TABOR & Proposition CC: Providing Context to Colorado's Tax Problem

Edward Baisley

Prof. Matthew Hitt

POLS 304

Dec. 2019

Blog Post 3 (TABOR and Proposition CC)

Colorado's tax system is very unique in comparison to pretty much every other state in the U.S. Arguably the biggest aspect of the tax system that is unique is the amendment to the Colorado Constitution known as TABOR or the Tax Payers Bill of Rights. This amendment which was drafted into law in 1992, has many implications for Colorado's state and local governments. One of the main implications is that TABOR requires the state and local governments of Colorado to acquire voter approval before any tax increase can be implemented. Some other more less known implications are detailed by Denver Post author Anna Staver, she explains that TABOR:

“Limits how many tax dollars governments can keep … It’s called the TABOR cap, anything a government collects above the cap gets returned as a TABOR tax refund … (TABOR) Limits when lawmakers can ask voters to raise taxes …

Prohibits charging certain Coloradans more in taxes than others … Bans raising certain kinds of taxes, like ones on real-estate transfers.”[i]

It is important to keep in mind that these are only some of the implications that TABOR has on our tax system, there are others that I did not include. Nonetheless we can see how impactful this amendment really is, in terms of how it effects our government’s spending.

As many of us CSU political science majors know, the issue of TABOR is not without controversy within the realm of our local and state politics. TABOR has arguably been one of the most dominate issues of debate within Colorado politics since its inception in1992. The state government as well as a handful of localities have tried for over 20 years to find ways around the tax restrictions put forth by TABOR. And although a good majority of localities throughout Colorado have been successful in their attempt to “de-Bruce” their tax systems, the state government hasn’t had much progress. For clarification, author Molly Armbrister  –  Reporter for Denver Business Journal, explains that the act of de-Brucing is a reference to, “tax activist Douglas Bruce, author of the 1992 Taxpayer's Bill of Rights constitutional amendment …de-Brucing refers to ballot measures that allow governments to opt out of the revenue limits and keep amounts raised by existing tax rates.”[ii]

Which brings us to Colorado’s ballot measure Proposition CC. In short, Proposition CC would have (without raising taxes) allowed the state government of Colorado to keep the additional tax revenue that it collects over the TABOR cap limit that was discussed earlier. In other words, it would allow our state government to bypass the TABOR tax refund requirement, which would allow the state to ultimately have more tax revenue. It is important to note, that within the contents of Proposition CC the government has committed to spend all the extra tax revenue on road infrastructure, K-12 education, as well as higher education. Jacy Marmaduke, author for the Fort Collins Coloradoan provides some of the finer details of Proposition CC, she explains that, “The state is asking voters if it can permanently keep all revenue that surpasses the mandates of the Taxpayers' Bill of Rights, which requires taxing entities to give back any money exceeding the rate of population growth and inflation … State projections estimate each spending area would get $103 million in the 2020-21 budget year and $114 million in the 2021-22 budget year.”[iii] With these projections in mind, we can begin to understand why the state government of Colorado was pushing so hard for this Proposition to pass, as it would have allowed them to fund hundreds of millions of dollars’ worth of projects throughout the three designated spending areas.

However, as most of us know at this point, with a vote of 770,700 to 638,422, Proposition CC did not pass. Nonetheless, I think the arguments surrounding this proposition highlight the fundamental controversy that has defined the conversation around TABOR since its inception.

On one hand, those who disfavor TABOR and likely supported Proposition CC argue that Colorado’s current tax system under TABOR, is restricting the state government from providing the services necessary to keep up with ever growing population, specifically services in the areas of public infrastructure, K-12 education, and higher Education. While those who support TABOR and likely disfavor Proposition CC argue that, “it’s a great tool for checking the growth of government and the power of elected officials,” ultimately giving the citizenry more of say in how their government spends money (Straver).[iv]

To some extent, both sides of this argument seem to represent the age-old political disagreement in the United States over the concepts of big government vs. small government or in other words, more government vs. less government. However, I believe it is important to take into account the economic context in which TABOR resides. For instance, Colorado has been one of fastest growing and healthiest economies in the United States for a number of years. In fact, earlier this year usnews.com ranked every state in the U.S. in terms of their economic health, using the combination of 3 different metrics including measurements of the, “business environment, employment, and growth (in terms of population and GDP).”[v] Needless to say, they ranked Colorado as the #1 economy in the United States of America, and while I understand that different metrics/measurements will produce different results, I can say that every single state economy list ranking that I found had Colorado in the top 5 state economies. So in that sense, it is almost undeniable that Colorado has one of the best economies in the country.

