State treasurer asks state AG to withdraw TABOR proposal
DENVER – State Treasurer Mike Coffman has asked Attorney General Ken Salazar to withdraw his proposal to change the state’s Constitution to address the state budget’s fiscal crisis.
Salazar said last week he wants to change the Taxpayer Bill of Rights – the so-called TABOR Amendment – and Amendment 23, which funds K-12 education 1 percent more than the rate of inflation each year. If approved in the Legislature, both proposals would require a vote of the people.
Salazar proposes keeping TABOR requirements that say taxes can only be raised with a vote of the people but deleting everything else in the amendment, which voters enacted in 1992.
Specifically, he wants to eliminate TABOR’s spending limit, which bans government from saving money in good economic times to meet budget needs in poor economic times. He also wants to eliminate the requirement that forces the state to lower its expenditures when revenues fall – and keep them at that lower level the following fiscal year.
“The rigid rules of TABOR are designed to drastically limit the power of elected representatives to manage and determine spending priorities,” he wrote in a letter to the Senate Services Committee. Sen. Joan Fitz-Gerald, who represents Summit County in the state Legislature, sits on that committee.
“Colorado’s citizens can live with these rules when times are very good,” Salazar said, “but it’s clear that government lacks the ability to respond to the bad times. Unless these formulas are changed, they will harm Colorado for many years.”
Coffman responded by saying Salazar’s proposal does not create a “rainy day” fund as he intends, and it eliminates the only existing mandated reserve the state has – the fund to cover natural disasters.
“He quickly wrote a simple proposal, and I generally think simple is better, but this is truly a complex issue where there are no simple solutions,” Coffman said. “The bottom line is that Salazar’s proposal does not address several critical issues that, in his own material, he notes as reasons for proposing the changes.”
Salazar also wants to change Amendment 23 so funding growth requirements can be excused during times of economic crisis.
According to Coffman, a study of the repercussions of Amendment 23 indicates school funding sources will be insolvent by 2006 unless substantial reforms are made.
“Crafting a constitutional amendment is a very important task that takes time and input from a wide range of sources,” Coffman said. “We owe it to the voters to get this right the first time and to set in place a comprehensive set of reforms that will settle these matters for the long term.
Fitz-Gerald said the proposals are simple – too simple.
“There are a whole lot of things that need to be considered,” she said. “But this doesn’t go to some of the other things sitting out there affecting revenues. We need a study of the interplay between Gallagher, TABOR and Amendment 23. Salazar’s proposal still leaves out all the special tax cuts – and the not-so special tax cuts. We need to take a comprehensive look at everything to get Colorado back into the black.”
The Gallagher Amendment, implemented 20 years ago, keeps residential tax assessment rates lower than those for commercial properties. The problem with that, Fitz-Gerald said, is that school districts are funded by residential taxes, and when residential tax assessments are too low – and school districts keep growing – the state has had to make up the shortfall with general funds.
“We can’t keep those rates down,” Fitz-Gerald said. “If you have lower state income taxes and lower sales taxes and you have a bad economy and a general fund that needs to fund all the state services, this (proposal) doesn’t answer all the question that are affecting the economic health of the state. We’re scrambling to find money for things that are breaking our hearts that we’re not spending money on.”
Jane Stebbins can be reached at (970) 668-3998 ext. 228 or firstname.lastname@example.org.
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