October 19, 2005

Lessons from Colorado for States Considering TABOR
David Bradley and Karen Lyons


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TABOR has contributed to a significant decline in public services since it was adopted in 1992.

• Under TABOR, Colorado has declined from 35th to 49th in the nation in K-12 spending.

• Higher education funding has dropped by 31 percent.

• Colorado has fallen to near last in providing on-time full vaccinations to the state's children.

• The share of low-income children lacking health insurance has doubled, making Colorado the worst in the nation.

• Colorado business and community leaders now view TABOR as deeply flawed.

A growing body of evidence shows that Colorado’s Taxpayer Bill of Rights, or TABOR, has contributed to a significant decline in that state’s public services.  This decline has serious implications not only for the 4.6 million residents of Colorado, but also for the many millions of residents of other states in which TABOR-like measures are now being promoted.

TABOR, a state constitutional amendment adopted in 1992, limits the growth of state and local revenues to a highly restrictive formula:  inflation plus the annual change in population.  This formula is insufficient to fund the ongoing cost of government.  By creating a permanent revenue shortage, TABOR pits state programs and services against each other for survival each year and virtually rules out any new initiatives to address unmet or emerging needs.

Declining services since TABOR’s enactment have become increasingly evident in most major areas of state spending:  K-12 education, higher education, public health, and Medicaid.

TABOR Has Contributed to Declines in Colorado K-12 Education Funding

  • Under TABOR, Colorado declined from 35th to 49th in the nation in K-12 spending as a percentage of personal income.

  • Colorado’s average per-pupil funding fell by more than $400 relative to the national average.

  • Colorado’s average teacher salary compared to average pay in other occupations declined from 30th to 50th in the nation.

TABOR Has Played a Major Role in the Significant Cuts Made in Higher Education Funding

  • Under TABOR, higher education funding per resident student dropped by 31 percent after adjusting for inflation.

TABOR Has Led to Drops in Funding for Public Health Programs

  • Under TABOR, Colorado declined from 23rd to 48th in the nation in the percentage of pregnant women receiving adequate access to prenatal care, as defined by the Centers for Disease Control and Prevention.

  • Colorado plummeted from 24th to 50th in the nation in the share of children receiving their full vaccinations.  Only by investing additional funds in immunization programs was Colorado able to improve its ranking to 43rd in 2004.

  • At one point, from April 2001 to October 2002, funding got so low that the state suspended its requirement that school children be fully vaccinated against diphtheria, tetanus, and pertussis (whooping cough) because Colorado, unlike other states, could not afford to buy the vaccine.

 TABOR Has Hindered Colorado’s Ability to Address the Lack of Medical Insurance Coverage for Many Children and Adults in the State

  • Under TABOR, the share of low-income children lacking health insurance has doubled in Colorado, even as it has fallen in the nation as a whole.  Colorado now ranks last among the 50 states on this measure.

  • TABOR has also affected healthcare for adults.  Colorado has fallen from 20th to 48th for the percentage of low-income non-elderly adults covered under health insurance.

  • In 2002, Colorado ranked 49th in the nation in both the percentage of low-income non-elderly adults and low-income children covered by Medicaid.

Colorado Business and Community Leaders Now View TABOR as Deeply Flawed

TABOR’s interaction with other areas of the state’s budget has created additional problems.  Spending for corrections, for example, has grown substantially faster than the inflation-plus-population formula of TABOR, in part due to strict criminal codes and sentencing laws.  Because spending for corrections has grown rapidly, other areas of the budget have been squeezed even more in order to keep overall spending under the strict TABOR limit.

TABOR’s costs are becoming clear.  A wide range of Coloradoans — business leaders, higher education officials, children’s advocates, legislators of both parties, and Governor Bill Owens (R), among others — recognize that TABOR has limited the state’s ability to fund critical services.

  • “Coloradoans were told in 1992 . . . that [TABOR] guaranteed them a right to vote on any and all tax increases. . . .  What the public didn’t realize was that it would contain the strictest tax and spending limitation of any state in the country, and long-term would hobble us economically.” — Tom Clark, Executive Vice President, Metro Denver Economic Development Corporation

  • “The [TABOR] formula . . . has an insidious effect where it shrinks government every year, year after year after year after year; it’s never small enough.  …That is not the best way to form public policy.”  — Brad Young, former Colorado state representative (R) and Chair of the Joint Budget Committee

  • “[Business leaders] have figured out that no business would survive if it were run like the TABOR faithful say Colorado should be run -- with withering tax support for college and universities, underfunded public schools and a future of crumbling roads and bridges.” — Neil Westergaard, Editor of the Denver Business Journal

Colorado’s experience provides an important cautionary tale for other states considering TABOR-like measures.

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