What Is At Stake In The Current Battle Over Colorado’s Tax and Spending Limits?

March 2, 2009 by bpoulson
Filed under: Issue Backgrounders, Publications 

IB-2009-C (March 2009)
Author: Barry W. Poulson

PDF of full Issue Backgrounder
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Executive Summary:
This year the Colorado legislature is debating a bill, (SB228) that would eliminate the Arveschoug-Bird Amendment. That Amendment was enacted by the legislature in 1992, a few months before the voters of Colorado enacted the Taxpayer’s Bill of Rights (TABOR) Amendment. Arveschoug-Bird caps the growth of general fund spending at 6 percent per year. With the 6 percent cap in place, surplus revenue above this limit is transferred into the Highway Users Trust Fund and to capital construction.

There are several reasons why this bill would be fiscally irresponsible. The bill would eliminate what has proven to be a very effective constraint on the growth in general fund expenditures, and also on how state revenues are allocated between transportation and capital projects, and other expenditures. The bill also raises constitutional issues and the role of the initiative and referendum process in amending the constitution.

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