Colorado voters regained their fiscal sanity this November when they voted for Referendum C—a five-year suspension of the Taxpayer Bill of Rights. Because the anti-public services law has served as a model for legislation introduced in 20 states this year, the vote sends a strong signal to TABOR zealots to stand down.

The passage of Referendum C marks an enormous victory for labor, higher education, nonprofits and even some businesses that worked for the suspension, but especially for the Colorado Federation of Public Employees, which has been trumpeting the dangers of this model of tax “reform” for years.

Passed in 1992, TABOR puts tight restrictions on spending growth and automatic caps in place during times of economic downturn. A most pernicious feature of TABOR came into play during the state recession of 2001. When state revenues dropped by 16 percent, the baseline for future state spending also fell. Due to TABOR, which also requires voter approval of any new tax or tax-rate increase, the state has cut its spending by more than $1 billion since then.

As we have seen nationwide during recessions, first on the chopping block is higher education. In Colorado, colleges have taken a 20 percent hit since 2000. But that’s nothing: Had voters not voted for Referendum C, state Sen. Ken Gordon told National Public Radio that “we would have been the first state to defund higher education,” with a budget for universities at zero within the decade.

By passing Referendum C, Colorado voters have given up an average rebate of $491 spread out over the next five years. They’ve said they believe in government enough to invest their 3.7 billion tax dollars in vital public services. This is a message other states contemplating TABOR bills should take to heart. [Kathy Walsh]

Nov. 10, 2005