An Interview with Catherine Strode
Two Republican legislators are proposing a change in the TABOR formula that would allow the state to retain more taxpayer dollars. State Representative Dan Thurlow (R-55) and State Senator Larry Crowder (R-35) are co-sponsoring House Bill 17-1187, which defines a change in how the excess state revenues cap is factored. If the bill passes, it will go before the voters for approval in November. In an interview with Catherine Strode, State Representative Dan Thurlow says if the bill passes, and voters approve the measure, it would alleviate state budget crises.
Why are you bringing this bill forward?
“No matter what we try to do to move the state forward, we get to the budget and we don’t have enough money to build roads, to fund education or higher education, or to do any of the things we want to do. It’s not that we don’t have the money but we have all these contradictory amendments to our constitution that keep us from just keeping the money we have. TABOR is the primary one. Now that we’re back up against the TABOR excess revenue cap, we will refund $270 million to the taxpayers this year. By the time you break that down into five and a half million taxpayers, it’s only $40. At the same time, we’re trying to figure out a way to finance roads. We’re talking about sending a measure to the voters to raise sales tax in order to build more roads. That is just a silly way to run any organization: to have the money on one hand, send it back in small increments, and then turn around and ask the voters if you can raise more money in a different way. Why don’t we simplify the process and just keep what we’ve got with the voters’ permission? I want to make sure everybody understands this proposal. It does nothing by itself other then send an initiative to the voters to say, ‘Do you want to change the definition of the excess revenue cap?’”
What is the proposed TABOR cap change?
“Right now, the definition of what is called the excess revenue cap is: the year to year change in inflation plus population growth. That sounds quite logical to begin with, but inflation always runs behind the growth of the Colorado economy. This lagging economy is one and a half per cent, per year. Over 25 years, the compound result of that is a large number. My premise of House Bill 1187 is to change the definition of the revenue cap to a five year rolling average of personal income. That raises the excess revenue cap line, and, allows us to keep more revenue that’s naturally being generated by income tax and sales tax.”
What has the impact of TABOR been since 1993?
“The portion of our personal income going to government was 6.2 per cent in 1993. Today it is 4.6 per cent. I think now we are at the point where we are on the edge of going too far. Funding our schools is down. We’ve gone from the low 20’s to the high 40’s in most categories of school funding. Our roads are in bad conditions. Funding of higher education is down. Let’s not throw money at those problems. I don’t think that’s how you solve them. But I think we should quit squeezing them more and more. We have done that for 25 years and we’ve just gone too far over the edge now.”
Would the change in the excess revenue cap definition alleviate state budget crises?
“Yes. It would alleviate that budget crisis in the very first year. The 2017-2018 fiscal budget is the one we are discussing right now. The current deficit between the revenue we’re bringing in versus current law for what we’re supposed to fund is $500 to $600 million. Something is going to have to be cut. My proposal wouldn’t solve the whole thing right now. It would bridge about 130 million of that gap in the first year.”
How would the change affect the taxpayer refunds?
“The refunds will become less. People should realize is that their refund might go from $40 down to $30, to $20, and maybe eventually down to nothing. My contention is that amount of money is small compared to having the state fix the roads or fix higher education.”
If House Bill 17-1187 passes, what is the next step?
“On the ballot this November there will be a question. It will state, ‘Without raising taxes, do you want to change the excess revenue cap from inflation plus population to five year rolling average of personal income?’ All this bill does is send the issue to the voters. If you create a policy, you certainly review that policy more often than every 25 years to see if it’s working or not. It gives them a chance after 25 years to say, ‘Is it working the way we want it to?’ If it is, they can vote no. If they agree to adjust it, then it changes the nature of it. Ultimately, the voters get to decide.”
Catherine Strode is Advocacy Denver’s Communications and Policy Specialist. She holds a Masters degree in Public Administration with an emphasis in Health Care Policy. Catherine publishes Policy Perspective, featuring interviews with state policy makers on issues that affect the work and mission of Advocacy Denver.