State Constitutional Amendment To Oppose New State Taxes, Increased Spending, and Debt Without Voter Approval

Policy Status

  • Type: Model Policy
  • Status: Final
  • Date Introduced: July 17, 2025
  • Date Finalized: August 11, 2025

Issues

  • State Budgets
  • Tax Reform

    • Task Forces

  • Tax and Fiscal Policy
  • Federalism, Homeland Security and International Relations

    • Tags

  • 2025 Annual Meeting

    • Summary

    The total state and local government debt in the U.S. was estimated to be over $5 trillion in 2022. The 7th edition of the ALEC Unaccountable and Unaffordable reported that unfunded public pension liabilities across the 50 states total up to nearly $7 trillion nationwide. The Colorado constitution’s Taxpayer’s Bill of Rights (TABOR), approved in 1992, is, according to ALEC: “…the gold-standard of “Tax and Expenditure Limitations,” a type of policy that imposes limits on the amount of money government can tax and spend. TABOR limits the growth of state revenue to a rate of population growth plus inflation. For example, in 2023 the population growth in Colorado to 0.7% and inflation was 3.5%, leading to a total allowable growth rate of 4.2%. That growth rate is applied to the previous year’s limit to calculate the new limit. Any money collected over the limit must be returned to taxpayers. This mechanism ensures that the growth of government does not exceed the growth of the economy.” https://alec.org/article/thank-you-tabor-colorado-owes-1-7-billion-to-taxpayers: Oct.16, 2024)) Billions of dollars have been returned to Colorado taxpayers over the years since TABOR began. Given the alarming collective state and local debt levels – and the consequential current and future tax burden imposed on taxpayers in each state, the citizenry of each state, respectively, need a long-term assurance that spending, and taxes can and will be controlled. This can only be assured with a state constitutional amendment – a fiscal responsibility box – which sets specific standards and measurable criteria to govern spending and taxes – and which must be approved by the citizens of the state.
    Draft

    State Constitutional Amendment To Oppose New State Taxes, Increased Spending, and Debt Without Voter Approval

    WHEREAS, States through their respective constitutional amendment processes should adopt fiscal responsibility amendments that

    (I) impose limits on the amount of money government can tax and spend,

    (II) tie the growth of state revenue to a rate of population growth plus inflation, and

    (III) require any increases above an established formula in spending and taxes are to be approved by a vote of the citizens.

    WHEREAS, neither the State nor its political subdivisions should increase, in excess of a 4-year moving average of inflation up to [2.5%] and the change in population

    (i) total annual spending, including obligations of the treasury faster than the people’s increase in after tax income,

    (ii) any new or increased tax, or

    (iii) debt of the general treasury without voter approval.

    BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF {insert state}:

    Section 1. The following amendment to the Constitution of the State of {insert state} is proposed and agreed to by this, the {insert name of state legislature}, and is referred to the next Legislature for reconsideration and agreement.

    Section 2. ARTICLE XX, SECTION XX OF THE CONSTITUTION OF THE STATE OF {INSERT STATE} IS AMENDED TO READ AS FOLLOWS:

    Sec. __________ State and Local Government Spending and Growth Limits

    1. State Fiscal Year Spending Growth Limits: “The state’s total fiscal year maximum annual percentage change in [STATE]’s fiscal year total spending are determined by the 4-year moving average rate of inflation up to [2.5%].:” (Source: U.S. Bureau of Labor Statistics Consumer Price Index) and the annual percentage change in state population during the prior calendar year.” (Source: U.S. Census Bureau Official Annual Population Estimates).
    2. Local District Fiscal Year Spending Growth Limit: “Each local taxing district’s maximum annual percentage change in fiscal year total spending limit shall be changed annually by the 4-year moving average rate of inflation up to [2.5%] inflation plus the percentage change in the political subdivision’s population during the prior calendar year.” (Source: U.S. Census Bureau Official Annual Population Estimates).
    3. Excess Revenues: “Excess revenues over the annual revenue limit up to [TBD]% shall be deposited in an interest-bearing Rainy-Day Fund and only used to pay for expenses up to the Spending Limit. Excess revenues above the Rainy-Day Fund Cap shall be refunded or, upon voter approval, used to repay debt.
    4. No New Spending, Taxes, or Increases in General Government Debt Without Voter Approval: “Neither [STATE] nor its political subdivisions shall increase in excess of a 4-year moving average of inflation up to [2.5%] and the percentage change in population ((i) total annual spending, including obligations of the treasury faster than the people’s increase in after tax income, (ii) any new or increased tax, or (iii) debt of the general treasury without approval of the voters or those in relevant in-state region or district.”
    5. Whistleblower Right to Jury Trial: “Any citizen of [STATE] is entitled to a jury trial within 12 months. If the jury finds [STATE]’s executive, judicial or legislative branches or its political subdivisions have violated the provisions of this Amendment, the Whistleblower shall be entitled to reasonable attorneys’ fees, court costs and an award not to exceed twenty times attorney’s fees and court costs.”