Colorado Offers the Gold Standard for Fiscal Restraint: Jonathan Williams and Nick Stark in National Review
Jonathan Williams, ALEC’s Executive Vice President and Chief Economist, and Nick Stark, ALEC’s Director of Tax and Fiscal Policy, wrote in The National Review about the 30th anniversary of Colorado’s Taxpayer’s Bill of Rights (TABOR). They highlight that Colorado’s TABOR is the gold standard for state spending control, the successes and the critiques that have arisen in the last 30 years.
Today marks the 30th anniversary of Colorado’s Taxpayer’s Bill of Rights (TABOR), one of the best-known state tax and expenditure limits (TELs) in America. While it has returned billions of dollars to, and provided important protection for, hardworking Colorado taxpayers over the past three decades, TABOR continues to be subject to unrelenting political attacks from its tax-and-spend opponents, as well as appalling judicial activism from Colorado courts.
TABOR is a state constitutional amendment that limits the amount of revenue Colorado lawmakers can retain and spend to a reasonable formula of population plus inflation growth. If the state government collects more tax revenue than TABOR allows, the money is returned to taxpayers as a refund. Just this year, Colorado taxpayers will receive nearly $4 billion in TABOR refund checks.
If any government in Colorado intends to spend surplus revenue, increase taxes or fees, or increase debt, it must submit the proposed measure to the ballot and win the approval of a majority of voters. Ballot measures must clarify how the funds will be raised and allocated. This institutionalized transparency explains in large part TABOR’s success. Taxes can still be increased, but it takes a vote of the people to do so.