All of this is to say that even though Colorado ranks as one of the best economies in the nation, we as a state rank very poor in terms of the amount of money spent on things like education. For example, the nonpartisan website greateducation.org provides some documented statistical evidence that shows Colorado ranking, “50th in teacher wage competitiveness, 47th in per pupil spending, (and) 41st in pupil-teacher ratio.”[vi] The graphs below provide visuals for some of these rankings. Furthermore, to put it in terms relevant to us as college students, “Tony Frank said CSU would be likely to get roughly $15 million of Prop CC funding in fiscal year 2020 and $9 million in fiscal year 2021. He said the money is sorely needed in a state that ranks 48th in the nation for per-pupil higher education funding,” (Marmaduke).[vii] These rankings provide some understanding as to why TABOR could be considered problematic for the state government, since they are virtually barred from raising more taxes to address these issues. 

  

https://www.greateducation.org/statistics-faqs/statistics/

https://www.greateducation.org/statistics-faqs/statistics/

Thus, within this context we can begin to understand why a good majority of our Democratic legislators as well as Governor Polis supported Proposition CC. In theory, this Proposition would have at least to some degree enabled our state government to address the issues discussed above, by giving them a bigger budget to play with when it comes to funding those problematic areas. However, Proposition CC did in fact get voted down, sending the Democratic majority government back to “the drawing board” so to speak in their struggle against TABOR. With all of that being said, we as Colorado citizens and CSU students will likely see this legislative battle (surrounding TABOR) continue in the coming years, so make sure you pay attention and vote when the time comes!

Conclusively, I think that it is quite pathetic that a state that has one of best ranked economies in the nation is also ranking among the poorest in the amount of money spent on education and other important service areas. If we have one of the best economies, we should have one of the best education systems and in Colorado that is simply not the case. Thus, I believe that TABOR is one of the main factors contributing to the disparity we see between the quality of our economy and the quality of our governmental services. 

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[i] Staver, Anna. “TABOR FAQ: Colorado's Taxpayer Bill of Rights Explained.” The Denver Post, June 21, 2019. https://www.denverpost.com/2019/06/20/tabor-colorado-taxpayer-bill-of-rights/.

[ii] Armbrister, Molly. “Mayors Call for 'De-Brucing' Colorado at DBJ State of the Cities Forum.” bizjournals.com. Denver Business Journal . Accessed November 28, 2019. https://www.bizjournals.com/denver/blog/real_deals/2016/01/mayors-de-bruce-colorado.html.

[iii] Marmaduke, Jacy. “Colorado's Proposition CC: Breaking down the Most Complicated Thing on the Ballot.” Coloradoan. Fort Collins Coloradoan, October 16, 2019. https://www.coloradoan.com/story/news/2019/10/16/colorado-election-2019-prop-cc-would-end-tax-refunds-tabor/3945927002/.

[iv] Staver, Anna. “TABOR FAQ: Colorado's Taxpayer Bill of Rights Explained.” The Denver Post, June 21, 2019. https://www.denverpost.com/2019/06/20/tabor-colorado-taxpayer-bill-of-rights/.

[v] “These States Have the Best Economies in the U.S.” U.S. News & World Report, 2019. https://www.usnews.com/news/best-states/rankings/economy.

[vi] “Statistics: Colorado Ranks.” Great Education Colorado. Accessed November 29, 2019. https://www.greateducation.org/statistics-faqs/statistics/.

[vii] Marmaduke, Jacy. “Colorado's Proposition CC: Breaking down the Most Complicated Thing on the Ballot.” Coloradoan. Fort Collins Coloradoan, October 16, 2019. https://www.coloradoan.com/story/news/2019/10/16/colorado-election-2019-prop-cc-would-end-tax-refunds-tabor/3945927002/