TABOR: Holding Colorado Back, 25 Years Later

Twenty-five years ago today, Colorado voters approved the Taxpayer Bill of Rights (TABOR), a constitutional amendment limiting annual state and local spending and revenue growth to a rigid, arbitrary formula and mandating voter approval of all tax increases, among other restrictions. TABOR proceeded to undermine Colorado’s ability to pay for the building blocks of thriving communities and a strong economy, such as public schools and universities, health care, roads and bridges, and other infrastructure needs. That’s partly why no other state has passed a similar TABOR, though many have considered it.

TABOR is a formula for decline because it:

• Forces cuts to core state services on which families and businesses rely. Colorado’s core public investments in K-12 schools, higher education, and health care fell sharply after it adopted TABOR. Voters eventually suspended it for five years and eliminated a particularly pernicious provision that ratcheted down TABOR’s spending and revenue limits during economic downturns. However, the state couldn’t recover the ground it lost before the Great Recession, and state lawmakers have been forced for years to make impossible choices among education, health care, and other important priorities.

   

  Under TABOR, for example, Colorado fell near the bottom among states in support for education, and it’s stayed there. In 2015 it ranked 48^th in K-12 school spending — and 46^th in higher education support — when measured as a share of personal income. The state also faces an annual shortfall of about $1 billion in transportation funding, which supports highway and bridge construction and maintenance, among other things. Colorado voters have approved close to 500 municipal ballot measures to relax TABOR’s harmful restrictions and raise badly needed funds.

• Leads to significant increases in fees, which hit economically struggling communities hardest. Though billed as reform, TABOR doesn’t make government more efficient or lower the cost of providing services. Instead, it has forced lawmakers into inefficient, unpopular work-arounds to raise the revenue necessary to meet residents’ needs. In particular, lawmakers have found that the easiest path to circumventing TABOR is to raise fees, which doesn’t require voter approval. Colorado is the third most-dependent state on service charges. Because these charges generally aren’t based on a person’s income or ability to pay, rising fees force struggling Coloradans to bear more of the load for government services that everyone depends on.
• Keeps Colorado from positioning itself for sustained economic growth. Colorado’s population is growing because people want to take advantage of all that the state offers. But TABOR’s rigid limits and voter requirement for raising taxes prevent Colorado from fully capitalizing on that growth. States with strong economies and growing populations should take advantage of the economic and revenue growth that’s fueled by an influx of additional taxpayers to repair roads and bridges, build high-quality transit, and upgrade housing stock. They should improve their K-12 schools and colleges and universities, help build a top-notch workforce with proven job training and workforce strategies, and create the right conditions for cultivating tomorrow’s entrepreneurs. These kinds of public investments can benefit families and businesses for decades to come.

Twenty-five years later, TABOR remains a bad idea. It provides an illusion of fiscal responsibility while constraining lawmakers’ choices and their ability to respond to needs. Other states should reject this and similar budget gimmicks and instead prioritize investments in schools, health care, and infrastructure to promote broad-based prosperity.