Tax and Spending Limits: Theory, Analysis, and Polic
Tax and spending limits (TELs) are budgetary rules that determine how much taxes and/or expenditures can increase from one year to the next. TELs can be statutory or constitutional rules. Statutory TELs can be modified by legislative action, while constitutional TELs can only be modified by a majority vote of citizens. TELs may originate through a legislative statute or referendum, or they may be initiated by citizens in states that provide for this form of direct democracy. TELs are now in place in 26 states.
Fiscal Crises in Colorado
In Colorado we are experiencing the worst fiscal crises in the last half century. In this study we document the magnitude of the fiscal crises, comparing the revenue shortfall in
this recession with that in previous recessions. We then explore the reasons for the greater severity of the current fiscal crises in Colorado compared to prior fiscal crises.
The next sections discuss how our fiscal policies and fiscal rules of the game have contributed to the severity of the fiscal crises. We conclude with a discussion of the need
for reforms in our fiscal policies and fiscal rules to better achieve budget stability.
Learning to Live Within Colorado’s Tax and Spending Limits
The Colorado Commission on Taxation has just completed a survey of Colorado citizen attitudes toward the tax system. This is an important survey because it reflects the views
of ordinary citizens rather than that of politicians or special interest groups. It reveals some hostility to taxes and a low trust in the efficiency of government. This skepticism
toward taxes and government efficiency is directly related to the size of government; citizens have more confidence in local government, less confidence in state government,
and least confidence in our federal government.
Amendment 23: A Critique
The question asked in Amendment 23 is a very simple one: should the state raise taxes $11 billion? That is not, of course, how the proposed amendment to the Colorado Constitution is presented by the teachers’ unions, but that is in fact what they are asking Colorado citizens to do. Since the teachers unions have obfuscated the issue, it is important to begin by showing how the proposed amendment would create this $11 billion fund which would mostly benefit the teachers’ union.
Back To Basics For Tax Reform In Colorado
It is difficult to explain the 60 odd tax bills before the Colorado Legislature this year. Every interest group in the state seems to be clamoring for tax refunds, tax cuts, or expenditures of surplus revenue to benefit their interest group. If the legislature responds to these special interests this year, as they did last year, we will end up with more loopholes and more complexity in our tax system. We seem to have forgotten the lessons learned from the tax reforms launched by the Reagan revolution, and it is time for Colorado legislators to return to these basic principles of tax reform. I will discuss first the principles that should guide tax reform in Colorado, and then some of the proposed tax bills.
TABOR Comparison Data and Projections: Appendices A, B, C, D
APPENDIX A: PDF of full Appendix A Scribd version of full Appendix A State of Colorado Growth Comparison, Two Ten-Year Periods: Pre-TABOR (1983-1992) and TABOR (1993-2002), in Employment (All, Government, Non-Government); TOTAL STATE Revenues and State Outlays; Per-Capita Personal Income, Revenues & outlays; Gross State Product, Unemployment, population and Inflation. APPENDIX B PDF of full […]
Surplus Expenditures in Colorado
This issue paper examines the disposition of surplus revenue in Colorado. The evidence reveals that special interests now determine the disposition of most of the surplus revenue. The result is less efficient and equitable budgetary decisions than would have been made in the absence of surplus revenue.
Solving Colorado’s Educational Finance Problem
The issue of public school finance is central to the debate over tax reform in Colorado. Several bills have been introduced in the Colorado Legislature that would significantly change the way in which Colorado finances our public schools. These bills call for replacing the property tax with a state income or sales tax as the major source of funding for the public schools.
The One Percent Solution: How to Start Reducing the National Debt
This Independence Institute Paper describes how the Republicans’ proposed 3% Solution and the Issue Paper’s proposed Citizen 1% Solution would provide an annual budget surplus to be used for reducing the public debt. The latter will balance the budget in 1998 and reduce today’s $4.7 trillion public debt back to 1981’s $1 trillion level by 2007.
