Colorado's Taxing Debate

Voters hate taxes. Duh. But what if the tax is for a specific, popular purpose? Or, what if the tax targets a specific, unpopular industry? ...
by | October 22, 2008

Voters hate taxes. Duh. But what if the tax is for a specific, popular purpose? Or, what if the tax targets a specific, unpopular industry? If you're curious about the limits of anti-tax sentiment, the place to look this year is Colorado.

I've added three Colorado measures to Governing's ballot measure guide. Here's what I've added.

Issue: Amendment 51, which would raise sales taxes to pay for services for people with developmental disabilities.

Analysis: Most likely, Coloradoans wouldn't support a sales tax increase to go straight into the general fund -- especially with the economy struggling -- but committing the money to people with developmental disabilities could change the dynamics. Supporters argue that the long waiting lists for services demonstrate the need for additional funding. Critics of the amendment don't disagree, but say the money can be found elsewhere in the budget.

Issue: Amendment 58, which would increase severance taxes on the oil and gas industry (by removing tax credits) and use the money for a variety of purposes, including college scholarships.

Analysis: Gov. Bill Ritter, a Democrat, is the amendment's biggest supporter. Ritter thinks that the state could be getting a better deal for its natural resources. His case is that higher taxes won't discourage extraction of oil and gas because it will still be highly profitable. The industry itself disagrees, of course, and is spending millions ($19 million by one estimate) to fight the proposal. If you're wondering about the salience of populist critiques of big oil, this is the measure to watch.

Issue: Amendment 59, which would modify Colorado's Taxpayer's Bill of Rights and education funding requirements.

Analysis: To understand why this vote it a big deal in Colorado, you have to know the history. I covered it in a recent article for Governing:

In 1992, voters there approved a Taxpayer's Bill of Rights (TABOR), the strongest such law in the nation, which limited year-over-year state revenue increases to a formula based on population growth plus inflation. In 2000, Colorado voters approved another initiative, which mandated that per-pupil education spending increase at the rate of inflation or faster, regardless of the state budget situation. Together, those initiatives create rigid requirements and conflicting priorities that drive state budgeters crazy. "We're one of the only states," says Andrew Romanoff, the speaker of the Colorado House, "where the constitution requires simultaneous revenue reductions and spending increases."

What Amendment 59 would do is remove both the limits on revenue increases in TABOR and the requirement to always increase education funding (it would also create savings accounts for education). Romanoff is its biggest supporter. The battle over Amendment 59 is a reprise of a fight three years ago, which temporarily lifted some of TABOR's requirements. While the issue it still hot --with most Democrats supporting Amendment 59 and most Republicans adamantly opposing it -- it's not getting quite the attention it did in 2005, in part because of the presidential election and U.S. Senate election in Colorado. It's hard to say whether a lower profile helps or hurts the measure.

Josh Goodman
Josh Goodman  |  Former Staff Writer

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