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Study: TABOR Creates a “Toxic Formula”

TABOR — the rigid and flawed formula limiting state and local revenue growth that’s locked into Colorado’s constitution — has had a serious unforeseen impact on property taxpayers, according to a new study from Colorado State University researchers.  The authors closely examine TABOR’s interaction with other state constitutional limits related to school finance and property taxes and find that:

  • Property taxes are higher for most Coloradans than they would have been without TABOR. Taxpayers in about 40 percent of the state’s school districts representing over 80 percent of Coloradans are paying more in property taxes than they otherwise would have due to TABOR. 
  • Who pays property taxes has grown more unequal.  TABOR "served mostly to redistribute — rather than reduce — Coloradans’ tax burden,” the authors note.  For example, several districts, including some wealthy areas, are paying dramatically lower property taxes than they would have without TABOR, and other Coloradans are paying more. 

 As the authors aptly note:

In many ways, Colorado policymakers and voters have created a “perfect storm” of overlapping and conflicting constitutional provisions.  Individual actions, each of which appeared to Colorado citizens to make sense in a vacuum, combine to create a toxic formula for very confused tax policy. . . .  The situation is made more difficult by the fact that Colorado’s [limits] are all constitutional, so addressing them requires voters to understand extremely complex issues and support equally complex solutions in the context of election seasons. . . .

As we’ve noted, Colorado’s TABOR experience serves as a cautionary tale for other states.  A TABOR, which stands for “taxpayer bill of rights,” is really a poison pill that forces deep cuts to education and other services over time, and — as this latest study shows — can also have other unpredictable side effects.