Colorado Proposition CC Claims Taxation Is Theft

Warren Albrecht | @drw_albrecht

On November 5, Colorado shot down Proposition CC which would tip-toe the line between majority permission for fiscal spending and taxation is theft.  Earlier this year, the Colorado legislature sent to the citizen voter a proposal to allow the legislature to keep any surplus tax revenue to be spent on transportation or education. In 1992, a Taxpayer Bill Of Rights was passed. This is a Colorado constitutional amendment which,

requires that voters approve all tax increases and doesn’t allow government spending to grow faster than population and inflation. 

This means if in a strong economy, there is a surplus of tax revenue, the Colorado government has to return this money as a refund. Voters in local districts or cities in the past have voted to allow this type of tax confiscation for a limited number of years. This new proposal would be statewide and permanent. The slogan “taxation is theft” which many libertarians use has been attributed to Murray Rothbard.

Do Supporters for Proposition CC prove point?

TABOR refunds have only happened 9 times since 1992. The Goal of Proposition CC is to keep that money during those times. But this year’s TABOR limit is $14 Billion. Supporters say the education of K-12, Higher education and transportation is underfunded. These are high unionized areas of funding. Democratic Speaker of the House KC Becker is honest about how the state views its citizens,

Right now, we have economic growth and yet the state doesn’t get to benefit from it

TABOR does allow the public to vote to override the limit or increase taxes. Much more than 50% of the local school districts, counties, and municipalities have lifted the spending cap of TABOR. Supporters of Proposition CC direct attention to Colorado’s low spending on Transportation and education compared to other states, though USNews and World Report ranks Colorado 11th in education ( K-12 and higher ed). Colorado’s debt is ranked 20th. 55.6% of taxes are received from Income.

This compares to South Dakota which has a constitutional budget balance amendment. Data from 2015 show income taxes raised only 1.9% of revenue and 82.4% was from sales taxes. South Dakota is ranked #3 for fiscal stability with USNews and World Report. Colorado is 29th. Higher education is ranked 10th  just behind Colorado a #9. This all without South Dakota having the Cannabis industry Colorado currently enjoys.

Opposition to Proposition CC

An editorial in the Colorado Springs  Gazette opposes proposition CC. The editorial mentions how US News, US News and World Report, and USA today have all ranked Colorado’s economy as number 1. Then questions if Colorado has had a Taxpayers Bill of Rights since 1992, why now create a situation in which the TABOR is nullified. Currently, Colorado is said to have a $1 billion surplus that does not exceed TABOR’s threshold.

Ask Douglas Bruce, the former legislator who wrote Colorado’s Taxpayer’s Bill Of Rights if TABOR has constrained Colorado’s schools or any spending. Property tax revenue from 1993 until 2017 has increased $3.2 billion and state revenue was under $10 billion in 1993 and is today about $33 billion.

Are State propositions or referendums Truthful?

In 2005, Referendum C was passed. This paused the TABOR requirements during a period of concern for Colorado’s economic downturn. But this was limited for 5 years, voted by the public as dictated under TABOR and supported by Republicans and Democrats. Referendum D failed. This would have let the state borrow over $2 billion.

But as documented in a Report on Referendum C revenue dated October 15, 2019, the state is still not following the TABOR restrictions. K-12 education support has increased from $361.7 million in 2005 to just over $921 million for 2019-2020. During the same period, higher education support has increased from $353.7 million to over $860 million. Transportation projects continue to get money from Referendum C. Referendum C is reported as though it has ended. Referendum C was worded as,

WITHOUT RAISING TAXES AND IN ORDER TO PAY FOR EDUCATION; HEALTH CARE; ROADS, BRIDGES, AND OTHER STRATEGIC TRANSPORTATION PROJECTS; AND RETIREMENT PLANS FOR FIREFIGHTERS AND POLICE OFFICERS, SHALL THE STATE BE AUTHORIZED TO RETAIN AND SPEND ALL-STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR THE NEXT FIVE FISCAL YEARS BEGINNING WITH THE 2005-06 FISCAL YEAR, AND TO RETAIN AND SPEND AN AMOUNT OF STATE REVENUES IN EXCESS OF SUCH LIMITATION FOR THE 2010-11 FISCAL YEAR AND FOR EACH SUCCEEDING FISCAL YEAR UP TO THE EXCESS STATE REVENUES CAP, AS DEFINED BY THIS MEASURE?

And for each succeeding fiscal year. Bruce says it best,

“they promised a five-year timeout — and that was fourteen years ago. Their idea of temporary is like a temporary government program. Which is forever.”

Colorado politicians as thieves

In 2016, a group of politicians sued the Colorado Governor through Kerr v. Hickenlooper, stating that the Colorado Taxpayer Bill Of Rights is unconstitutional under the Guarantee Clause of the United States Constitution. Article IV requires the US to guarantee every state a republican form of government. That means the legislature taxes and people of the state in a democratic means by voting, can’t restrict that.  Derek T. Muller has done a nice job in detailing this argument and the Tenth Circuit Courts’ opinion. Look Here and Here.

There is plenty of precedent against making this to SCOTUS which is discussed. State legislators, county and city officials suing the citizens of the state for more power to tax should be concerning to all. This is now Kerr v. Polis with a new governor and continues in the courts.

The Father of TABOR

The father of TABOR in colorado would agree with Murray Rothbard,

“These people are fanatics,” Bruce says. “I’m waiting for them to tie TABOR to Russian collusion. They think the solution to all their problems is to steal all the money they can get and not even let people vote. They want us to vote to give up our right to vote. They think they can do that with a bill even though it’s patently illegal — not that they care.”


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