Posted on 03/28/2005 7:39:17 PM PST by RWR8189
Gov. Bill Owens of Colorado is used to praise from conservatives. National Review dubbed him "the best governor in America" on its cover (illustrating a profile by John J. Miller). Conservatives lauded him for, among other things, his record of cutting taxes and spending. In recent weeks, however, Owens has announced a budget deal with Democrats that has some conservatives furious. Grover Norquist, the head of Americans for Tax Reform, accuses Owens of "betraying" taxpayers. The editors of the Wall Street Journal have zapped him. Owens's critics say that he is not only raising taxes, but weakening his state's constitutional limits on taxes.
Colorado voters added a "taxpayer's bill of rights" (TABOR) to their constitution in 1992. Owens has been a vocal supporter of it. TABOR stipulates that revenues can grow no faster than prices and population rise. If prices rise by 2 percent and population grows by 2 percent in a year, then revenues can grow by 4 percent. (And thanks to another amendment, revenues can't rise more than 6 percent even if inflation and population growth would warrant it.) Any revenue above that level has to be refunded to the public. The government cannot keep any more money unless the public votes for it. Nor can it raise taxes unless the public votes for it.
TABOR kept Colorado government from growing much during the boom years of the late 1990s. Other states expanded Medicaid to provide many services that the federal government didn't mandate. Not Colorado. TABOR is a government-shrinking device. If revenues and spending can grow only with prices and population, then as the state economy grows the state government should, over time, make up a smaller and smaller proportion of it.
Conservatives think of Colorado's TABOR as something of a model for other states. But they generally agree that other states should modify its provisions. One modification is to get rid of what's sometimes called the "recession ratchet."
Colorado's recent fiscal history illustrates this "ratchet." The recession and a drought caused revenues to drop substantially — by 13 percent one year and then by 4 percent. The state, under Governor Owens, cut the budget accordingly. Note, incidentally, that these cuts were not caused by TABOR's limits on revenue growth. There was no revenue growth to limit. TABOR wasn't a constraint on revenue growth in the first year of recovery, either: Revenues were up only 3 percent, but inflation plus population growth were 4.5 percent.
But TABOR is going to start to constrain the budget next year. Revenues are expected to grow by around 6 percent, but inflation plus population growth are only 1.2 percent. The extra revenue will have to be refunded. Which brings us to the ratchet. Let's say that population growth and inflation between 2001 and 2011 will average 3.2 percent a year. You might think that under TABOR, revenues would grow by an average 3.2 percent a year, too. But you'd be wrong. When a recession hits, revenue growth drops below that trendline — and when it ends, TABOR won't let revenues go back up to it.
That creates a political bind for Gov. Owens. Revenues can rise by only 1.2 percent. But mandatory Medicaid expenses are going to rise by a lot more than 1.2 percent. Thanks to another amendment the voters of Colorado made to their constitution in 2000, K-12 education spending has to rise faster than that too. That means everything but Medicaid and education will have to be cut — and not just "cut" in the Washington sense. These will have to be real cuts, and they will come after substantial cuts have already been made. Colorado's budget is nothing like California's or New York's. It is one of the lowest-taxed states in the nation.
Governor Owens argues that a TABOR that results in these additional cuts will not be sustainable. That's why the American Legislative Exchange Council, the conservative state legislators' group, is promoting a version of TABOR that avoids the recession ratchet.
This being an odd-numbered year, Owens can't propose a constitutional amendment that changes TABOR or, for that matter, changes the education amendment. What he is instead doing is using TABOR's provision to allow the government to keep extra revenues if the public votes for it. The refunds will shrink — by $3.1 billion over 5 years. (Colorado has a $14 billion budget.)
In the debates over federal tax policy over the last few years, conservatives have argued — rightly, in my view — that to shrink a scheduled tax cut is to raise taxes. By that standard, what Owens is proposing is clearly a tax increase. He has cut taxes substantially before, however, so even with this proposal he is a net tax-cutter. And it's also worth noting that if his proposal is adopted and the government sticks to it, revenue growth will be up an average 2.9 percent a year from 2001-2011. Government, that is, will not be keeping up with inflation and population. Owens's plan foresees a tighter constraint on the growth of the budget than the rule that ALEC — and the National Tax Limitation Committee — want other states to adopt.
