates they’re still supportive of TABOR and disfavor tax hikes at the state level. Proposals were shot down in the last election that would have hiked taxes to fund transportation and education. A 2018 survey by the University of Colorado Boulder showed voters supported TABOR by a 45 percent to 26 percent margin.
Colorado Rising Action, a conservative advocacy group that’s among the most vocal of TABOR’s supporters, believes Coloradans will continue to support the amendment.
“Since its inception, politicians in Colorado have been trying to find ways to work around the Taxpayer's Bill of Rights through fees and enterprises because it ensures a reasonable limit on new taxes and spending,” said Lindsey Singer, the group’s communications director. “I believe that the majority of Coloradans will see the ballot initiative as a threat to TABOR and will vote to uphold the Constitution.”
The Bell Policy Center believes that overall TABOR has been too restrictive for the state to invest in public services and has helped exacerbate economic inequality in the state.
“On the surface things look great in Colorado. We’ve often been called the number one economy in the country, but at the same time you look at, say the cost of child care, it’s extremely expensive for families,” Wasserman said. “We have the second highest attainment gap between Latino students and their white peers; we’ve got about a quarter of our state living at or below the self sufficiency standard.”
“If Colorado were even playing it average in terms of its public investments, many of those gaps would close,” he said.
Wasserman said the center will likely be active in getting the ballot measure passed.
“While this is a big step forward, this doesn’t solve all our issues,” he noted.
While Republicans and fiscal conservatives are confident in TABOR, taxpayers could see continued increases in fees, something Democrats have used to skirt TABOR requirements since voter approval isn’t required.
Instead of increasing fees and getting rid of TABOR, lawmakers should look at existing funds, Holbert said.
“TABOR is working, TABOR is not the enemy, TABOR is not a cause for a lack of funding,” he said. “Democrats I think are finding another opportunity to say ‘TABOR is the problem, we need to get rid of TABOR.’
“TABOR is something we ought to be grateful for,” the Senate minority leader said.