TABOR and Prop CC

As always, Brian Eason does his fair share of research on the topics he’s writing, and we’ve already seen the Colorado Sun article make the rounds on social media – TABOR faces a reckoning with Prop CC.  But because TABOR, our state budget, and how Colorado funds anything gets so deep, we also wanted to offer a few other points of info and some additional resources to help make sense of it all.

(For your easy reference, here’s a link to Eason’s Colorado Sun article:  https://coloradosun.com/2019/09/04/proposition-cc-tabor-colorado-state-spending/?utm_source=Pico&utm_campaign=3e63f5fbab-Sun-Up&utm_medium=email&utm_term=0_2e5f9a0f1b-3e63f5fbab-54102565&mc_cid=3e63f5fbab&mc_eid=72f431c762 )

As Eason points out about TABOR, “…one of the biggest reasons the revenue cap hasn’t worked as advertised is this:  The state has simply taken on more responsibilities than it had 27 years ago…”

He adds:

“The other major change since 1992 involves how the state pays for education.  At the time, most of the money Colorado spent on K-12 schools came from local property taxes, while state taxpayers were the primary funders of public colleges and universities.

“But over the ensuing decades, local property tax collections plummeted due to another tax-limiting constitutional provision, the Gallagher Amendment.  The state stepped in, backfilling school districts as their local funding shrank.”

To better under understand the Gallagher Amendment’s impact on school districts’ local funding, we’d like to share this video created by the Colorado Fiscal Institute:

Brian Eason continues to explain: “Today, the state provides 63% of K-12 funding, up from 43% before TABOR took effect.  But without new taxes to pay for it, policymakers had to cut spending elsewhere to make ends meet.  And school districts ultimately didn’t escape unscathed.  When the Great Recession hit, lawmakers said they had run out of other things to cut, and the state began to fall behind a separate constitutional requirement to increase education spending each year to keep pace with inflation and enrollment…”

The constitutional requirement Eason refers to is Amendment 23.  For more on this, and how the Negative Factor aka B.S. (Budget Stabilization) Factor came into existence:

https://leg.colorado.gov/sites/default/files/gallagher-tabor-a23-nf.pdf

Eason quotes House Speaker K.C. Becker when she points out “The second problem is the fact that the costs of what the government spends money on, such as health care and asphalt, grow faster than the consumer expenses more rapidly than the TABOR limit allows its revenues to grow.”

Becker’s reference to “asphalt” may seem odd, but if you consider the issues our state is having with funding transportation, it makes total sense.   In a June 2019 SJK article, we quoted from a KDVR story:

“Colorado Department of Transportation shared the following estimates with Fox 31 for typical infrastructure improvement costs across the state, saying the cost varies depending on location:

  • Paving one mile of roadway/highway: $1.5 million for one lane/one direction
  • One mile of widening: $2 million for one lane/one direction
  • A new intersection: $3.5 million
  • One mile of guardrail: $300,000
  • Filling postholes: $60 per square yard”

http://www.supportjeffcokids.org/tabor-refunds/

And finally, because Eason includes a great chart titled “Figure 7 State Revenue by TABOR Status”, we thought it might be helpful if we provided an explanation of what an Enterprise Fund is.

“Dictionary of Accounting Terms for: enterprise fund

In governmental accounting, fund that provides goods or services to the public for a fee that makes the entity self-supporting.”

Eason makes certain to cover the TABOR supporters’ arguments including one recommendation that “instead of ditching the spending limit, policymakers should instead be looking to rein in healthcare costs and change the way the state pays for schools.”

Proposition CC will be on this November ballot.  If passed, it will provide much needed funding for Transportation, K-12 Education, and Higher Ed – but it’s not a permanent fix.  It should be noted, the legislation requires an annual audit, and regarding K-12 funding specifically notes: “…for public schools must be distributed on a per pupil basis and used by public schools only for nonrecurring expenses for the purpose of classrooms, and may not be used as part of a district’s reserve.”

For specifics, you can learn more about HB19-1257 abd HB19-1258

http://leg.colorado.gov/sites/default/files/documents/2019A/bills/fn/2019a_hb1257_f1.pdf

http://leg.colorado.gov/bills/hb19-1258

The Yes on Prop CC campaign website:  https://yesonpropcc.com/faq/