Colorado residents are enjoying some good times economically these days. Unemployment is down, income growth is up, and tax receipts are soaring. In fact, tax receipts grew by a whopping 13 percent in fiscal 2006. During the 1990s, Colorado taxpayers could look forward to tax relief during such times of prosperity. This is because the Colorado’s Taxpayer’s Bill of Rights (TABOR) required that all surpluses over its tight revenue limit be immediately rebated to taxpayers.
However, because TABOR’s revenue limit was suspended just two years ago by Referendum C, this year’s strong economy will be funding not tax relief, but big government. In fact data from the Office of State Planning and Budgeting indicate that the legislature appropriated over 800 million dollars above the TABOR limit in both 2006 and 2007. This means that the average Colorado taxpayer has missed out on 910 dollars in tax rebates during the past two fiscal years.
Interestingly, these missing tax rebates may present TABOR supporters with a new strategy both in Colorado and elsewhere. Since the passage of Referendum C in Colorado, proponents of TABOR-style fiscal limits have resorted to one of three strategies to defend their fiscal limits in the court of public opinion. They have either: 1) distanced their proposals from TABOR 2) placed the blame for Colorado’s earlier fiscal troubles elsewhere or 3) embraced Referendum C, saying that the goal of TABOR was to allow for more citizen participation in decisions about state fiscal policy.