Referendum C timeout timed out; Rebate timeout ends; conservatives rejoice, supporters say initiative helped budget

Peter Marcus
Denver Daily News

Anti-tax advocates yesterday hailed the end of Referendum C, calling the timeout from TABOR rebates a "cowardly" move backed by voters five years ago and pushed by "spending bullies."

Fiscal conservatives gathered at the Capitol yesterday where they celebrated the end of Ref C, a 2005 voter-approved initiative that suspended a tax limit set by the Taxpayer's Bill of Rights for five years to fund health care, public education and transportation projects. The timeout ended June 30th.

Taxpayers missed out on more than $3.6 billion in rebates since 2005 as a result of the initiative, according to figures presented by fiscal conservatives yesterday.

The group celebrated the "return of TABOR," but acknowledged that Ref C has a permanent effect on state government, creating a new TABOR limit based on where state revenues peaked in 2008.

Colorado residents are not expected to see rebates until 2013 when there may be a surplus, according to a legislative budget assessment mentioned yesterday by State Sen. Shawn Mitchell, R-Broomfield.

Those celebrating the end of the timeout yesterday also acknowledged that taxpayers would not have seen any rebate the majority of the years Ref C was in place because there would have been no surplus as a result of the crumbling economy and declining state revenues.

But TABOR supporters believe Colorado lawmakers would have been forced to make difficult budget-cutting decisions sooner rather than later had Ref C never passed.

"Politicians would have had to make tough decisions sooner and a little bit more gradually under TABOR, and we would be exactly where we are now because of the economy," said Jon Caldara, president of the libertarian Independence Institute. "Getting rid of TABOR, putting in place a timeout from TABOR for five years was a coward's way of dealing with a tough budget."

Caldara said he is not bashing voters for having voted for Ref C, but said voters were "fooled" into voting for the initiative by special interest groups, lobbyists and local media.

That being said, voters in 2005 rejected a companion measure, Referendum D, which would have allowed the state to increase its debt limit and repay it over a number of years. TABOR requires a vote of the people to borrow money if more than one year is needed for repayment.

Wade Buchanan, president of the Bell Policy Center, said Ref C comes down to a matter of priorities. He added that for groups like the Independence Institute, funding things like education falls lower on the priority list.

"The benefits from Ref C were significant, all you need to do is look at what it's been like the last few years when we had this economic downturn, and we're basically now where we would have been had Ref C not passed," said Buchanan. "So, their vision is really one of permanent recession, permanently downsizing government, certainly closing community colleges, larger class sizes, the job impacts of not being able to maintain our roads and bridges at the level we need to – really it's just a different world view."

Colorado lawmakers over the last two years alone have had to cut $3.5 billion from the state budget. For the fiscal year that just began, lawmakers have already had to cut $1.3 billion from the budget. A recent economic forecast states that Colorado will need to cut an additional $61 million.

Buchanan and supporters point out that the situation has been so dire for education funding that lawmakers this year had to approve legislation allowing higher education governing boards to raise tuition beyond 9 percent per year.

Supporters say had it not been for Ref C, the situation would be even worse.

Hundreds of millions of dollars went to fund education and health care, according to Buchanan, though the majority of the funds went to transportation funding.

Colorado will have $750 million more in the current fiscal year because of Ref C, according to an analysis by the Bell Policy Center.

Supporters also point out that Ref C enjoyed bipartisan support, including from then-Gov. Bill Owens, a Republican.

"Avoiding that level of additional cuts may be bad news for the anti-government crowd," said Buchanan. "But it's finally a little bit of good news for Colorado businesses and families. It's good news for our economy and our quality of life."

But for Amy Oliver Cooke, a conservative mother who founded Mothers Against Debt and works with the Independence Institute, she would have rather seen a rebate that could have been used by her family instead of $3.6 billion in additional spending. She says that would have broken down to $740 for every man, woman and child in Colorado – or about $3,700 for her family of five.

"That's $3,700 that I could have used to help pay college tuition, put food on the table, pay a mortgage, clothe my kids – that's what it meant to working families," said Cooke. "Every parent in Colorado ought to be welcoming back the Taxpayer's Bill of Rights. We should be having a ticker-tape parade. We should be more than just celebrating."