A decision this week by the state’s top court, and overwhelming legislative support for House Bill 1164, accomplished not one, but two important achievements.
The Colorado Supreme Court on Monday ruled that school districts can increase property taxes at a measured pace, without asking taxpayers for permission, should House Bill 1164 be signed into law.
Gov. Jared Polis should absolutely sign the bill.
Since 1993, Colorado has been hamstrung by the so-called Taxpayer Bill Of Rights, TABOR, passed unwittingly by voters because of its misleading curb appeal. What most voters thought they were agreeing to was a measure that simply required voter approval for all tax increases.
What could go wrong?
For starters, Colorado now has become one of the worst states for funding public schools, roads and colleges. That’s primarily the direct and indirect results of TABOR.
The idea is so bad, that in the decades since voters inflicted it on the Colorado Constitution, not a single other state has copied it.
Since the Constitutional amendment’s inception, it has undermined the American model of representative government. It was, however, the devil in TABOR’s myriad details that have done the most damage. The law was spiked with insidious formulas meant to not just limit taxes but drive them down — and revenues that run the government — with budget limits and required refunds of “excess” collected taxes. TABOR’s ill effects on every government in the state are notorious.
Hardest hit have been public schools. Not long after TABOR was imposed, the surreptitious formulas built into the unchangeable state Constitution, began draining cash from school budgets. The deleterious effects were compounded because of Colorado’s system of assessing the valuation of real estate to impose mill levies to calculate property taxes. Not only did these contrary systems stall school districts’ net resources, it caused much more havoc.
TABOR actually reduced local revenues dedicated to growing public schools, forcing the state to raid other general fund sources to try to make school districts whole.
Not only was the overall revenue stream cut, but rural and poorer school districts took an even harder hit based on cyclic property valuations moving in opposite directions. Burgeoning urban areas, by law, had to reduce the mill levy to compensate for rising property values. Rural and poorer districts, forced to follow suit, collected even fewer dollars for schools. That required the state to step in again with attempts to equalize the growing funding disparity.
In an effort to do an end run around TABOR, parents and education proponents persuaded statewide voters in 2000 to pass Amendment 23. While it’s mission was to guarantee stable funding for schools, jeopardized by TABOR, it also complicated the rest of state finances by creating statewide budget sinkholes elsewhere.
Local governments sought and found at least one solution to TABOR’s savage “ratcheting down” effect, which pushed government budget baselines down in lean years. Voters all over Colorado passed “De-Brucing” measures. Sarcastically named for TABOR’s author, Douglas Bruce, the measures “exempted” local governments from the details built into TABOR that restricted the use of “surplus” taxes in good economic years. It was a fast favorite of cities, counties and school districts across the state.
But in 2007, the State Department of Education wrongly instructed school districts to ignore the will of voters on the De-Brucing matter because of how the bypasses were impacting state TABOR imposed budget restraints.
House Bill 1164 nullifies that bad judgment. The bill and the Supreme Court pre-approval essentially sanction what voters in Aurora and across the state approved years ago.
It means property taxes will begin creeping up, and money intended for schools and owed them will finally be paid.
Should Polis sign the measure, it will mean tens of millions of dollars in school funding immediately and hundreds of millions of dollars in funding over the next several years.
But there’s another benefit to this progress against TABOR. Not only does the measure help solve the problem of underfunded schools, it focuses attention on how broken and destructive all of TABOR actually is.
While HB 1164 falls far short of asking voters to repeal TABOR, it helps everyone in the state understand how complicated and treacherous the unworkable measure is.
Colorado taxpayers paid average total taxes before TABOR, and they do so now.
The best check on taxation has always been voters choosing representatives that keep the taxpayer cost of running the state in check.
House Bill 1164 fixes one of TABOR’s biggest problems, but only a referred question to all Colorado voters will allow the state to unburden itself from this colossal fiscal albatross for good.