Re: “Scary California stories aren’t true,” Sept. 20 guest commentary.
In his guest commentary, Matt Sundeen challenged my view that Colorado will go the way of California. Our tax and spending limits are the most effective constraints on the growth of government in the country. Those tax and spending limits are under attack in Colorado, just as they were in California. Do we really want to follow California’s disastrous abandonment of fiscal discipline?
The Golden State’s GANN Amendment, a precursor of TABOR, limited the growth of state revenue and spending to the sum of inflation and population growth. In the late 1980s, the California legislature abandoned the GANN Amendment.
As a result, state spending in California increased more rapidly than personal income and taxes were increased to one of the highest levels in the country. Business investment and jobs left the state for other states with better tax climates.
In 1992, Colorado voters passed TABOR. It also limits the rate of growth of state revenue and spending to the sum of inflation and population growth.
The TABOR Amendment has worked much the way it was intended, allowing Colorado citizens to decide how much government they want and are willing to pay for.
Critics often incorrectly argue that TABOR forced the state to cut spending. But the reality is that from 1993 to 2007 real per capita state spending grew 28 percent, while per capita GDP grew 30 percent.
With an effective tax and spending limit in place, Colorado has been able to lower tax burdens, creating one of the best business tax climates in the country. Over the period since TABOR was passed, Colorado has experienced one of the highest rates of economic growth in the nation, while California has experienced retardation in economic growth.
States that impose an effective tax and spending limit create a better business tax climate compared to states that pursue profligate fiscal policies, such as California. Critics who argue that state spending should not be constrained by tax and spending limits are really arguing that government should grow more rapidly than the private sector.
Politicians and special-interest groups routinely attack TABOR because it doesn’t give them carte blanche authority to tax and spend. In Colorado, we are fortunate to have our TABOR amendment. It strengthens fiscal rules and policies conducive to economic growth and prosperity, and prevents the kind of fiscal debacle occurring in California.
This article originally appeared in the Denver Post, October 9th, 2009.