Experts debate benefit of Taxpayer Bill of Rights

BANGOR – A former Colorado state senator spread a message Thursday in Maine that he and others hope will take root by Election Day: A Taxpayer Bill of Rights has been good for his state and can be good for Maine, too.

But John Andrews’ opinion on the topic was not the only one being disseminated Thursday. A few hours earlier, the Washington-based Center on Budget and Policy Priorities released a report and held a press conference indicating that adoption of a similar measure in Maine would be bad for the state and its residents.

Andrews, a former state legislator who now works for the conservative California-based Claremont Institute, said that Colorado’s tax-limiting constitutional amendment, also known as TABOR, helped the state’s economy flourish in the 1990s.

“Back in the mid-1980s, Colorado’s economy was sluggish,” Andrews said. “Spending was out of control in the state.”

Spurred by tax-limiting citizen initiatives elsewhere in the country, he said, Colorado in 1992 adopted a “reasonable” limit that prevented local and state spending from increasing faster than the population growth rate plus inflation.

As a result, Colorado’s private sector growth, after having lagged previously, has expanded 14 percent faster than the growth of government, Andrews said. Colorado’s per capita gross state product has grown faster than every other state except Delaware.

“This is good evidence of my state being a desirable place to live and not just that but a place to make a living,” Andrews said.

The initiative in Maine, which is scheduled to go before voters this fall in a referendum vote, would affect spending by the state, counties, municipalities and school districts. Voter approval would be required for any tax or fee increases and 80 percent of all excess revenues would have to be refunded to taxpayers.

During a conference call earlier Thursday, Nick Johnson of the Washington-based Center on Budget and Policy Priorities said Colorado’s economic success during the 1990s largely was due to factors other than TABOR. He said Colorado had been positioned to benefit from growth in the technology sector by earlier state investment in higher education and by federal investment in defense facilities.

“Colorado was growing faster than other states before it enacted TABOR” because of these investments, he said. “TABOR has failed to strengthen Colorado’s economy.”

Andrews dismissed this argument, however. He said it was disingenuous to suggest that a favorable tax code in Colorado played no role in the state’s economic growth.

“Colorado must be doing something right,” Andrews said.

Therese McGuire, a Northwestern University professor who co-wrote a report released Thursday by the Economic Policy Institute, said Colorado’s economic growth improved from just over 1 percent to slightly more than 2 percent after voters there approved TABOR in 1992.

She said she and report co-author Kim Rueben, a senior research associate at the Tax Policy Center, studied whether the growth in Colorado’s economy was caused by TABOR. She said they ran various models that looked into specific factors such as employment and per-capita income to see if TABOR was responsible. They came up empty each time.

“We find zero effect,” she said. “There’s no validity to such an argument.”

Instead, TABOR has an increasingly severe effect on municipal and state budgets to the point that basic services and investment in public resources suffer, she said.

Andrews acknowledged that last year Colorado voters suspended part of TABOR to allow for more investment of state revenue into certain programs, but he attributed the move to collapse of the technology sector boom and to the severe effects of the 2001 recession. He said Maine’s version of the initiative, unlike Colorado’s, would allow for more substantial emergency reserve funding in case its revenues suddenly plummet as they did in Colorado.

“We went off this cliff and lost 17 percent of our revenues in 18 months,” Andrews said.

It was Colorado’s economy that negatively affected tax revenues, he said.

“TABOR didn’t do that.”