Backers want TABOR 'time-out' to fix state budget

By Cherry Sokoloski
North Forty News

State Sen. Steve Johnson, a Fort Collins Republican, has been stumping hard for Referenda C and D, talking to at least one organization every day in September. When he explains the two ballot measures, people almost always see them as necessary, Johnson said.

More than 800 organizations in Colorado have come out in favor of C and D. All three Larimer County commissioners and the Fort Collins City Council are among those endorsing the measures. In addition, the business community "has jumped on board with eagerness, because they see that Colorado's economy is so dependent on higher education and an efficient transportation system," said State Sen. Bob Bacon, a Fort Collins Democrat.

The referenda, placed on this November's ballot by the state legislature, are geared to getting Colorado out of a deep fiscal hole, according to Johnson and Bacon.

According to proponents, C and D propose a temporary "time-out" from TABOR to give the state a chance to recover from the recession. The referenda amount to the same thing as temporary "de-Brucing," the two senators said; that is, they allow the state to keep revenues that would otherwise be rebated to taxpayers under TABOR, the Taxpayers' Bill of Rights authored by Douglas Bruce.

More than 900 city and county governments and school districts in Colorado have already permanently de-Bruced, the two senators pointed out. In the state's case, the change would be in effect for five years.

"It's not a permanent change," Bacon emphasized, and it does not dismantle TABOR.

The problem, Johnson and Bacon agreed, was the recent recession. During the recession, Colorado lost about $1 billion in revenue - a 17 percent nosedive - in just one year. Now, even though the economy has recovered somewhat, the state is not allowed to keep additional revenue because TABOR's revenue limit declined during the recession. The result is called the "ratchet glitch."

The dilemma has been likened to Horsetooth Reservoir during a drought. Under TABOR-esque rules, if the reservoir were drawn down, it would not be allowed to refill, even if the area were to get good snow and rain.

Most of the growth in state revenue, Johnson noted, has come from new residents in the state and from growth in business. "If we can't collect additional money from these new people, we won't be able to pay for new demands they put on the state," he said.

In Colorado, the big loser with TABOR restrictions has been higher education, including both the university system and - even more so - the community colleges. Bacon explained that many of the state's expenditures, such as those for K-12 education and Medicaid, are mandated and can't be cut. Higher education is one of the few areas not protected, so the big cuts must come there.

If C and D do not pass, Bacon said, the state will have no dollars at all for higher education in five years. That means that some community colleges and universities will close, and the rest will essentially become private schools because tuition will be so high. State college aid would disappear, Bacon said, and access to any sort of post-secondary education would be denied to many.

The effects of cuts in higher education go far beyond students. "The Larimer County economy is greatly dependent on Colorado State University," Bacon said, noting that the university supports many spin-off jobs in this area. Also, he said, businesses will pull out of the state if higher education continues to decline.

Others who are already affected by the tight state budget, and who will suffer more if C and D fail, include disabled people, seniors on Medicaid in nursing homes, and people needing treatment for drug and alcohol addictions or mental health issues, according to supporters. Children's programs such as preschools, immunization clinics, prenatal care and assistance for the developmentally disabled would also be on the chopping block.

If C and D fail, the state will not be able to reinstate the homestead exemption, a tax break for seniors. And, there will be no money for building new roads and bridges or for repairing existing ones. With many programs, Bacon pointed out, the state is losing twice, because Colorado doesn't have the matching funds it needs to get federal funds.

Both Johnson and Bacon said there are several misconceptions regarding Referenda C and D. The measures would not change the state income tax rate. It would stay at 4.63 percent and, after five years of de-Brucing, would drop to 4.5 percent if there is still a surplus in revenues. Also, people would still get their tax refunds if they overpay on state taxes.

Some opponents say that C and D would cause major growth in state government, but Johnson disagreed. "We're a very lean state government," Johnson said. In fact, according to the Colorado Legislative Council, the state has the lowest state tax burden in the country.

If C and D fail, Colorado will need to cut another $400 million next year. "Colorado will be a very different state from what it is now," Johnson said.

Some opponents say the state legislature is "crying wolf" about the budget crisis in Colorado. Johnson's answer is, "At the end of the story, the wolf did come - and I think it will be next year."