Similar to last year’s Senate Bill 173, legislative Democrats are returning this year with another effort to bypass Colorado’s Taxpayer’s Bill of Rights (TABOR) by reclassifying certain state revenue streams.
While Senate Bill 26-042 may have some plausibility under specific TABOR terms, it raises broader concerns about the runaway growth of Colorado’s state government, and the mechanisms legislators pursue to evade voter consent over taxation.
What the bill does
While TABOR generally limits the growth of a portion of state revenue to a modest formula of population growth plus inflation, it allows for certain carve outs such as “damage awards” and “collections for another government.”
While TABOR did not define those terms, the implementing statutes defined “damage awards” as “any pecuniary compensation received by the state as a result of any judgement or allowance in favor of the state,” and “collections for another government” as “any revenue that is collected for the state for the benefit or use of another government other than the state and passed through to that government other than the state for the benefit and use by that government.”
SB-042 reclassifies certain existing streams of money, increasing revenues available to spend (and thus decreasing overcollected revenue that would otherwise be refunded to taxpayers) by about $31 million.
The largest of these would-be-reclassified funds are “HUTF Traffic and Vehicle Violations,” “Crime Victim Compensation Fund,” and “Excise Tax on Aviation Gas and Jet Fuel.”
Broader concerns
TABOR was was enacted to “reasonably restrain most the growth of government,” and requires voter consent to exceed those reasonable limits.
But as recent Independence Institute research shows, state government continues to grow beyond TABOR, even when adjusting for population and inflation, and even relative to broader state economic trends.
This has mostly been done through death by a thousand new taxes disingenuously disguised as “fees,” as most Coloradans can attest.
While on paper this may appear as just part of an ongoing effort to clarify definitions of certain funds under TABOR, we all know the real reason this has been a priority in the last two legisslative sessions.
The more revenue lawmakers can remove from the TABOR limitations, the less hard-earned money Coloradans get to keep in their pockets, and the less consent they have over state tax policy.
Bills like SB-042 must be seen for what they really are, part of a bigger effort to gradually erode Coloradans right to taxation with representation.
