Beware of TABOR

During my recent trip to Maine I was encouraged by the vigorous public debate about the Taxpayer Bill of Rights. This issue, unfortunately, did not get similar scrutiny in Colorado in 1992 when it slipped under the radar screen and passed by a very slim margin. Back then sound bites glossed over TABOR’s complicated and critical details that were not understood until years later.

In Maine, people are asking the tough questions about the fine print.

Many of my conversations with Maine legislators, business leaders, teachers and senior citizens included questions about how TABOR, if enacted, would affect their state’s economy. Understandably, there is some confusion when examining the economy of Colorado – the only state in the nation with a TABOR law.

This confusion stems from the fact that TABOR proponents are trying to convince Mainers that TABOR is the reason that the Rocky Mountain State experienced growth during some of the years since the law was enacted.

The truth is that Colorado experienced several decades of strong economic growth long before TABOR was enacted. Starting in the 1950s, Colorado has consistently performed better than the nation in terms of growth in jobs, personal income and population.

A recent analysis by the Federal Reserve Bank of Kansas City found that major military investments during World War II and Cold War eras sparked this trend – providing the state with a strong infrastructure of high-tech firms and researchers, a young, highly educated work force and public universities with well-respected science and technology programs. By 1989, advanced technology sectors were employing 102,000 workers, compared with 39,000 only a decade earlier; 40 out of every 1,000 Colorado workers were directly employed in high-tech industries. By 1991, more adults in Colorado had completed at least four years of college than in any other state in the nation.

Furthermore, if TABOR deserved all the credit for Colorado’s economic growth, then Colorado would have experienced a unique boom since the law’s passage. Yet several of Colorado’s neighboring states experienced similar and sometimes greater growth during this same time period. Nevada’s average annual job growth in the post-TABOR years has been almost twice that of Colorado’s. Arizona, Idaho and Utah also have had higher job growth than Colorado. Personal income growth has also been higher in Arizona and Nevada than in Colorado.

So yes, our economy has been growing. But it has done so in spite of TABOR not because of it. In fact, most of our growth in the past 14 years occurred in the 1990s, when the entire nation was doing well. But when the recession of 2001 hit Colorado, TABOR exacerbated its impact and made it much harder for us to recover. We were forced to make even more drastic cuts in priority services and our economy languished as a result.

Recognizing that TABOR stood in the way of economic recovery, Colorado’s business community led a successful effort last year to set aside the restrictive formula in TABOR (Referendum C). Chambers of Commerce, economic development directors and CEOs understood that our underfunded universities, deteriorating roads, poorly funded schools and inadequate public health system were making it increasingly difficult to attract and retain good jobs.

According to a June 30 Denver Post article, “The past five years have been difficult ones for the Colorado economy, but [there has been] a resurgence of business confidence following passage of Referendum C last fall.” And Joe Blake, president of the Denver Metro Chamber of Commerce, announced that, “We saw a spike of activity of out-of-state businesses interested in relocating here when Referendum C passed.”

TABOR did not strengthen Colorado’s economy and it won’t strengthen Maine’s economy. Arguing otherwise does not conform to the facts.

Steve Johnson is the assistant minority leader of the Colorado State Senate.