In 1992, Colorado voters approved the TABOR Amendment to Colorado’s state constitution. TABOR is a loose acronym for “Taxpayers’ Bill of Rights.”
TABOR, explains Colorado’s legislative council staff, “allows the state to retain and spend an amount based on the prior fiscal year’s actual revenue or limit, whichever was lower, grown by Colorado inflation and population growth and adjusted for any ‘voter-approved revenue changes.’”
In short, TABOR is a way to limit the growth of government. Under the amendment, revenue in excess of the TABOR limit must be returned to taxpayers, though it appears the legislature has some discretion in how it distributes those funds.
But Colorado’s legislature, chafing at TABOR’s limits, has been trying to undercut the amendment. It recently succeeded and, in doing so, redistributed revenues from the most productive people to the least productive.
Last November, Colorado voters soundly defeated, by about a 60 percent to 40 percent vote, Proposition HH, which would have allowed the state government to increase spending and use some of what would have been tax refunds to reduce property taxes.
But that didn’t stop the legislature. In a special session after the November election, it voted to use some of the $3.3 billion excess in revenues on reducing property taxes slightly and expanding Colorado’s earned income tax credit. It also changed how refunds are allocated. Under TABOR, refunds were approximately proportional to the amount each person paid in taxes. If you paid more in taxes, you got a bigger refund. But the legislature voted to change that so that each tax filer gets the same refund.
That’s a big difference. A high-income Colorado taxpayer making $235,001 would have gotten $1,143 back. A Colorado taxpayer making $51,000 or less would have received $586. But now each will get $800. Democratic governor Jared Polis signed the bill equalizing refunds in November, shortly after the legislature passed the bill.
In 1866, Gideon John Tucker, a lawyer and politician in New York state, famously stated, “No man’s life, liberty, or property are safe when the legislature is in session.” Colorado’s legislature is a case in point.
David R. Henderson, is a Research Fellow at the Hoover Institution at Stanford University. First published here.
Related items:
Canadians Need a ‘Taxpayer Bill of Rights’ | Frontier Centre For Public Policy (fcpp.org)
A Decade of TABOR | Frontier Centre For Public Policy (fcpp.org)
