BillHobbs.com is a frequently updated blog of original reporting and commentary by Bill Hobbs, a longtime Nashville journalist and media relations adviser. I am currently serving as communications director for the Tennessee Republican Party, a job I began on Oct. 29, 2007.
You may have heard that Gov. Owens from Colorado recently sent a six page letter to me and the leaders of almost every other free market think tank in America to defend his stance in support of the two upcoming Colorado ballot referenda that would essentially kill TABOR in Colorado. He followed it up last week with a second letter with additional information in defense of his weak assertion that he needs more taxpayer dollars to spend as he and the CO General Assembly see fit. As you may have seen on the Tennessee Center for Policy Research website, we joined two dozen state think tanks to answer Gov. Owens' attacks on TABOR and poor justifications for supporting the toppling of the most successful TEL in America.
You can view the letter here or read the full text in the extended portion of this entry.
Meanwhile, if you're interested in a Taxpayers Bill of Rights for Tennessee, you should read these two research papers of mine:
The Honorable Bill Owens
Office of the Governor
136 State Capitol
Denver, CO 80203-1792
Dear Governor Owens:
We are writing to you in response to the letter dated October 12th, 2005 which you sent to leaders of the free-market think tank movement.
As leaders of the free-market think tank movement, we appreciate your past efforts on behalf of Colorado's taxpayers and the free-market movement as a whole. The pro-growth policies enacted during your term as governor have not gone unnoticed, and many of us have referred to Colorado as the model for our states.
As leaders of the free-market think tank movement, we thank you for the work you have put into promoting the Taxpayer's Bill of Rights (TABOR) in Colorado and supporting efforts to implement TABOR-like tax and expenditure limitations across the country, as we strive to achieve fiscal restraint within each of our state governments.
But as leaders of the free-market think tank movement, we have to disagree with your assessment of Referendum C, which Coloradans will vote on this November 1st. In your letter you sum up Referendum C as follows: "No tax increase. No budget busting. No change to Constitutional Taxpayer Protections. No change to TABOR."
You know better than any one of us that TABOR is wrongly blamed for Colorado's current budget woes. After all, as you point out in your letter, you have consistently touted TABOR as Colorado's bullet-proof vest. Study after study - most recently a CATO Institute Briefing Paper - have made clear that the budget pressures Colorado has faced for the past four years are not a direct result of TABOR, but of a recession, a drought, and Amendment 23: a misguided educational mandate that forced government to annually increase education spending by at least the rate of inflation plus one percentage point for FY 2001-02 through FY 2010-11, and by at least the rate of inflation thereafter, regardless of economic conditions and at the expense of other programs.
Referendum C would allow Colorado's government to keep all excess tax revenues beyond the spending limit set by the Taxpayer's Bill of Rights. But beyond this, the measure would strike a lasting blow to TABOR by permanently increasing the TABOR-imposed state spending limit. Currently, TABOR applies inflation and population growth to either the actual revenue or the TABOR limit in any year, whichever is lower. Referendum C will apply inflation and population growth times the previous year's limit.
Short of being a long-term budget fix, Referendum C is a tax and spending increase that would permanently change TABOR. It would pull the rug out from under TABOR by crippling its spending restraint provision and laying the groundwork for similar damage after 2010. Coupled with Referendum D, which would allow the state to borrow over $2 billion for new spending projects, and make it even more difficult for future budgets to withstand an economic downturn, Referendum C is far from being a sustainable solution for Colorado's budget woes.
As Michael New and Stephen Slivinski point out: If Referendum C passed and revenue was above current projections - which is not unlikely - the legislature could spend all of that money without further voter approval. Estimates have already gone up dramatically: from $3.4 billion in September 2004 to $3.7 billion today. In periods of economic growth estimates of government revenue growth tend to be too conservative. If this holds true for Colorado, and estimates are off by a similar amount as they were from September to now, taxpayers would forego another cumulative $1 billion over the next five years. Referenda C and D would amount to a blank check for increased government spending.
Based on analysis by Americans for Tax Reform, this "blank check" would require each Colorado worker to work an additional 11 days over five years to pay for this new government spending
Besides, Colorado's government is not as starved as some make it sound. Even under TABOR restraints, total spending including federal aid doubled from 1992 to 2002. From 1998 to 2002 alone, government spending increased nearly 15 percent faster than Colorado's economic growth. And Colorado government had the third highest rate in spending growth since taxpayers began receiving refund checks in 1997, topped only by Vermont and California.
A number of lawmakers have addressed Colorado's budget woes as a spending problem this legislative session, and have offered measures that would have saved the state millions of dollars. Yet, the majority in the legislature was not interested in any of these solutions. Instead, their eyes were locked on the TABOR excess revenue. There is no incentive for budget restraint if the onus is taken off the legislature by dismantling the very essence of TABOR. As leaders of the free-market movement, we are not only concerned about the damage Referenda C and D would do to the Colorado Taxpayer's Bill of Rights, but to efforts to enact tax and expenditure limitations across the country.
As you can attest through your previous work to promote TABOR, opponents of TABOR are only waiting for Referendum C to pass. For them, passage of Referendum C would amount to admitting that the most formidable of all tax and expenditure limitations has failed.
Colorado may be in need of budget reform, but crippling the Taxpayer Bill of Rights through Referendum C is not the answer for Colorado, and it certainly won't help the effort in our respective states.
Sources for data in the report included the following:
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