Colorado’s Taxpayer Bill of Rights: Thoughtful Spending Limitations Can Protect Taxpayers
Jonathan Williams, the Vice President of the ALEC Center for State Fiscal Reform, recently spoke at a Cato Institute Capitol Hill briefing titled, “Proven Strategies to Restrain Spending: An International Perspective.” Jonathan joined Daniel Freihofer, Head of Economic and Financial Affairs at the Swiss Embassy, and Clement Leung, Hong Kong Commissioner to the United States, to discuss how thoughtful spending limitations can protect taxpayers.
Jonathan highlighted the example of Colorado’s Taxpayer Bill of Rights (TABOR), which he referred to as “the gold standard” of fiscal responsibility. TABOR establishes a limit on how much revenue Colorado can collect from taxes in a given year. The limit is determined by the past year’s revenue collection, as well as a formula that accounts for population growth plus inflation. If tax revenue collected exceeds this limit, then the excess tax revenue is refunded back to taxpayers. If lawmakers want to use the excess revenue for additional government spending instead of issuing a tax refund, then lawmakers must obtain voter approval.
Colorado’s TABOR serves as a great taxpayer protection model for lawmakers to consider. Next year, taxpayers could receive a TABOR refund that is estimated to be between $70 to $220 million. Thoughtful spending limitations such as TABOR provide taxpayers with a voice on how their government spends their hard-earned tax dollars.