(The Center Square) – Colorado leads the nation as the only state that has a revenue cap on how much money the state can bring in.
That cap is a part of the state’s Taxpayer Bill of Rights, commonly known as TABOR. Voters passed it in 1992 as an amendment to the Colorado Constitution, but some Democrats are now pushing for its end.
Yet, a recent report from the Common Sense Institute of Colorado found TABOR has saved the state billions of dollars in spending, while also driving economic growth.
Ross Kaminsky is a fellow at the institute and an author of the report, which is titled “The Legislative Assault on TABOR: How Colorado lawmakers are rewriting the rules.” In an exclusive interview with The Center Square, Kaminsky explained TABOR and the report’s findings.
“TABOR is a part of the state constitution and has a couple of key requirements,” Kaminsky explained.
Those requirements are:
• The state may only retain an amount of revenue equal to the previous year’s revenue, with adjustments for population growth and inflation. Above that, the state is required to refund any additional money brought in back to the taxpayers.
• Any increase in taxation goes to a vote of the people.
Over the past few years, there has been a growing assault on TABOR, as legislators work to find ways to get around its requirements.
Those attacks have been driven by Democrats, Kaminsky said.
“Democrats certainly have a theory of government, which is that government knows best, and more government spending is better,” he said. “So they object to anything that limits the amount of money that they can take from taxpayers.”
Proponents of getting rid of TABOR argue it leads them to cut spending on necessary programs. Or, as a recent failed joint resolution that would have required the General Assembly to sue TABOR to determine its constitutionality stated, TABOR’s spending limits “deprived [Colorado] of a republican form of government.”
“That’s because they start with a base assumption that spending on programs should always go up as much as they want it to,” Kaminsky said.
State Rep. Yara Zokaie, D-Larimer, who was elected in 2024, has been one of the Democrats speaking out against TABOR.
“Working to build a Colorado that truly works for everyone … and that means funding for schools and services! #TABORhaters,” Zokaie posted on social media in April.
U.S. Sen. Michael Bennet, D-Colorado and the leading candidate in the gubernatorial race, recently said in an interview that there is “a general view” that TABOR isn’t “serving” Colorado well.
Backlash against TABOR has received little public support, though. In fact, in 2023, voters resoundingly voted against Proposition HH, which would have put TABOR refunds at risk of elimination by using excess TABOR funds to backfill lost revenue. That proposition received just 39% approval, showing that the vast majority of Coloradans do still support Colorado’s TABOR system.
Kaminsky, who stressed that he is a political independent, doubled down on that point.
“I think that Democrats will not give up until that [TABOR] is gone,” he said. “However, even in a fairly blue state like Colorado, there does seem to be a good amount of voter support, even among many Democrats who like the fact that there is some restraint on the growth of government.”
The Common Sense Institute’s report found there have been many economic benefits for Colorado, which it argued have been driven by TABOR.
“We believe that part of the significant economic growth that Colorado has had for the last at least 10, maybe 20 years has been due to the fact that the government is not supposed to be able to grow just as fast as politicians might want to,” Kaminsky said. “TABOR keeps Colorado from becoming a fiscal basket case.”
Among that growth, the report found that up to 26,000 new jobs were fueled by TABOR tax refunds and $9.2 billion in state savings since 2021.
In recent years though, dozens of bills have been passed leading to the “gradual dismantling” of TABOR. Kaminsky said one of the ways that some lawmakers are doing that is by increasing fees instead of taxes.
“One of the things that Democrats have been doing to get around TABOR is they have been creating what they call fees rather than taxes,” Kaminsky explained. “That is part of the reason that our effective state income tax rate, if you include fees, is somewhere between seven and a half and 8%.”
Without those fees added in, the tax rate would be closer to 4%.
Since TABOR was passed, fee-based revenue has increased by over 3,000%, a 2024 report found. “In 2023, fees alone raised $23.3 billion in Colorado.”
Kaminsky pointed to this increase in fees as part of the reason Colorado’s economic growth is plateauing in recent years.
“Within the report, there’s a long list of the bills that Democrats have passed and the governor has signed that have reduced TABOR refunds one after another,” he said. “They find ways to spend money on things, getting around the intent of TABOR, which is why Colorado is now not as fiscally admirable as it has been in the past.”
Republicans, while in the minority in the legislature, have set their sights on addressing the state’s many fees, which they say are costing taxpayers upward of $5,000 a year each. They also pushed back against the effort to sue TABOR.
“TABOR is a popular safeguard here in Colorado — it ensures that your hard-earned tax dollars are treated with respect,” said state Rep. Ty Winter. “TABOR keeps the legislature in check by requiring voter approval for tax increases. It’s your money, and you deserve a say in how it’s spent!”
Instead of attacking TABOR, which it called the “law of the land,” the report argued it should be protected.
“By continuing to dismantle TABOR, state policymakers may be favoring the health of the state budget over Colorado’s best economic interests,” it said. “Instead, they could consider implementing safeguards against both runaway spending and the intentional misuse of excess TABOR revenue.”