Colorado might permanently loosen a constitutional constraint that has caused the state on-going fiscal damage, the so-called Taxpayer Bill of Rights (TABOR).
Voters approved an amendment to their constitution enacting TABOR in 1992. TABOR limits the growth of state revenues to a combination of inflation and population growth by requiring that any revenue in excess of this limit be refunded to taxpayers. TABOR also requires that any tax increase be approved by voters. The main problem is that inflation is only a very crude measure of changes in the costs faced by state and local governments, which for the most part have outpaced inflation in the rest of the economy.
In 2000, Colorado voters complicated matters further by approving a very different measure, Amendment 23, which mandates an increase in funding for K-12 education by at least 1% plus inflation every year. This amendment was a response to the dismal state of Colorado public schools in the wake of unrealistic revenue restrictions enacted in TABOR.
Enacting both of these provisions made sense to many voters who would like to see both lower taxes and more spending on education. The problem is that the combination of TABOR and Amendment 23 serve to starve transportation, higher education and just about anything that is not K-12 education.
Now, Colorado House Speaker Andrew Romanoff, with the backing of Governor Bill Ritter, plans to unshackle the legislature from these impossible demands. His proposal, if approved by two thirds of both chambers and by the voters, would repeal Amendment 23 and the part of TABOR that requires the state to refund taxes when the revenue limit is exceeded. Fortunately, the citizens of Colorado are likely to look favorably on this proposal, given that they voted in 2005 to suspend TABOR's revenue-refund provision for 5 years. This suspension would essentially become permanent under this proposal.
But one problem associated with TABOR would not be fixed under this plan: tax increases would still require voter approval. Of course, it would be better if the Colorado legislature were allowed to write tax policy themselves. That is, after all, what lawmakers are elected to do. But a related improvement to the policymaking process appears to be on its way. Local legislators will likely soon be given the authority (by a bill expected to be signed by the governor) to propose sales tax increases to their voters without having to first seek the approval of the state legislature.