What about the charge that Owens is "weakening" TABOR by using its provisions? It's always possible that politicians will get into the habit of proposing to keep the tax refunds. But the public will have to vote on those proposals, and it's hard to believe that voters are going to get into the habit of approving tax increases.
If I were a voter in Colorado, I would probably vote against Owens's proposal. A public repudiation of tax increases would, presumably, answer Owens's worry about the sustainability of TABOR. And I can certainly understand that national anti-tax groups can't afford to cut Owens any slack. But Owens is certainly not in the same league as other tax-raising Republican governors — he's no Bob Taft or Bob Riley. He has tried to find the best way forward in a difficult situation, and even those of us who disagree with his choice ought to be able to sympathize with him.
These will have to be real cuts, and they will come after substantial cuts have already been made.
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The problem? And the fact that medicare spending is forced to rise by the Federal government is the fault of the Federal Government.
The Education spending is a serious matter as the voters are somewhat contradicting themsevles.
All and all a fairly well written piece. Interesting to think about and it would be interesting to get others opinions on this. I greatly respect Gov Owens. Especially after the Club For Growth (somewhat) endorsed him for Pres last year. I believe they are now behind Mike Pense.
Governor Owens appears to be taking a page out of President Bush 41's playbook by selling out to the Democrats. My understanding is that we will be voting on any measure that increases taxes in the fall of this year. This probably will go down in flames even with the Governor's support. Jon Caldara of 850 KOA radio here in Colorado will be leading the charge against this referendum I'm sure.
That would surprise me, I don't think Mike Pense is running for prez (though I do think he is a future speaker of the house or majority leader.
I expect the CFG to wind up endorsing either Mark Sanford or Tim Pawlenty in time.
He should have kept a closer eye on spending. There's a good 30% of slop in the budget. Now's the time to cut more. His claims of spending "needs" are bogus.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Your understanding is deadwrong. You need to get your facts straight. No one is proposing a tax increase and that includes GovOwens. The proposal on the table will actually cut tax rates and allow ths state to keep any refunds to taxpayers, in order to support critical infratstructure requirements. TABOR remains alive and well and Colorado is still one of the most fiscally responsible states in the nation. That is part of the problem.
TABOR was voted into law by Coloradan's just when the state began to experience massive migration of people from other states. Low tax rates, tax refunds and extremely lean budgets led to Colorado neglecting many aspects of its basic infrastructure requirements.
A big part of the problem that faces Colorado has been changes to the state Constitution brought about by Amendment 23 becoming law, which makes funding for K thru 12 schools a mandatory aspect. This is in direct conflict with TABOR. Coloradan's are beginning to understand that tough choices must be made.
Btw, while libertarian Jon Caldera opposes the compromise that GovOwens made with Democrats, conservative Mike Rosen of KOA is supporting it.
I see you still don't know what your talking about.
TABOR was voted into law by Coloradan's just when the state began to experience massive migration of people from other states. Low tax rates, tax refunds and extremely lean budgets led to Colorado neglecting many aspects of its basic infrastructure requirements.
A big part of the problem that faces Colorado has been changes to the state Constitution brought about by Amendment 23 becoming law, which makes funding for K thru 12 schools a mandatory aspect. This is in direct conflict with TABOR. Coloradan's are beginning to understand that tough choices must be made.
Btw, while libertarian Jon Caldera opposes the compromise that GovOwens made with Democrats, conservative Mike Rosen of KOA is supporting it.
I'll have to listen to Mike Rosen's take on this issue. Up until now I've only heard Jon Caldara talk about this in any detail on the air. If Jon's against it I probably will be as well, even after more in depth review on my own, but we'll see.
