TABOR's legacy: Tax cuts, more local government

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TABOR's legacy: Tax cuts, more local government

Dodging TABOR


The Legislature, voters and courts have blunted the full impact of TABOR.


Certificates of Participation: TABOR prohibits going into debt without a popular vote, but courts have ruled that COPs, which function a lot like bonds, pass legal muster. The Legislature has used COPs to build a prison and a future Supreme Court building and history museum.


College Opportunity Fund: In 2004, the Legislature created these "scholarships" for college students, instead of sending money directly to colleges. By funneling the money through students, colleges no longer are counted against state TABOR limits, because they get less than 10 percent of their budget directly from tax money.


Referendum C: Voters in 2005 approved a five-year reprieve for the state from TABOR’s revenue limit. Because of the recession, state revenues peaked in 2007-08, and TABOR limits won’t apply again until the budget returns to its 2007 level, adjusted for inflation and population.


Tax break repeals: A 2009 state Supreme Court opinion seemed to grant the authority to end tax breaks without a vote of the people. Gov. Bill Ritter wants the Legislature to suspend a dozen more tax breaks.


 

TABOR's legacy


The Taxpayer’s Bill of Rights has changed the state over its 17 years.




  • Low taxes: With rebates growing every year, the Legislature in 1999 and 2000 cut taxes. The income tax rate dropped from 5 percent to 4.63 percent, and sales taxes dropped a tenth of a percent, to 2.9 percent.Colorado’s state taxes now are among the country’s lowest. Although TABOR lets the Legislature cut taxes, it cannot raise them without a vote of the people. If the state restored its 2000 tax rates, it would have $440 million more this year, according to the left-leaning Bell Policy Institute.


  • More fees: Taxes can’t be increased without a vote under TABOR, but "fees" — like last year’s car registration fee — can.Fees, however, have to go to a specific purpose, and not every government agency can charge them. For example, the state couldn’t charge children a welfare fee, said Carol Hedges of the Colorado Fiscal Policy Institute, which opposes TABOR.


  • More special governments: TABOR has proved that people are more comfortable with local government, said Barry Poulson, a University of Colorado economics professor and a TABOR proponent. It allows voters to exempt a government from revenue limits, something that has happened only twice at the state level. But cities succeed in about half of their attempts to overcome TABOR, and special districts succeed most of the time.Colorado has seen an explosion of special district governments, which developers use to provide water, trash and other services for their subdivisions. The number of metropolitan districts more than tripled this decade, to 1,062 last year.

"Had TABOR not been there, we could afford programs that were in the best interest of the state, not necessarily
Fort Lewis College."

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