The Taxpayer’s Bill of Rights amendment has been an overwhelming success in Colorado. Colorado’s TABOR has successfully restrained the growth of state government and allowed millions of taxpayers to keep more of their hard-earned money.
Since Colorado enacted the Taxpayer’s Bill of Rights in 1992, the state has experienced one of the strongest economic growth rates in the country and has provided taxpayers with more than $3 billion in tax rebates and refunds.
Colorado experienced a challenge almost entirely because of Amendment 23 — a state constitutional amendment that mandates large increases in spending on education programs. The ultimate answer to Colorado’s budget challenge is the repeal of Amendment 23.
While Amendment 23 is the main cause of Colorado’s challenge, that state’s version of the Taxpayer’s Bill of Rights isn’t perfect. That’s exactly why the TABOR legislation proposed in Kansas includes key improvements that will help us achieve even better results than Colorado has enjoyed.
One key improvement we’re proposing to the Taxpayer’s Bill of Rights in Kansas is the inclusion of budget stabilization and emergency funds that will help us better deal with economic downturns. In periods of rapid economic growth, when revenue exceeds the TABOR limit, surplus revenue would be deposited into the emergency fund and budget stabilization fund. When the cap is reached on those funds, surplus revenue is then offset by tax cuts or tax rebates. In periods of recession, when revenue is falling, money is then transferred from the budget stabilization fund.
Another important improvement we’ve proposed to the TABOR in Kansas is the elimination of the so-called “ratchet-down” effect. In Colorado, when revenues drop during a recession, the TABOR spending and revenue limit drops to that lower level and will grow from there — even after the economy recovers and revenues bounce back. That’s not the way it’ll work in our state. Here, when revenues drop during a recession, the “Rainy Day” fund allows TABOR spending and revenue limit to remain at the pre-recession high-water mark and only kick back in after revenues recover to pre-recession levels.
These three key differences between a Kansas Taxpayer’s Bill of Rights and Colorado’s — the absence of constitutionally mandated annual spending increases here, the ratchet-down correction, and the budget stabilization and emergency funds — means our Taxpayer’s Bill of Rights will give us stronger economic growth, more tax relief and restrained government spending — without any of the minor side effects Colorado has experienced.
Courtesy of Americans For Prosperity, Kansas Chapter.Learn how you can support the Voice for Liberty. Click here.