Colorado is the only state in the country that has intentionally handcuffed itself on fiscal policy, which it did in 1992 when voters passed the so-called “Taxpayers Bill of Rights” (better known as TABOR). Two former Republican lawmakers in Colorado are now warning Arizona not to make the same mistake.
Former Republican legislators Don Marostica and Bradley Young — both of whom are also veterans of the Colorado legislature’s Joint Budget Committee — recently co-signed an Op-Ed in The Arizona Capitol Times pleading with Arizona lawmakers to not make the same mistake as Colorado:
As Arizona legislators consider SCR1035, which would impose tax and spending limitations similar to those in Colorado, it’s worth looking at the consequences and taking from the lived experience of hardworking Coloradans who have a rigid state budget dreamed up by politicians over 30 years ago.
In short: This proposal would impose automatic tax cuts that would hurt Arizona’s ability to provide essential services and rise to the challenges of an uncertain future. Tax cuts today put the state at tremendous risk of major cuts to vital services like schools, medical care, parks, first responders, and infrastructure that communities depend on to thrive.
States are at their best when they are focused on the things that create a safe, healthy, prosperous life for everyone. Leaders who endorse permanent budget restrictions like those in Colorado, and now SCR 1035 in Arizona, are short-sighted. They fail to consider how these laws would hamstring their ability to meet big challenges for families and communities – like guaranteeing a good education to all our kids, building safe infrastructure like roads and clean water, and providing health care to people when they need it. Arizona should learn from Colorado and say no to SCR1035 to protect the future of the state. [Pols emphasis]
The ballot measure that became TABOR was sold to Coloradans as a check on the free-spending ways of state lawmakers and promised that voters would be able to vote on any proposed tax increases in the future. But some of the less-celebrated aspects of TABOR have created massive problems for Colorado ever since. The so-called “ratchet down effect” (thankfully removed by the voters in 2005 via Referendum C) was perhaps the biggest culprit because it forced Colorado to limit the amount of revenue it could collect and spend based on a formula that started with numbers from previous years.
Part of this problem still exists via the Revenue Cap. When revenue drops in a particular year — because of a recession, for example — TABOR requires that future revenue collection and spending be reduced in accordance with those numbers; this makes it damn near impossible for the State of Colorado to EVER catch back up to prior year spending levels even while the state continues to grow in population. (The Gallagher Amendment also deserves some blame here, but that’s a different story).
[mantra-pullquote align=”right” textalign=”left” width=”50%”]“[TABOR] doesn’t really create local control. If anything, it mandates your choices, and takes control away. It’s just not a good system.”
— Former Republican State Sen. Steve Johnson[/mantra-pullquote]
As Marostica and Young explain further for the Capitol Times:
Colorado’s experience shows how these automatic cuts lock in recession-level spending and reward the wealthiest taxpayers at the expense of most taxpayers. After 30 years of our limit, Colorado has a backlog of unmet needs for safe roads, affordable housing, and for our growing population, and has some of the most underfunded schools in the country. Colorado also has developed a complex and warped system of fees and special taxing districts that are necessary to provide basic infrastructure services or development within our limits. These consequences are not by choice or policy of Coloradans today, but because people 30 years ago set an automatic limit in place that’s been tough to unwind…[Pols emphasis]
…More concerning, the tax cuts will make it harder, if not nearly impossible, to provide the things Arizona’s families need in good economic times and bad ones. The legislature will be self-sabotaging its own ability to make decisions on how to cover a shortfall if actual revenue comes below forecasted revenue. Other states with arbitrary revenue limits end up needlessly cutting funding for education, medical care, and public safety when these services are needed most. And when the economy improves, the state will be unable to ramp-up to meet the increasing demands of a growing Arizona and will stay stuck at recession-level spending, meaning falling ever behind and failing Arizonians.
Colorado has been down this road since 1992, taking a huge toll on the state’s ability to fund schools. Despite being one of the country’s wealthiest, fastest growing states, Colorado ranks 48th in higher education funding and dead last in starting-teacher-salary competitiveness. If Arizona follows in Colorado’s footsteps, Arizona residents can expect similar outcomes. [Pols emphasis]
This is not the first time that a Colorado Republican has tried to convince another state to avoid making the same mistake Colorado made in 1992. In 2009, former Republican State Senator Steve Johnson was making similar arguments against a TABOR-like proposal in Maine.
Despite the best efforts of many individuals in Colorado, TABOR has proved harder to get rid of than bed bugs or Congressman Doug Lamborn. The best we can do for now — and even Republicans are doing it — is to warn other states never to follow down the same path.
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While TABOR has been problematic, either the General Assembly or the voters are going to have to figure out how to restrain property tax increases. The rise in property values is going to hit people hard at property tax time and, if no restraint is in place, voters are going to get angry and be susceptible to inevitable Republican braying and attack ads on the issue.
Democrats need to get ahead of this. Soon. Very soon. Or an initiative or a bad 2024 election will come.