School Finance in Focus: The "Taxpayers' Bill of Rights." (TABOR)

TABOR stands for “Taxpayers’ Bill of Rights.” First enacted in Colorado in 1992, TABOR represents the most restrictive tax and expenditure limitation in the country.

TABOR is a constitutional measure. In order to enact TABOR in Kansas, a resolution would need to be approved by a two-thirds majority of both houses of the legislature. Such a resolution has been introduced – HCR 5015. The measure would then be put to a statewide vote at either the general election or a special election. Unlike other legislation, the approval of the governor is not necessary for constitutional amendments.

TABOR limits revenue growth for state and local governments to the percentage of growth in population plus the inflation rate. If the current tax structure generates revenues in excess of the limit, the excess revenues are placed into a “budget stabilization,” or rainy day fund, up to a constitutionally prescribed amount and any excess after that is refunded to the taxpayers.

What is so bad about stopping legislators from increasing spending more than the inflation rate?

The most fundamental TABOR flaw is that the Consumer Price Index (CPI), which is the inflation measure of choice, does not capture the growth in the cost of the kinds of services purchased in the public sector. The CPI is based on consumer goods while most state spending goes to personnel, technology, and healthcare costs. Cost increases in all of these areas exceed the CPI.

But it gets worse!

TABOR does not provide any flexibility for government to address unforeseen costs such as those attributable to natural disasters, diseases, and advances in infrastructure. For example, when TABOR was first enacted in Colorado, West Nile virus was not known to North America. Twelve years later, Colorado led the nation in West Nile deaths but could provide no funding to local health agencies to address the threat.

TABOR alters the democratic process. When the state constitution predetermines the level of spending for the year, there is no role for elected officials in either the tax or budget process. Under TABOR, regardless of the urgency of the need for funding elected officials are given few choices. They may either cut funding for another worthwhile service or maintain the status quo.

TABOR does not take into consideration an increasing need for services based on demographics. For example, TABOR does not recognize the aging of the baby-boomers and the resulting increase in demand for services such as Medicaid, which requires a state funding match.

TABOR does not allow for investments in people or technology that require significant costs at the onset but may actually decrease government costs over time. For example, quality early care experiences for children, particularly low-income children, result in economic returns that exceed initial cost.

Has TABOR had in impact in Colorado?

The voters of Colorado passed TABOR in 1992. Under Colorado TABOR, voter approval must be given for any new tax, tax rate increase, debt increase, property tax mill levy increase, or any tax policy change that will result in a net revenue gain.

Before TABOR, Colorado generally enjoyed a status near the middle of the pack in terms of national rankings reflecting the quality of services available. However, in many current rankings, Colorado fares much worse. One of the most dramatic examples of this is the ranking of 50th in the nation in childhood immunizations as of 2003. This is in a state where the average household median income of $50,224 is higher than that of households in 37 states.

The following table illustrates the changes in Colorado rankings among the 50 states in the decade since TABOR’s implementation.

*Measure*	*1993*	*Current*

Health insurance coverage	21st	36th (02-03)
Childhood immunization	27th (94)	50th (03)
Timely prenatal care	21st (90)	41st (02)
Low-birth-weight babies	42nd	40th (02)
Infant mortality	19th	11th (00-01)
Child death rate	16th	21st (01)
Teen birth rate	30th	36th (02)
K-12 spending per pupil	28th	33rd (01)
K-12 spending relative to income	35th	48th (01)
Per capita higher education appropriations	31st	47th (04)
Percent of teens who are high school dropouts	31st	48th (01)
Idle teens (% neither working nor in school)	13th	32nd (01)

*Morgan Quitno Ratings:*
"Most Livable State"	8th	22nd (04)
"Healthiest State"	9th	27th (04)

Note: This table was prepared by the Wisconsin Budget Project. For all of the measures, a lower number indicates a higher ranking. The data come from many sources, including the KIDS COUNT Data Books, Census Bureau, CDC, Morgan Quitno, and Kaiser Family Foundation.

Can Kansas afford TABOR?

As is the case in many states, Kansas has experienced a series of lean years during the recent economic downturn. Budgets have been tightened and new funding has been put off until better times. Kansas can ill afford to restrict revenues now. It is clear that TABOR is not in the best interest of Kansas and can only be detrimental to the quality of life Kansas children and their families enjoy.