Taxpayer Bill of Rights

Taxpayer Bill of Rights

The Taxpayer Bill of Rights (abbreviated TABOR) is a concept advocated by certain conservative and libertarian groups, primarily in the United States, as a way of limiting the growth of government by requiring increases in overall tax revenue be tied to inflation and population increases.

The Colorado example

The most famous and prominent example of TABOR legislation is in the state of Colorado. [cite book
authorlink=Daniel Smith (professor)
title=Tax Crusaders and the Politics of Direct Democracy
work=NY: Routledge
] In 1992, the voters of the state amended Article X of the Colorado Constitution to the effect that any tax increase resulting in the increase of governmental revenues at a rate faster than the combined rate of population increase and inflation as measured by either the cost of living index at the state level, or growth in property values at the local level, would be subjected to a popular vote in a referendum, a process referred to as "de-Brucing" after Douglas Bruce, the author of the amendment. This applies to any cities and counties in Colorado as well as the state itself. Additionally, any "natural growth" in revenues that exceeded this rate was to be either earmarked for educational improvements or rebated to the taxpayers once an adequate reserve ("rainy day") fund was established. This has led to a decrease in actual tax revenue (relative to population and inflation) for two reasons. Because the law does not adjust for rising productivity, additional income from year to year among the same population can not be effectively taxed. Secondly, the law only looks at the previous year, leading to a "ratchet-effect", wherein if tax revenue temporarily lowers in a recession, revenue can not rise back to pre-recession levels without a referendum. In Colorado, these factors have led to a decreasing overall tax revenue in the state.

Referendums to allow revenue increases have generally failed in Colorado, and there are many reasons to account for this trend in addition to voter preference. Referendums have generally been held in "off years" from other elections; experience indicates that holding referendums on dates away from other elections makes changes easier to defeat, as turnouts are lower, and opponents of a measure are often better-organized while the supporters of such measures tend to be less energized and are more likely to vote on specific issues if they are on the ballot at the same time as candidates for office. Additionally, these measures are very technical and deal with dense tax law matters, which may be somewhat impenetrable to the average voter.

In 2000, an amendment known as "Amendment 23" was passed. This required education spending to increase at a certain rate regardless of revenue, and lead to a greater portion of revenue devoted to education. TABOR and Amendment 23 together required that other cuts in spending be made to offset education increases, and many of these cuts were unpopular. Many Coloradans began calling for "TABOR reform".

In November 2004, both houses of Colorado's legislature became controlled by Democrats, and Democrats were elected to the U.S. Senate and U.S. House, replacing Republicans. Many saw this as a reaction against TABOR, and days after the election, Republican governor Bill Owens announced a plan to reform TABOR. In November 2005, Coloradans approved a ballot measure that loosened many of TABOR's restrictions. One of these changes allows the state to spend an amount equal to the highest amount of the last five years, not necessarily the last one year.

Advocates of TABOR

Advocates of the concept see the experience of Colorado as an example of the positive effects of tax decreases. They cite the fact that Colorado's economic growth in the dozen or so years since this system was implemented has been well in excess of that of the U.S. as a whole. They also say that deciding tax increases in referendums is more democratic, as legislators may be beholden to special interests and lobbyists. Counter-arguments to this by opponents are seen as elitist, and supporters claim that the voters are the best judges of how to spend what is, in the final analysis, their own money.

The biggest advocate of TABOR is Americans for Prosperity. Many of their 20 state chapters are currently working on plans to implement TABOR in their respective states. In Florida, AFP is currently lobbying the Taxation and Budget Reform Committee to place a TABOR on the November '08 ballot. And in Texas, AFP has spearheaded the Taxpayer Protection Act concept of giving taxpayers greater control over how much government taxpayers want and are willing to pay for. It is on the '08 Republican Primary Ballot as a nonbinding initiative.

Many advocates of a more libertarian bent, such as Americans for Limited Government, claim that reduced taxation is a noble goal for its own sake, leading to increases in financial freedom and economic prosperity. Others note that Colorado has continued growth as well as larger tax revenues concurrent with the TABOR act.

Advocates claim that the assertion that Colorado ranks 47th in school funding is transparently misleading. The figure, which comes from the U.S. Census Bureau’s report titled Public School Finances 2004, measures spending as a percentage of personal income. Colorado appears to be low in these rankings because of the high earning power of its taxpaying residents. Using the same set of figures, a poorer state like New Mexico ranks 7th, though it actually spends fewer dollars per pupil than Colorado. []

Measuring all K-12 education expenditures (including construction costs and debt repayment) for 2003-2004, data from the National Center for Education Statistics (NCES) place Colorado at 28th in the nation ($9,073). Strictly measuring operational costs for the same year, Colorado ranks anywhere from 23rd ($8,263 - National Education Association) to 33rd ($7,478 - NCES) in "current" per-pupil spending. []

The proportion of state spending on K-12 education is at an all-time high. In 1992, the year before TABOR took effect, the state of Colorado paid 45 percent of the per-pupil funding for public schools. Today, 14 years later, the state’s share has grown to 62 percent. From 2000-01 to 2005-06, Colorado’s overall per-pupil contribution in state dollars to K-12 education (including all education funds, not just per-pupil funding under the School Finance Act) has increased by 28 percent—or by 16 percent, after adjusting for inflation. []

The conclusions regarding Higher Education spending are equally misleading, as they are drawn from the same fallacious comparisons of personal income.

