Here’s some rather lengthy political observations combined with a good dose of history. :)

First, the history.

In 1992, voters voted in an amendment to the state constitution for Colorado. It wasn’t really a tax cut, but it mimics the effects of one. It was a state budget cap. It said that the budgets of the governments within the state could not increase faster than 6% per year. Any taxes collected above this prior year*1.06 had to be returned to the people of Colorado. This was returned on a basis of estimated state sales tax and state income taxes paid by that person. It ended up more or less going based on your income if you did not itemize your taxes. For a few years there I was getting $162-300 per year while paying no state income taxes. It was the Taxpayer Bill of Rights (TaBoR)

This caused consternation and many attempts by lawmakers to strike down this law. One recent one I can recall is the city I live in floating a referendum permitting them to take money from the railroads and use it for a new underpass being built. What they didn’t tell the tax payers at the time is that they could have simply let the railroad pay the contractors directly instead of throwing it into the city budget and thus circumventing the government growth cap. This had been done before between railroads and other cities in colorado.

This bill has already come in handy at least once. When the big recession happened around the country and many states were struggling, Colorado’s budget was barely dented and federal funds were able to supplement it and keep it at that same 6% growth throughout the recession. Other states whose governments had grown unchecked were dependant on the bubble tax revenue crack hit serious withdrawal once the bubble burst. Colorado just sacrificed the tax refunds to their people and had to supplement their general funds with funds from other sources.

The Democrat party has taken over the state legislature as of the last election cycle however. Not content to just chip away at Tabor like various governments have been for 13 years. They’re now trying to eliminate it lock, stock, and barrel with Ref C. Now that the economy has swung back up and tax revenues are skyrocketing again, the state Democrats are looking at the discrepancy between the TABOR limited government size and projected state tax revenue and are thinking “Mmm. Think of what we could do with all that cash. Think of all the social programs we could create out of thin air so we get to keep our majority in the legislature!” Of course, they’re spinning it so that the state has this imminent financial crisis and that money must be retained to pay for wholesome, required things like schools and roads.

I just heard on the radio today that all of the schools in my immediate area have just gotten a large upgrade and refit after being neglected for years even during the bubble era. It’s not because of lack of money during the time Tabor was around. They had the money. It was because they kept putting off needed maintenance in favor of other things. The same for the roads, the money was there. I’m seeing a flood of roadwork in the general area however. There seems to be no problem finding money for road projects that are happening on every side of my job making it almost impossible to get to work.

As someone who has studied the various measures used to circumvent Tabor I’m appalled by the lack of honesty in the pro-C camp. One tactic suggested for increasing the funding for state colleges without abolishing Tabor was to make all of the state colleges basically private universities. You eliminate the direct funding of the colleges moving it to charge all students the standard out-of-state tuition, while simultaneously giving all in-state students tuition vouchers that offset the increase in tuition. This moves the schools outside the realm of Tabor and allows for non-tabor funds to be used for the schools. It’s really just a good free market idea. The latest radio ad I heard glosses over this with a simple statement of “The ivory tower bunch opposing referendum C wants to increase Tuition in a time when tuition is already too high.” without mentioning the fact that it would be giving the colleges more money without taking any more money out of the pockets of the students this way. The word lawyer-ing by the pro-C group is equally appalling. It’s not a tax increase to the word lawyers. Never mind that it is eliminating a de-facto tax cut which has the effect of increasing the taxes that everyone in colorado pays. Their radio ad goes on to a sob story about how Colorado is still in pain from the lack of funds. I’m not noticing any pain here. This is the best I’ve ever had it, really.

(The Anti-C group has some unsupported facts I’d really like to see proved on their radio ads too. 3,200 tax increase for a family of 4. Half-million dollar bar tabs, and $1000 office chairs. I’d really like to see their sources for these numbers. $800 per person is a bit high for what I remember the tax refund being. Unless they’re talking about over the course of 3-4 years.)

They’re saying that C is designed to get rid of the budget cuts from the recession. Here’s my two solutions for the entire problem with recessions and the “ratchet down” effect of Tabor. 1. Implement a time limited high-water mark in Tabor. Say that for a certain number of years after you can return to the same level as a prior year to eliminate the down-ratcheted budget amount. This would get rid of their complaint that their budget base resets when they spend less in a year. It would also reduce my complaint that it provides them an incentive to spend ALL of their allowed budget or they’ll have less to work with the next year. 2. Save money in the good times that can be used to keep the budget up in the bad times. This would also be circumventing the Tabor a little, but take maybe 10% or 12% of the money to be refunded and drop it into some sort of interest bearing account. Keep it there and keep slowly growing it until a recession. When a recession hits, use only as much of this money as you need to to keep the budget flat (perhaps adjusted for inflation.)