Don’t punish taxpayers for economic growth

by | Jan 13, 2015 | Capitol Review

Colorado’s economy has shown remarkable resiliency in the wake of the Great Recession.

Unemployment has steadily fallen from a high of 9.6% in 2010 to an estimated 4.1% in November 2014.

Income indicators roared past pre-recession levels and now both wages and salary and per capita income are significantly higher.

In the past five years, taxes and fees paid by Coloradans to their state government have grown by 43% from $8.5 billion to an estimated $12.3 billion in the current year.

And next year, state revenue could surpass the state’s spending limit for the first time in 15 years, triggering a modest rebate to taxpayers of $116 million or 0.4% of next year’s state budget.

But those in the Government Always Needs More Money Choir just can’t stand this prosperity.  They are howling that that this modest refund – and perhaps future refunds, if the economy continues to grow – are somehow strangling our state government.

Remember, these rebates to taxpayers were approved by voters in the Taxpayers Bill of Rights (TABOR) – the same law that requires a public vote on tax increases.  Politicians and “the spending lobby” had resisted such limits for years.

Thirteen years after TABOR passed, voters approved Referendum C to correct the one obvious flaw in TABOR by allowing state government spending to rebound as the economy recovers from a recession.

By approving Ref C, voters allowed state government to keep and spend an extra $11.6 billion that would have been refunded.  That’s 100 times more than the rebate projected for next year.

So why are some now whining that the state may have to return a little to taxpayers?  Because some politicians and the spending lobby continue to believe that government can spend our money better than we can.

Boulder Democrat and newly-elected Speaker of the House Dickie Lee Hullinghorst said as much:  “People would be far better off if we (government) invested that in infrastructure, education – something that really benefited them rather than getting their 50 bucks back to spend on a tank of gas or something.”

That may be her opinion, but it’s not her money.  The money belongs to taxpayers who earned it.

The liberal Colorado Fiscal Institute claims that TABOR prevents government spending from “benefiting from the recovery.”  The facts say otherwise.

Much of this whining tries to conceal the fact that rapid growth of social welfare spending is taking money away from budget priorities, like educating our kids and providing and maintaining safe roads.

Social welfare spending is growing 10 times faster than spending on education.  In the past five years, general fund spending on social welfare programs (health care and social services) has grown by $1.2 billion while spending on K-12 education grew by just $118 million.

Viewed another way, the disparity is even worse:  in five years, funding for public schools has grown by just 3.6%, but social welfare spending has increased 69% – gobbling up 91% of all general fund spending growth.

Another $2 billion was added to social welfare spending via federal funds funneled through the state budget.  Colorado now spends almost twice as much money on social welfare programs ($9.8 billion) as it spends trying to provide a quality education to our kids ($5.3 billion).

Meanwhile, transportation funding is almost exactly the same as six years ago – despite growth in population and highway miles.

Common sense tells most of us that government needs to shift its priorities, to stop growing social welfare programs at the expense of schools and transportation.

The spending lobby, of course, says that government simply needs more of our money to spend.  That’s why they are once again taking aim at the Taxpayers Bill of Rights.

Fortunately, both Gov. John Hickenlooper, a Democrat, and Senate President Bill Cadman, a Republican, have supported rebates to taxpayers.

However, the spending lobby will relentlessly pressure politicians to spend more, so this battle is far from over.


Coloradans for Common Sense is committed to:

Mark Hillman on Twitter

Follow Button

Quote of the Day

Ask not what your country can do for you — ask what you can do for your country.

— John F. Kennedy

Post Categories