Jon Caldara is a strict Libertarian. Compromise isn't in his vocabulary. Mike Rosen has expressed support for the compromise on several occasions over the last few weeks. Most Coloradans who are paying attention, know that the state budget is hamstrung and Owens is in a very difficult position. Colorado politicians need to step up and make a tough choice, or else suffer the consequences. The people just voted the GOP out of power and gave the Dems total legislative control for the first time in 45 years. With Republican leadership asleep at the wheel, the voters didn't like what they were seeing and wanted change. They got it. It can happen again.
"One modification is to get rid of what's sometimes called the 'recession ratchet.'"
This article is pretty generous, to want to remove the government shrinking provision in the TABOR. I'm stunned it was published in NR. I guess I shouldn't be. NR has been moving more moderate lately.
I don't agree with your assessment that Colorado will never be like California. I've seen both. I lived for a while in Westminster and watched it go from a boondock to a boomdock. Colorado IS becoming more and more like California.
While I concur that the legislature has underspent on infrastructure needs, which is more obvious the farther west you get in Colorado, letting the legislature grow the tax base even temporarily does NOT force them to get out of the stuff the state shouldn't be into and into spending on what it should be spending like roads! For instance, they could easily defund some of the more useless graduate schools at CU in Boulder. I'm glad they've cut those schools already--but they could cut a lot more. The annual state subsidy for higher education is nearly $600 million. Let the colleges charge a higher tuition if they want to keep money-loser programs. Cut the budget for the Department of Education's Management and Administration. Hawk some of that unused and underutilized land the government is saving for...what, a rainy day?
If current TABOR limitations are kept in place, state legislators would need to cut state spending less than 1.5 percent of the total state budget. 1.5%! After Brad Young admitted that “We took cash funds, we changed accounting methods, we pushed payments out into the future, we delayed payment dates,” you can't tell me that the taxpayers should trust these folks to cut to barebones expenditures--the legislature gimmicked around and now they're stuck. That's why the Pubbies are out!
I love the recession ratchet. If your state is in the mood for TABOR, I think you should push to have the government keep it in. It'll force politicians to make the choices they were elected to make. If they don't do what the people want in making those choices, they'll get booted. Wah.
And what sells me is that Bob Ewegen thinks this about it:
"Do your own math. Owens has already passed a $6.3 billion tax cut. Caldara wants to slash another $3.1 billion from our schools and highways. Which one is looking out for the future of Colorado?"
When Ewegen starts talking about 'looking out for the future' and yapping about schools and highways falling apart, you can bet there's gonna be a lot of taxpayers getting stuck. Screw the carrot. Give `em the stick.
Okay... who was the Freeper who made the call to Caldara just a few minutes ago? You were the last caller to the show, but ran out of time.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
This is exactly the reason Jon Caldara will make an excellent US Senate candidate from Colorado someday if he chooses to run. He announced his candidacy last year on April 1st and I fell for it hook line and sinker. I do hope that he will eventually run for office again.
Mike Rosen has expressed support for the compromise on several occasions over the last few weeks. Most Coloradans who are paying attention, know that the state budget is hamstrung and Owens is in a very difficult position. Colorado politicians need to step up and make a tough choice, or else suffer the consequences. The people just voted the GOP out of power and gave the Dems total legislative control for the first time in 45 years. With Republican leadership asleep at the wheel, the voters didn't like what they were seeing and wanted change. They got it. It can happen again.
The number one reason that Republicans lost the Colorado state house and senate is because the party as a whole was blind-sided by spending on politcal attack ads by Jared Polis and other limousine liberals here in Colorado. The ads that ran against local Republicans here were way below the belt and Republican candidates either didn't respond and/or didn't do so in time to offset the damage of having lies repeated over and over and over on radio and TV.
Now you've got it!
RIGHT! LOL Jon Caldara may make a better "Libertarian" candidate then crazy Rick Stanley ever did, but he will never get elected. Period.
>>>>The number one reason that Republicans lost the Colorado state house and senate...
Wake up! Colorado has its fair share of liberals, but the main reason the GOP was kicked out of office is simple. Both political parties have failed Colorado voters. The GOP failed Colorado more then then the Dems did. The budget process is hamstrung! PERIOD! Owens has made a reasonable compromise with the Dems. Wake up already!
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
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