Shared from the 5/3/2020 The Denver Post eEdition

TABOR: GOOD MEDICINE OR BAD?

Constraints will help Colorado governments weather downturn

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Shelby Meyer passes by The Irish Rover, one of many restaurants and bars now shuttered along South Broadway in Denver on April 14. The coronavirus has caused many businesses to shut their doors during the coronavirus pandemic. Helen H. Richardson, The Denver Post

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Peg Brady is a retired software analyst and designer. She has served on the TABOR Foundation Board of Directors for more than a decade.

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The Denver Broncos and Food Bank of the Rockies hosted a mobile pantry at Empower Field at Mile High on April 27 to help people in need during the pandemic. RJ Sangosti, The Denver Post

The Taxpayer’s Bill of Rights (TABOR) has provided welcome stability to Coloradans as we all deal with the coronavirus pandemic. This provision of our state constitution allows all governments throughout Colorado an automatic but reasonable annual budget increase. The limits keep governments from growing too fast.

Therefore, when the economy gets into trouble, Colorado state and local governments have a more firm base for their spending and do not need to cut as drastically as other states. Government programs are more sound, strong and sustainable than if they had grown as fast as ambitious politicians often wanted. TABOR helps us to confront the current crisis.

Moreover, just when families and businesses are struggling, the Taxpayer’s Bill of Rights has led to timely tax relief. The state tax system has evolved so that, when times are good, itover-collects tax revenue. Last year, Colorado over-collected $428 million. TABOR mandates that the state rebates to you excess revenue collected during a fiscal year. So, the 2019 tax rate has been reduced from the usual 4.63% to 4.5% — a 0.13% drop.

You won’t receive a tax refund check; instead, the legislature reduced the income tax rate. Because the rebate is being accomplished through the lower tax rate, you may not recognize how much money you saved. Still, because the state will not incur the cost of issuing and mailing checks, we save that expense as well.

In addition, the state will reimburse local governments $153 million from TABOR-generated surplus to reduce property taxes for seniors and disabled veterans.

TABOR does not impede reasonable government services, only excessive growth beyond that tied to population growth and inflation. Colorado families and businesses retain more of the fruits of their labor for their own discretionary use. Furthermore, TABOR frees capital to generate more jobs.

TABOR helps to constrain excessive government spending by returning to Colorado taxpayers any funds above the limit, unless voters allow the government to retain the surplus. For example, voters wisely retained the spending limitation by defeating Proposition CC last fall. TABOR prevented the state from keeping the surplus, which is now available to families.

Colorado voters, not politicians, have the final say on new taxes to fund programs. History shows that when government presents asolid cost-benefit analysis to voters, if we recognize the objective’s validity and the work-plan’s rationality, we consistently approve it. Citizens are respected when officials must explain a tax proposal.

TABOR encourages wise, cost-effective budget choices and efficient performance. Among TABOR’s results in normal times have been economic growth, increased employment, and improved government services. TABOR requires that governments budget the same way we do for our families or businesses. It’s not onerous; it’s reality.

Colorado and our nation may be headed for a recession due to the pandemic. TABOR will not worsen the downturn; TABOR only regulates how fast a government budget may grow and is not applicable if government revenue declines. TABOR will keep governments from raising taxes without prior voter approval, but even the most ardent pro-government economists say it’s foolish to raise taxes during adownturn. In case the situation heads out of control, TABOR anticipates the possibility of emergency taxes and allows for the legislature to tax for increased spending on the emergency needs.

We benefit directly and indirectly from TABOR’s protections. TABOR limits government tax revenue — money taken directly from you. Equally important, TABOR constrains excessive government growth —intrusive, prosperity-thwarting, freedom-quashing regulations. TABOR shelters our wallets, promotes jobs, and safeguards our freedom.

Governments derive their powers “from the consent of the governed,” wrote Thomas Jefferson in our Declaration of Independence. Our wonderful American experiment created a system of self-governance that keeps us citizens in charge of our governments. TABOR was established to do just that, and it is succeeding.

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