Opponents of TABOR

Opponents argue that the lack of tax revenue has hurt Colorado in many ways. For instance, Colorado ranks 47th in the nation for higher education funding (per personal income level), which is the lowest in 40 years, representing a drop from 34th in 1992. In another example, Colorado now ranks 44th in what it spends to repair its roads. Opponents claim that it is because of this that the percentage of Colorado’s roads in "poor" condition stands at 73 percent, declining dramatically since TABOR was enacted.

Opponents also argue that Colorado's economic growth has largely been despite - not because of - this system, and is a result of changing societal desires for open spaces, outdoor sports opportunities, and other "quality of life" issues that are now imperiled by Colorado's inability to provide expanding governmental services. They point out that almost 90% of state tax revenues are now already earmarked for various purposes, handicapping the state legislature and giving it very little flexibility.

They also add that the process has not been as "democratic" as its advocates purport, citing the off-year voting and complex wording that may skew results. Some supporters claim that complicated tax decisions are best decided by deliberation based on well-informed argument and informed consent, such as presumably occurs in legislatures, rather than the simplistic and emotionally-charged appeals that tend to dominate referendums.

TABOR in other regions

Reforms similar to Colorado's have been put forward in several states. In 2006, two Libertarian groups financially backed by New York real estate developer Howie Rich campaigned for laws similar to TABOR in eight states. [cite news
author=Sadler, Russell
title=Out-of-state lucre fuels Oregon Measure 48
work=The Daily Astorian
date=October 6, 2006
] [cite news
title=Prop. 207 is Trojan horse
work=The Arizona Republic
date=October 8, 2006
] [cite news
author=Cover, Susan M.
title=TABOR: A problem, or the solution?
work=Kennebec Journal
date=October 8, 2006

Informed observers feel that such advocates have the greatest likelihood of success in jurisdictions which have initiative and referendum and can be put on the ballot directly by voters, at least in the short term, as legislators are very unlikely to be willing to give up such control over the power of the purse unless voters overwhelmingly demand it.Fact|date=February 2007 TABOR advocates were handed a setback when a similar proposition, on the ballot on the same day as the California gubernatorial recall of 2003, was overwhelmingly defeated on the same day that a Democratic governor was being recalled by a large margin.

It appears far more likely, at least in the short term, that measures similar to the "Taxpayer Bill of Rights" will be adopted on the county and municipal level than on a statewide basis beyond Colorado; one municipality adopting the plan in recent years has been Spring Hill, Tennessee. After the November 2005 setback for proponents in Colorado, advocates in many regions are now downplaying the name "Taxpayer Bill of Rights" in favor of other terms such as "Spending Limitation Movement". A TABOR referendum on the ballot in Maine as an initiative effort led by Mary Adams was defeated in November 2006.

ee also

* Taxpayer Bill of Rights III, an Act of Congress


External links

* [] , contains a thorough but negative [ analysis of TABOR] and its effects on Colorado
* [ Reforming TABOR in Colorado] , via a report in support of TABOR from the Cato Institute
* [ TaBOR Pains] , via a report in opposition to TABOR from the "American Prospect"
* [ Beware: TABOR Is Coming] a report on TaBOR from "Dollars & Sense"
* [ Citizens United] is an anti-TABOR group founded by the Maine Municipal Association, Maine Education Association, and other special interest groups focusing on the November 2006 TABOR referendum in Maine
* [] is a pro-TABOR website focusing on the November 2006 TABOR referendum in Maine
* [ Maine Heritage Policy Center] is a non-profit think tank which advocates for the passage of TABOR in Maine.
* Article opposing TaBOR by Kristi Hargrove, a small business owner and PTA leader who lives in Crested Butte, Colo. [ School children aren't pigs at the trough]
* Article Rebutting Kristi Hargrove [ TABOR Benefits Colorado’s Citizens: A response to misleading video] Independence Institute.
* [ TABOR alternative] by Maine State Senator Peter Mills
* [ Referendum C: Rewarding the Colorado Assembly for Behaving Irresponsibly] by Linda Gorman, Health Care Policy Center Director, Independence Institute.
* [ TAX AND SPENDING LIMITS: THEORY, ANALYSIS, AND POLICY] by Dr Barry Poulson, Senior Fellow, Independence Institute.
* [ Citizens to Politicians: We Like TABOR] Opinion Article, by Dr Barry Poulson, Senior Fellow, Independence Institute.
* [ Empowering Florida's Taxpayers] James Madison Institute
* [ The Sam Adams Alliance] is a national organization that supports TABOR initiatives.
* [ Savings Account For Education or SAFE] is a ballot initiative led by Colorado Speaker of the House Andrew Romanoff to reform the TABOR system.
* [ Reforming TABOR: Bold Leadership for our future] an editorial written in support of reforming Colorado's TABOR.

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