Guest Columns

HILLMAN: THERE THEY GO AGAIN

Dems need to review TABOR for Dummies

There they go again. Faced with a budget that’s hemorrhaging dollars, it was only a matter of time before one of our spendthrift legislators made headlines by erroneously pointing the finger of blame at Colorado’s Taxpayers Bill of Rights (TABOR).

Never mind that last spring Gov. Bill Ritter and the Democrat-controlled Legislature ignored numerous warning signals of a looming recession.

Never mind that they ignored the consensus lesson of the last “budget crisis”: When times are good, save a little money for when times aren’t so good.

Never mind that in November voters rejected higher taxes and defended the few remaining constraints on government spending.

Nope. To hear the Denver Democrats tell the story, the problem with the state budget isn’t the economy or undisciplined spending. A few degrees further from reality, newly elected Boulder Democrat Sen. Rollie Heath says the problem is TABOR.

Apparently, Heath didn’t hear about Referendum C, which loosened Colorado’s government from most of TABOR’s constraints — except for that pesky requirement that voters still get to decide whether to raise taxes.

“We’re hamstrung,” Heath complained to a legislative committee even before taking office. “Not only does (TABOR) put a limitation (on spending), it takes away your flexibility. We desperately need flexibility right now.”

So perhaps it’s time a for a quick session of “TABOR for Dummies” to benefit anyone else who has been elected to state government after spending the past four years in a galaxy far, far away.

• Lesson 1 — TABOR doesn’t limit spending during a recession.

To quote James Carville, “It’s the economy, stupid!” During a recession, the limiting factor on state spending is the economy. After all, Colorado — unlike Congress — has a balanced budget amendment, so the state can’t spend money it doesn’t have.

• Lesson 2 — Ref C doesn’t expire in 2010.

When the voters passed Ref C in 2005, they changed the way the original TABOR worked. Even after portions of Ref C expire in 2010, the new, revised spending limit under TABOR 2.0 will no longer “ratchet down” spending during a recession and will rarely restrict spending during an economic recovery.

According to the Legislature’s economists, TABOR will not limit government’s ability to spend in the foreseeable future.

• Lesson 3 — Amendment 23 doesn’t expire in 2010.

The constitutional amendment that actually makes matters worse during a recession is Amendment 23, which mandates that K-12 education spending must increase every year — even when revenues are decreasing.

In the current budget, Amendment 23 requires a spending increase of $189 million. Meanwhile, economists predict that total general fund spending must be reduced to $172 million less than last year.

K-12 education accounts for 41 percent of the general fund budget, so the remaining 59 percent of the budget must be cut by $172 million to compensate for falling revenue plus another $189 million to accommodate
Amendment 23.

Will Heath and his fellow
Democrats buck the teachers unions to pull the teeth of the real shark in the budget process? Don’t hold your
breath.

• Lesson 4 — Flexibility under TABOR 2.0.

Ever since Ref C suspended the TABOR spending limit, legislators have enjoyed absolute flexibility to spend, to save or to strike a balance between the two.

Guess which option they chose? Not saving. Not balancing. Just more spending.

The flexibility they haven’t enjoyed is the flexibility to raise taxes without a vote — although they even tried
that with Ritter’s property tax
increase.

Herein lies the lesson for voters:

For four years, legislators have budgeted without TABOR’s training wheels. They could have saved money during good years, but they didn’t. They should have asked our permission before raising property taxes, but they didn’t.

What possible justification exists for relaxing the remaining safeguards that protect taxpayers?

Mark Hillman served as Senate Majority Leader and Colorado Treasurer. To read more or comment, go to www.MarkHillman.com.