400 Capitol Street, NW
Washington, DC 20001
- Toll Free 1.888.564.6273
- Local 202.783.3870
This op-ed was originally published in Budget & Tax News
on January 1, 2006
Last November, friends and foes of government spending limits had their eyes on Colorado, home to the nation's strongest Taxpayer's Bill of Rights (TABOR), a type of tax and expenditure limit (TEL).
While TELs come in many varieties, TABORs (including Colorado's) typically limit annual increases in government spending to the growth of inflation plus growth in population. Tax revenue in excess of that amount is to be refunded to taxpayers. Lawmakers may raise taxes or keep tax refunds only if voters give their approval.
That's what happened in Colorado on November 1, when 52 percent of voters approved Referendum C, a measure allowing the state to keep the nearly $4 billion in refunds the people were projected to receive over the next five years.
Immediately after the vote, some taxpayer rights advocates lamented the outcome and joined TABOR opponents in saying it would be the end of the swelling nationwide movement to bring government spending under control.
But in two dozen states across the country, efforts to enact tax and spending limits continue.
Colorado state Rep. Joe Stengel (R-Littleton), a strong supporter of TABOR, was so disappointed in the November vote he claimed TABOR was "as good as dead." The Associated Press quoted Douglas Bruce, the taxpayer rights advocate who championed the TABOR measure in 1992, as saying, "The establishment is going to say we had 13 years of experience with spending limits and we changed our minds. I'm sorry for their sake and I'm sorry for our sake."
Taxpayer rights opponents chimed in. Kansas' Gov. Kathleen Sebelius (D) was quoted in the November 3 issue of the Lawrence Journal-World as saying the Colorado vote sent a strong message from people with "real life experience" with TABOR that "it doesn't work. ... I think what people are saying is we would rather spend money on important services than watch them be decimated."
MoveOn.org, the left-wing group financed by billionaire investment manager George Soros, proclaimed "Victory!" on its Web site after passage of Referendum C.
TABOR Supporters Regroup
But opponents of the TEL movement may have started celebrating too early. John Caldara, president of the Colorado-based Independence Institute and a leading proponent of TABOR, said, "We lost a small battle," but "this is a war that's not over."
Jeff Schoepke, tax and corporate policy director for Wisconsin Manufacturers and Commerce, wasn't buying the left's spin either. Wisconsin is one of the states with a strong TABOR movement.
"Big-government advocates have been spinning the results of recent referenda in Colorado as the death of the Taxpayer's Bill of Rights (TABOR). ... Don't believe the spin," Schoepke said.
"TABOR has had the real positive economic impacts predicted by supporters," Schoepke pointed out. "Eight years before Colorado voters enacted the Taxpayer's Bill of Rights, the state ranked 43rd nationally in median family income growth, but now it ranks seventh. Before TABOR, Colorado ranked 33rd nationally in job growth. It now ranks sixth. Before TABOR, Colorado ranked 43rd nationally in economic growth per capita, and since then it ranks seventh."
Pennsylvania Moves Forward
Such facts may have led the Pennsylvania House and Senate to move forward with their TABOR plans. The day after Coloradans voted to forgo their TABOR tax rebates, the Pennsylvania House voted to give the state's voters a statutory Taxpayer's Bill of Rights. The Pennsylvania Senate later passed the same bill, which awaits the governor's signature.
The Pennsylvania Senate also passed a bill that would enshrine TABOR in the state constitution. House members were expected to vote on that measure in mid-December. To go into effect, the Constitutional amendment bill must pass both houses of the legislature in two consecutive years. If it passes the House this year and again in both houses of the legislature early enough in 2006, it will be placed on the November 2006 ballot as a referendum.
Owens Reiterates TABOR Support
Colorado's Republican governor, Bill Owens, who supported Referendum C while maintaining he still supports TABOR, said in a November 16 guest commentary for the Commonwealth Foundation for Public Policy Alternatives he was pleased to see the progress TABOR is making in Pennsylvania.
"As Pennsylvania policymakers consider limiting the growth of government spending, some Pennsylvanians may be under the impression that the government spending cap in Colorado--our Taxpayer Bill of Rights--is dead. To paraphrase Mark Twain, the reports of its demise are greatly exaggerated," Owens wrote.
Owens added, "In our November 1 election, Colorado voters fixed a glitch in the spending cap law; they didn't overturn it, as some reports might have you believe. ... I believe that a majority of Coloradans support the law, and when the election dust settles, other states will see how well spending caps can work and more will adopt them."
Oklahoma Support Strong
Voters in Oklahoma indicate strong support for spending caps. The Oklahoma Council of Public Affairs reported a statewide telephone survey of 500 registered voters was conducted in late November by Cole Hargrave Snodgrass & Associates. Voters were asked whether they supported "an amendment to our state constitution that would restrict the rate of growth in government spending to no more than the rate of inflation plus the rate of population growth." The poll found 74 percent in favor, with just 17 percent opposed and 9 percent undecided.
With Oklahomans apparently unfazed by the anti-TABOR spin of the Colorado vote, state Sen. Randy Brogdon (R-Owasso) saw no reason to cancel his plans to collect the signatures necessary to bring TABOR to the people for a vote.
"The Taxpayer's Bill of Rights is a true friend of taxpayers, a fuel for the economy, and it's the enemy of the bureaucrats and the big spenders," said Brogdon, who drives home his message by making appearances with a replica of an 800-pound pig and using a Web site, http://www.stoptheporkok.com, to promote fiscal responsibility.
Maine Has Momentum
Momentum for TABOR also continues in Maine, which joins Oklahoma, Pennsylvania, and more than 20 other states where advocates are pursuing enactment of a TABOR. Bill Becker, executive director of the Maine Heritage Policy Center, was unfazed by Colorado's vote. Becker is helping lead the charge for the statutory Taxpayer's Bill of Rights that will likely be on the ballot in Maine in November 2006.
"The Colorado vote is proof that TABOR works," Becker said. "TABOR allows the people paying the bills, not politicians, to have the final say in exceeding tax and spending limits."
Maine citizens shoulder the highest combined state and local tax burden in the nation, with an average rate of 13 percent of income, according to the Tax Foundation. Colorado has one of the nation's lightest tax burdens, ranking 44th in the nation at a rate of 9.2 percent of income.
The Small Business Survival Index 2005, published by the Small Business & Entrepreneurship Council, shows Colorado as having one of the nation's best business environments--and Maine nearly the worst. Colorado ranks 10th and Maine 49th. Only California and the District of Columbia have worse business environments, according to the Survival Index.
Becker and other supporters of the Maine TABOR believe Colorado's TABOR is a big reason for Colorado's far superior rankings, and they further believe Maine will likewise benefit if it enacts a TABOR.
Cameron Sholty, the Wisconsin FreedomWorks state director who also worked in Colorado to organize opposition to Referendum C, is fighting for a TABOR for his fellow Wisconsinites.
"Good policy is good politics, and TABOR is good policy," Sholty said. "But meaningful reform takes a long time. The fact that the movement to limit out-of-control spending in the states has grown from Douglas Bruce passing TABOR in Colorado [in 1992], to over 20 states looking at it today, says a lot. It says the people want more control over their tax dollars, and they are going to keep fighting until they get it."
Max Pappas (firstname.lastname@example.org) is director of policy at FreedomWorks, a grassroots organization with more than 700,000 members nationwide.