Did Colorado voters run away from tax restriction requirement?

October 4, 2012

Perhaps by virtue of its inclusion in the 2012 Voters' Guide the following claim is making the rounds to argue against Initiative 1185:

"Measures like 1185 may sound like a way to protect taxpayers, but Colorado passed a similar measure with disastrous results. It cut off funding for schools, roads, and immunizations for kids, and caused so many problems that Colorado’s Republican Governor proposed a measure to suspend it, which voters passed."

So did Colorado's Republican governor propose and voters adopt a suspension of the tax restriction? No.

What did happen in Colorado was a five-year suspension of the automatic tax rebates that occurred under the state revenue limit. The requirement for voter approval of all tax increases was not and has not been suspended. Here are details on what was known as the 2005 Colorado Referendum C:

  • permits the state to spend the money it collects over its limit for the next five years on health care, public education, transportation projects, and local fire and police pensions;
  • eliminates, for the next five years, refunds that taxpayers receive when the state collects more than it is allowed to spend, and reduces these refunds thereafter;
  • uses the highest amount of money the state collects in any year during the next five years to calculate allowable state spending thereafter; and
  • caps annual increases in the new state spending amount at inflation plus population growth, beginning in 2011.

The ballot title and supporters of Colorado Referendum C stressed it accomplished these goals, "Without raising taxes."

According to Carolyn Kampman, Chief Legislative Analyst for the Colorado Legislature:

Pursuant to the Taxpayer's Bill of Rights (often referred to as 'TABOR'), Section 20 of Article X of the Colorado Constitution, voter approval in advance is required for 'any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district.'  Thus, the Colorado General Assembly cannot enact a tax increase unless Colorado voters approve it.

Additional Information
Tax restrictions across the country

Supermajority for Taxes Legislative Survey Results