Colorado Proposition CC would let state keep taxpayer refunds

DENVER — The last bulwark of fiscal conservatism standing between Colorado Democrats and their liberal agenda is the 1992 Taxpayer Bill of Rights, and Republicans fear its checks on the state budget and taxation will be next.

On Tuesday’s ballot is Proposition CC, which would allow the state to keep state revenue that exceeds the budget cap, also known as the TABOR surplus, to be used for transportation, K-12 and higher education, instead of refunds to taxpayers.

Gov. Jared Polis, a Democrat, said TABOR’s “arbitrary formula,” which requires taxpayer rebates in flush economic years, has limited the fast-growing state’s ability to ease traffic congestion, repair road infrastructure and attract top teaching talent.

“A lot has changed in thirty-plus years and this fixed formula is now obsolete and doesn’t let us keep up with the needs of our fast-growing state,” Mr. Polis said in an op-ed last week in The Denver Post. “It’s senseless for us not to repair unsafe bridges and maddening to watch class size bloat and great teachers leave our schools.”

Foes argue that Proposition CC would result in taxpayers forfeiting all future refunds with no guarantees on where the money would be spent — and serve as a “trial balloon” for a repeal of TABOR.

“This isn’t just about Proposition CC,” said Arapahoe County District Attorney George Brauchler. “This is about developing a model and some momentum for coming after TABOR, and I fully expect if this thing passes, next year they’ll be back for the rest of TABOR.”

Since the advent of the “Gang of Four,” the Colorado megadonors seeking to flip the formerly purple state to blue, Democratic candidates and issues have had an enormous cash advantage, and the Proposition CC campaign is no exception.

The pro-CC forces have raised $4.45 million, including $500,000 from Fort Collins heiress and Gang of Four billionaire Pat Stryker, while the opposition has collected $1.75 million, according to Ballotpedia.

Even so, the Colorado Climate Survey released Sunday by the University of Colorado-Boulder showed Proposition CC trailing: 50% of those surveyed said they opposed it, while 43% were in favor and 7% undecided.

Despite the state’s steady march to the left, Colorado voters still support TABOR, according to the survey.

“Generally speaking, TABOR continues to have relatively strong support in the state,” said the university analysis. “The poll has asked registered voters if they support the measure for each of the past four years. Every year TABOR has consistently had more support than opposition — between 45% to 53% said they supported it, while between 22% to 30% said they opposed it.”

In addition to forbidding state spending that exceeds its population-growth-plus-inflation formula, TABOR requires voter approval for local and state tax increases, an ongoing source of frustration for Democrats.

In the 2018 blue wave, Colorado voters replaced the last remaining Republican state officeholders with Democrats and obliterated the Republicans’ one-vote state Senate majority, but also rejected proposed state tax increases for education and transportation.

“If Proposition CC loses, I think it will be a huge blow to Polis and his Democratic majorities,” said Republican strategist Dick Wadhams, who is not involved in the campaign. “If it passes, the next thing on the docket will be a full repeal of TABOR, no doubt about it.”

’We are not undoing TABOR’

The pro-CC campaign denied that the measure dismantles TABOR.

“Prop CC does what TABOR requires: asks voters to invest revenue beyond TABOR’s arbitrary limits,” said the Yes on CC website. “Voters will still be asked to approve future tax increases. We are not undoing TABOR.”

Even with TABOR’s budget and taxation restrictions, state government has boomed. Colorado’s postrecession spending rate grew by 28%, second only to that of North Dakota, according to the Pew Charitable Trusts, and state expenditures per resident soared by 69% from 1996 to 2018.

Amy Oliver Cooke, executive vice president of the free market Independence Institute, called Proposition CC a “blank check” for a “crisis” that doesn’t exist, given that the state budget has ballooned 71% in the past decade while population has grown by 15%.

“TABOR frustrates some legislators because it keeps them from wildly spending our families’ hard-earned tax dollars without our consent,” Ms. Cooke said in an op-ed for Complete Colorado.

Not every year is a refund year: Only nine of the 25 years since TABOR’s passage resulted in rebates because of the Great Recession and Referendum C in 2005, which suspended the refunds for five years. Since 2005, refunds have totaled $614 million.

With the state’s economy in overdrive, however, the Governor’s Office of State Planning and Budgeting estimated a surplus of $1.7 billion over the next three years, meaning joint filers would receive $638, according to the Common Sense Police Roundtable.

Supporters include Mr. Polis and three former Democratic governors, while former Gov. Bill Owens and Sen. Hank Brown, both Republicans, oppose the measure.

In its endorsement, The Colorado Springs Business Journal said that “TABOR prevents the General Assembly from being able to save adequately for the inevitable economic downturn, so during recessions the state is forced to cut services.”

“With that extra money — about $310 million in 2019-2020 and $342 million estimated for 2020-2021 — we could improve roads across the state, and end traffic jams on Powers Boulevard, which is a state highway though it receives little attention from the state,” said the Oct. 18 editorial.

Under Proposition CC, $103 million would be directed to transportation projects, $103 million would go to higher education and $103 million would be spent on “non-recurring” expense for K-12 public schools, “like buying books or computers or creating incentives to retain and attract quality teachers.”

“Prop CC does not raise taxes, and it requires a public audit every year to ensure accountability,” says an ad airing in the Denver television market. “Isn’t it time to start fixing some things in Colorado?”

Michael Fields, executive director of Colorado Rising Action, which opposes Proposition CC, disputed the contention that the measure contains no tax hike.

“They’re going to be keeping and spending more of our money,” Mr. Fields said. “That’s a tax increase.”