Colorado must fix TABOR law on revenue/spending

The state budgets of both Illinois and Colorado - my two homes in the past 15 years - are rather screwed up, albeit in very different ways and for very different reasons. Basically, revenue doesn't match spending obligations and basic government responsibilities, and the laws and legislators of both states are so hamstrung as to be an almost Gordian knot of ideological absurdity. In Colorado, the issue has come to a head, as state transportation and education budgets are strained to the limit even as the state's economy is roaring and population is booming. Residents of the Rocky Mountain state can blame this inconsistency on a 25-year-old constitutional amendment known as TABOR, or the Taxpayer's Bill of Rights. It was a law pushed through by a small group of anti-government zealots and sold to somewhat naive voters who simply wanted the right to vote on any tax increases. That "right" in itself is understandable. It's the correlary garbage of the law (that most voters never read or understood) that has caused such problems in a state that should be in much better shape. Now, as the law turns a quarter century, and the current crop of "yeoman legislators" seek to fill potholes and classrooms, the state is reflecting on the mess. This weekend the Denver Post pulled together some great pieces of commentary and analysis as food for thought, and tomorrow they will host a public forum on the issue. The most concise and accurate analysis of the problems comes from writer Tim Hoover who is asking legislators and voters to "Break antiquated tax policy of TABOR." Here's the problem in a nutshell:

Worse, though, TABOR has imposed a formula on state government that guarantees it will never be able to keep up with rising costs. TABOR says state revenue may only grow by the rate of inflation plus population every year. So if inflation is 2 percent and population grows by 2 percent, revenue can grow 4 percent. Any revenue collected above that limit must be rebated to taxpayers. This sounds like something based on economic policy. It isn’t. TABOR uses the Consumer Price Index as the guide to inflation, meaning that it measures increases in prices for clothing, food, plane tickets, toasters and so on. These are all consumer goods, not goods purchased by government. The state buys road construction, school teachers, college classrooms, public safety and other goods and services consumers don’t. The way government buys things is really not much different from how businesses buy things. Someone who owns a construction company might look at the price of lumber, bricks and construction workers. They wouldn’t try to gauge their costs based on the prices of shoes, cottage cheese and basketballs. Just as government does, businesses look at costs in their sector of the economy.

In effect, the people of Colorado could fix this problem quite easily. Re-write TABOR so that voters still have to approve any tax increases .... and scrap every other part of the law and its nonsense formulas. The tax approval is the one thing CO voters agree on, and many concede that they voted for it based on only that idea. In fact, many I've talked to admit they thought that was the only thing the law did. That limited knowledge is, in effect, the problem with democracy. But that's OK - the beauty of our republic is that our government and our laws can always be changed. It's just a question of whether people have the will to do so.