Denver Direct: From the Blue Book

Wednesday, October 19, 2005

From the Blue Book

Arguments Against

1) Referendum C is effectively a tax increase. It eliminates
TABOR refunds for five years and reduces them each year
thereafter. The state will spend roughly $3.743 billion that could be
better used by Colorado’s citizens and businesses. This reduction in
private spending could dampen the economic recovery that began in
2003, making the state a less desirable place for business
relocation. Not only are taxpayers giving up their sales tax refund,
they are also voting to suspend 15 other refunds, such as a child
care credit, lower motor vehicle fees, and capital gains credits. The
estimated five-year total for all refund methods, including the sales
tax refund, averages $1,106 per taxpayer.

2) Referendum C allows state spending to expand without being
specific about the programs for which the money will be spent. The
broad spending categories outlined in Referendum C cover
83 percent of state government. The new money could replace
current spending on health care and public schools, essentially
allowing the money to be spent for any purpose. The legislature can
change the spending priorities anytime after the election. In
addition, suspending the TABOR limit might lead to increases in fees
and charges during the next five years because there is no limit on
these increases and no requirement that these increases be
approved by voters.

3) The perceived budget shortfall could be handled in other
ways. TABOR allows government growth at inflation plus
population, but it does not guarantee it. Government growth at a
slower rate is acceptable and could encourage greater productivity
and efficiency. Since TABOR passed in 1992, state spending has
increased each year. Rather than spending more, the state could
save money by eliminating inefficiencies, consolidating government
functions, privatizing certain services, and reforming the state
purchasing system.