Tabor pains. Tabor has sucked Colorado Dry

TABOR Pains

The "Taxpayer Bill of Rights" has sucked Colorado dry. It may soon be undone at the ballot box.

By Bill ChaloupkaWeb Exclusive: 10.13.05

Just at the moment the Republican coalition is showing strain over Katrina recovery and Supreme Court nominee Harriet Miers, a Colorado ballot measure is threatening more harm. Though it's a "purple" state with notable blue and red streaks, Colorado now has a chance to roll back a program long supported by the anti-government movement.

In 1992, amid the populist conservative backlash, Colorado passed a constitutional amendment widely known as the Taxpayer Bill of Rights, or TABOR, a measure which, according to its critics, was designed to starve government. For any level of government -- counties, cities, towns, even school districts -- TABOR stipulated that revenues and spending could only increase in proportion to population and inflation. Any revenues above that had to be refunded back to the taxpayers.

But the population-growth-and-inflation formula stipulated by the law doesn’t take productivity into account, so TABOR had the gradual effect of forcing government spending down, relative to population, inflation, and economic growth. Colorado now ranks 47th in the nation for state tax funds supporting higher education per $1,000 of personal income. That’s the lowest in 40 years, and represents a drop from 34th in 1992.

There’s more. As critics have long noted, TABOR's spending limits pave the way for even nastier crashes whenever a recession shows up. Since recessions drive government revenues down, the TABOR limits are also driven down. But once economic growth resumes, TABOR prevents government spending from returning to its pre-recession levels, even if the revenues are available to fund it. Remember, government revenues and spending can only increase from the previous year’s numbers, not from a higher number a year or two earlier. This came to be called the “ratchet down” effect.

When a serious recession hit telecom- and tech-heavy Colorado early in this decade, that ratchet kicked in. The result: It could take nearly a decade of small and incremental increases for spending to match pre-recession levels, even if the state’s economy booms. To make matters worse, the effects are concentrated, not spread evenly. Transportation and higher education were particularly hard-hit, since other big-ticket items were excluded. Public schools and many local governments were somewhat protected, because they had carved out specific exemptions from the TABOR limits. Meanwhile, other large state outlays -- such as medical costs -- are federally mandated. The Bell Policy Center, a Denver think tank, estimates that state support for higher education will actually decline to zero by 2015, presumably to be replaced by skyrocketing tuition bills and accompanied by a decline in the quality and variety of programs. From 1994 to 2001, the percentage of Colorado’s roads in poor condition rose from 65 percent to 73 percent. Colorado, a big state with lots of roads, now ranks sixth-worst nationally in what it spends to repair its roads.

In 2004, Republicans controlled Colorado’s legislature and the governor’s office. In the spring, they failed to fix TABOR, despite an effort by moderates and Democrats. In November 2004, the hard right paid the price. A well-targeted campaign turned both houses to the Democrats for the first time in decades, capping Colorado’s “purple” year. In several crucial races, the legislature’s inaction on TABOR was a featured issue. Though it was narrowly a red state in the presidential race -- 52 percent of voters went for Bush -- Colorado went blue further down the ballot, electing Ken Salazar to a U.S. Senate seat and his brother, John, to the U.S. House. Republicans previously held both seats.

Within days after the election, Governor Bill Owens, until then a darling of the national conservatives, said he’d work with the newly powerful state Democrats to fix TABOR. Owens and the legislature put two measures on the November 1 ballot. Referendum C, the first of the two, is a TABOR fix, which would effectively stay the spending limits for five years, allowing the Colorado to retain and spend funds TABOR would otherwise have forced to be refunded. Referendum C’s companion, Referendum D, would provide bonding authority to build transportation and education infrastructure -- authority that TABOR does not now allow.
The split in the Republican Party started soon after Owens' change of heart, with the most radical government-cutters angrily denouncing their fellow Republican. An odd struggle ensued, with moderate Republicans, Democrats, and much of the business community supporting the two referenda, citing the importance of state programs to economic development and quality of life. Radical Republicans, squawk radio, and national anti-tax conservatives like Grover Norquist, on the other hand, predictably oppose the referenda for anti-government reasons. More liberal groups, including the Colorado Progressive Coalition, had hoped for a flat-out repeal of TABOR, but have nonetheless joined the campaign for reform, probably because it’s what’s possible at this time.

Just a few weeks in front of the November 1 election, it’s hard to say who’s winning. Both sides are well funded, but the Rocky Mountain News has reported that the pro-Referendum C forces -- backed by the state's wealthy business community -- have a substantial fundraising edge, perhaps by a more than 4-to-1 margin. Their campaign is glossy and centrist. Their opponents got off to a good start with an aggressive summer ad campaign, but have now bogged down in squabbles of their own. Two Republicans running to replace the term-limited Owens as governor a year from now have bickered over the anti-Referendum C campaign, which may work to its supporters' advantage. Still, anti-referendum television ads and telephone push polls are now appearing more frequently, and that could tighten the race.

No statewide polls have been published since summer, and even if polls were available, they probably wouldn’t be very credible; it’s difficult to predict who will vote in an off-year election that features only a smattering of local issues to attract voters. The pro-Referendum C campaign obviously believes its core supporters -- well-educated business Republicans and the entire Democratic base, including teachers and public employees who are reliable voters -- will turn out in numbers sufficient to overwhelm a significant base of populist conservatives.
The stakes in this fight go beyond Colorado. TABOR supporters are trying to pass similar measures in other states, including Wisconsin, Maine, and Maryland. A loss in Colorado would surely damage that project. If radical Republicans fail to punish the moderates, their coalition suffers. In Colorado, with the governor’s office and a competitive U.S. House seat open next year, this purple state could start painting itself a brighter shade of blue.

Bill Chaloupka is Chair and Professor in Political Science at Colorado State University. He previously taught at the University of Montana, Missoula. His most recent book is Everybody Knows: Cynicism in America.