Economy, Elections, Linda Gorman, Sherrie Peif, TABOR, Taxes, Uncategorized

TABOR bill sponsor responds to constituents and bows out; says he will vote against changes

DENVER – One of three Republican sponsors on a bill that would change the way revenue is capped under the Taxpayers Bill of Rights (TABOR) has had a change of heart.

Despite the fact supporting TABOR is one of the many issues that normally binds conservatives, Representatives Phil Covarrubias, (R-Adams/Arapahoe), Dan Thurlow (R-Mesa) and Lois Landgraf, (R-El Paso) all originally advocated for a change to the 25-year-old constitutional amendment that restricts tax increases without a vote of the people and caps state revenue.

Covarrubias, however, said he took enough backlash for his role in it that he announced via social media that he was pulling his name from the sponsorship of HB17-1187.

“In case you have not heard: per the request of my constituents, I have decided to take my name off HB 1187 and will be voting against it,” Covarrubias said on his Twitter feed.

The Tweet came as welcome news to many fellow Republicans who immediately retweeted the announcement with words of gratitude.

Senate Bill 1187 would ask voters in November to change the revenue cap from one that is based on percentage increase in state population plus the rate of inflation to one that is based on Colorado personal income growth over a rolling calendar of the previous six years.

The bill passed third and final reading Friday and now moves to the Senate, where Republicans hold a one-vote majority. It is expected to be heavily debated again.

Opponents say the current formula takes into consideration that a larger population requires more government services while proponents argue the current formula is outdated.

Rep. Thurlow, the bill’s prime sponsor, says that rather than reimburse taxpayers revenue already collected, the cap formula should be tweaked to allow the state to retain a larger portion, which could then be spent where there are current shortfalls.

“Since 1992 when TABOR started, the government’s measurement of inflation has changed drastically,” Thurlow said …” It is no longer the right measurement. I think inflation never measures the actual growth of our economy.”

Thurlow added the things inflation measures are not the things government buys.

“So it seems to me it’s time to go back and ask the voters if they want to revisit that measurement,” Thurlow said. “And keep intact all the other elements of TABOR. It keeps a lid on the growth of government, and it retains the ability of people to vote on tax increases or tax policy changes.”

The effect would decrease any likelihood for future refunds to tax payers. TABOR refunds are being issued this year through income tax filings and are projected to be issued for the next two years, with excesses of revenue expected in the amounts of $133 million for 2017-18 fiscal year and $209 million for the 2018-19 fiscal year.

Opponents to the bill say this change has several problems.

Linda Gorman, an economist with the Independence Institute,* said in a recent blog on the bill that personal income according to this definition is not what you report to the IRS.

“It is an estimate of an accounting category in the US National Income and Product Accounts,” Gorman wrote. “Personal Income measures how much people work, save, and invest. It does not measure how much it costs to run state government. If someone in Colorado puts in overtime at his job, state tax revenues and average Personal Income rise. The cost of providing existing government services remains the same. Why should the state get to spend more simply because someone works harder?”

Van Winkle called it unconstitutional, argued that people don’t need their taxes raised, and said the current model makes complete sense.

“Inflation plus population is written into the constitution,” Van Winkle said. “Remember we pass bills to tell people how to behave within guardrails. You can’t go over the speed limit … things like that. The people of Colorado tell us in the legislature how we should behave within guardrails of the constitution. … The substance of the proposal is, in the end, bad policy. The premise of the bill is that government can’t grow fast enough. That the taxpayers aren’t giving us enough.”

Landgraf said she believes in the bill for many reasons.

“We need to do something,” Landgraf said. “If you think we’re in trouble now … we wouldn’t have any of the things we have now if we hadn’t passed Referendum C. And I firmly believe if we do not pass this, we’re going to continue this trend and be in even more trouble.”

Referendum C permitted the state to spend the money it collected over its TABOR limit for five years on health care, public education, transportation projects, and local fire and police pensions.

Landgraf said representatives should put their trust in the people they represent.

“I believe the people who live in my district,” she said. “And I’m sure the people who live in every one of your districts are smart enough to look at this proposal and make their own decision as to whether they support it or they don’t.”

But Van Winkle said the current formula is logical and does not need change.

“It allows for last year’s population growth plus inflation. Think about that,” he said. “How many people are demanding government services? That allows us to increase by population. How much more money does it cost to provide those services. That’s inflation. It’s perfectly reasonable and fair.”

* Complete Colorado is a project of the Independence Institute.

 

 

 

 

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