A perspective on TABOR, Gallagher and Amendment 23

Filed under: Opinion |

Start a discussion with “TABOR” and you’re likely to witness a division not seen since Moses parted the Red Sea. The Taxpayer’s Bill of Rights appears to be as polarizing today as it was when approved by the voters in 1992. Toss in the Gallagher Amendment and mandated funding for K-12 and you’ve got volatility and combustibility on a grand scale.

Last week, the University of Colorado at Colorado Springs’ Center for the Study of Government and the Individual held a one-day symposium that offered an overview and perspective on TABOR.

As Jim Null, the center’s executive director, put it, the gathering was intended to be an informational event, not a debate or a point/counterpoint (but of course what’s the point of having a symposium without a little debate?). And regardless of which side of the sea you happen to be swimming in, one thing was abundantly clear at the end of the day: Something’s going to have to change.

TABOR requires that governmental entities seek voter approval for some tax policy changes and limits the amount of revenue that those entities can collect and spend. Gallagher designates that the property tax collections should be proportioned 45 percent residential and 55 percent commercial. Amendment 23 mandates increased funding for schools.

While the above descriptions are undoubtedly simplistic, it doesn’t take an advanced degree in economics or mathematics to see the train wreck that is certainly looming. Limiting government and allowing voters to have a say about taxation isn’t a bad idea. Keeping property taxes low is something that most folks would line up for in the rain. And nobody’s going to argue against making whatever investment is necessary to provide children with a quality education. The three just don’t work well when combined in present form.

TABOR seems to be at the top of everyone’s hit list when it comes to fixing the problem. Proponents say that government has grown in the decade since TABOR. Opponents say that it restricts revenue growth so severely that critical needs are not being met. Both offer statistics to provide credence to their arguments. Both claim their information proves that TABOR is either a success or failure.

While the pros and cons of the legislation as a whole could be (and was) dissected and disseminated all day, there are some business-related comparisons of pre-TABOR and post-TABOR that are worth considering.

Using Colorado’s fiscal 2002 Comprehensive Annual Financial Report and “Colorado Economic Perspective” from the Office of State Planning and Budgeting, Fred Holden, a public policy specialist was able to draw comparisons between the 10 years before and the 10 years after TABOR became law.

From 1983-1992, total job growth in Colorado was 18.1 percent. Government employment rose 21.1 percent and non-government employment rose 17.5 percent. From 1993-2002, total job growth was 34.6 percent. Government employment rose 20 percent and non-government employment rose 37.7 percent.

While the growth of government jobs remained fairly stable, growth in the private sector more than doubled. Whether entirely attributable to TABOR is something that others can debate, but more people working means a better business climate and a better economic picture.

During the 10 years before TABOR, per capita personal income rose 59.2 percent or $7,810. During the 10 years after TABOR per capita personal income rose 65.3 percent or $14,437. Again, more disposable income can only bode well for business in general.

So is it possible to deduce that TABOR has been good for business? That’s probably a hypothesis that is open to debate by either side. But to say the business climate and job growth has been good during the TABOR years is undeniable.

For that reason alone, whatever changes the legislature considers so that TABOR, Gallagher and Amendment 23 can live in harmony with one another should be undertaken with an eye toward ensuring the upward trend.

Education is important. So is affordability of housing. But communities prosper and grow because of a good business climate. Without a strong business base, there’ll be no families to send children to schools, no matter how good they are and there’ll be no prospective buyers looking to purchase homes, no matter how affordable or how low the tax burden.

Business fuels the economy. Let’s hope that those who are entrusted with making the changes keep that thought on the front burner.

Mike Boyd is the new managing editor of the Colorado Springs Business Journal. He can be reached at mike.boyd@csbj.com or 634-3223, ext. 206.