Last week, Colorado voters acted to head off a looming budget crisis that the Denver Post called "bizarre and completely unnecessary" by amending the state's 1992 Taxpayer's Bill of Rights (TABOR). The state budget office anticipated a $365 million budget shortfall in 2006 alone because the "ratchet" effect of TABOR has caused the growth of allowable government spending to lag far behind economic and population growth. The impending financial crisis, and cuts to state services, that followed were especially galvanizing considering that Colorado would have been forced to refund nearly $450 million in collected revenue next year if the amendment was not passed.
TABOR, in its original form, prescribes a highly restrictive, complex, and gimmicky formula for calculating government spending levels, automatically rebating funds above an arbitrary cap to taxpayers and tying next years spending to this year's levels, even when circumstances change dramatically. TABOR makes long-term planning and investments and "rainy day" contingencies all but impossible.
Speaker of the House Andrew Romanoff worked with Democrats like Denver Mayor Bill Hickenlooper and many Republicans like Gov. Bill Owens to create Referendum C. The law now allows the state to keep and spend all the revenue it collects under current rates for fives years -- money the state needs to keep funding education and other programs.
The list of 1,100 private and public groups from across the ideological spectrum who supported Referendum C shows how much services had already been impacted by the reduced spending ceiling caused by the 2001-2002 recession. In 2001, Colorado was second in the nation in job growth; by 2003 it had fallen to 49th. Since 2000, Colorado has added 300,000 new residents and lost 150,000 jobs. The groups that rallied behind Referendum C recognized that business that create jobs will be attracted to a region with a healthy economy and quality public services.
"Referendum C's advocates argued that the best way to bring good jobs to Colorado was to deliver a skilled and healthy workforce, a low tax rate, and a high quality of life," Romanoff wrote. "The opponents never offered a better formula for economic success -- probably because there isn't one."
Romanoff has said the Legislature will now focus on restoring funding to programs most deeply cut and will only create new programs that can be shown to save money.
"I think if folks are expecting anything other than a very frugal and disciplined approach, then both our friends and our enemies will be disappointed," Romanoff said.
Ultimately, appropriate budget controls are about finding the balance between laws that guarantee sensible restraint and accountability to voters and flexibility that allows lawmakers to set priorities to best provide for public safety, health, education, and infrastructure using the scarce resources they've been provided. In Washington, D.C., the GOP-controlled Congress has completely abandoned fiscal discipline, overspending at every turn with neither statutory controls nor self-restraint. With the leadership of advocates like Speaker Romanoff, Colorado voters have acted to strike the right balance.
