TABOR at a glance
What it requires: The 1992 constitutional amendment limits annual growth of government spending to population increase plus inflation, and requires voter approval of all tax increases. When revenue falls, as it did in 2001-2003, the state’s spending base is permanently reduced (the so-called ratchet effect).
Surpluses: Excess revenue must be returned to taxpayers. The first refunds were paid in 1997, but no refunds were paid in recent years because there wasn’t excess revenue. For the state, the legislature decides how to distribute refunds and earmarks some money for specific groups of taxpayers.
TABOR’s impact
Spending: Population and inflation each grew about 3 percent a year during the 1990s, so state government spending rose about 6 percent a year.
Schools: Between 1991 and 2000, state and local per-pupil funding of schools fell from $299 above the national average to $697 below. The state fell from 26th to 32nd in per-pupil spending.
Colleges: Based on spending per residents’ income, the state dropped from 34th in the nation in 1992 to 47th in 2004 in support for higher education.
Roads: In 1994, 65 percent of Colorado roads were in poor condition. By 2001, 73 percent of the roads in the state’s urban and suburban areas were considered poor.
The future
Referendum C passes: The state can spend $3.7 billion over the next five years that otherwise would be refunded.
Referendum C fails: State spending will have to be cut about $400 million for the 2006-07 budget year.