Nothing has been scarier than working under the TABOR Amendment to meet the needs for human services, funding state highway improvements and subsidizing higher education. Passed back in 1992, TABOR has restricted state revenue and hence, expenditures to meet the state’s growing demands. Add Amendment 23, which mandates increased spending in K-12 education, and the Gallagher Amendment, which limits property tax receipts for municipalities, and that equals a state headed to a financial meltdown, according to state officials.
Sure, Referendum C temporarily eased the pain from TABOR by setting up a five-year timeout so the state can retain more tax revenues, but that will expire in 2010 — which is around the corner in political time. Any further changes or extensions to TABOR will have to go back to a vote of the people.
Speaker of the House Andrew Romanoff noted the problems in the state constitution concerning TABOR and the other amendments at the Valley Symposium in Glenwood Springs recently.
“I think the constitution is a bad place to make budget policy,” Romanoff said. “It doesn’t reflect changing priorities; it doesn’t reflect changing economic circumstances and sometimes it contains conflicts that are hard to reconcile without shortchanging other services.”
Romanoff added that a Constitutional Convention may have to be called to resolve these conflicts and fix TABOR restraints.
“It might be the right thing to do if we’ve exhausted all other options,” he said.
At a meeting with business leaders in Grand Junction last month, Governor Bill Ritter made the same assessment: There are too many restrictions on state government because of changes in the state constitution like TABOR.
“I’m not sure the voters have an appetite to change TABOR,” Ritter said, but he noted the findings of the Colorado Futures Panel report that says, “Unless the structural problems in Colorado’s government are addressed, dealing with urgent fiscal problems will be nearly impossible.”
Increasing the severance tax rate on energy production has been suggested as a temporary fix for funneling more money into the state. That proposal, like any tax increase under the TABOR law, would have to go before the voters’ approval in a general election year like 2008 or 2010.
“I don’t think severance tax should be used to backfill the state’s general fund,” said Aron Diaz, executive director of Associated Governments of Northwest Colorado, a region greatly impacted by oil and gas drilling.
“The No. 1 priority of severance-tax revenues is to take care of communities that are dealing with energy development and we’re behind on that mission,” Diaz said.
He disagreed with the notion that voters wouldn’t support a change in the state constitution to amend the TABOR restrictions.
“We already have 45 out of 64 counties that have de-Bruced in some fashion and municipal de-Brucing questions are passing with an 87 percent success rate,” Diaz said.
“Instead of looking at severance-tax increases as a quick fix, let’s focus on TABOR,” Diaz said.