WESTERN SKIES - May 21, 2005

*** TABOR AT HOME AND AWAY ***

ERIC WHITNEY: In 1992, Colorado voters approved the Taxpayer's Bill of Rights, or TABOR, which is widely regarded as the most restrictive government revenue and spending limit in the country. The major news at the legislature this year was a compromise to ask voters to relax TABOR revenue limits so that state government can take in more money. But, as Western Skies' Stephen Raher reports, many other states are considering adopting TABOR-like measures at the same time that the law is under attack in its home state.

STEPHEN RAHER: According to Stateline-dot-org, seventeen states are considering revenue and spending limits, based on Colorado's Taxpayer's Bill of Rights. But even as politicians from Maine to California are discussing Colorado's thirteen years under TABOR; Colorado is busy with it's own debate on whether the law has been good for our state budget.

PRESIDING OFFICER (STATE SENATE): Will the clerk please read the title of House Bill 1194.

READING CLERK: House Bill 1194, concerning adjustments to state revenue [fade under]

RAHER: During this year's session of the state legislature, lawmakers passed House Bill 1194, which will appear on November's ballot as Referendum C. The measure asks voters to lift TABOR limits on government revenue for five years, giving the budget a chance to get back to where it was before the recession. Despite bi-partisan support for Referendum C in the legislature, some Republicans were unwavering in their stake that TABOR should not be changed. Representative Keith King is a Republican from Colorado Springs.

REP. KEITH KING: I exercise about three times a week. This morning I was at Carmody's and I talked to Jerry, the guy who's in charge of that facility this morning and I said "Well we're gonna discuss the budget today." And his comment to me was, he says, "Well what ever you do make sure I can still get a TABOR refund."

RAHER: As an ardent supporter of TABOR, it's not surprising that King pointed to the refund checks that have become quite popular with taxpayers. These refunds occur in years when the government receives more tax money than it is allowed to keep under the TABOR limit.

The other part of TABOR which has proven to be immensely popular is the requirement that any new taxes, or tax increases, must be approved by voters. Opinion polls have shown three of every four Coloradans believe the power to approve new taxes should rest with the people.

The part of TABOR that has come under the most criticism is the so-called "ratchet effect," which occurred during the recent recession. When government revenue dropped dramatically during the economic downturn, the TABOR limit was lowered. Even though the economy is now improving, the TABOR limit can't jump back to where it was before the recession.

Allan Wallis is a professor of public policy at the University of Colorado. He says the more people learn about the TABOR ratchet, the greater the chance Referendum C might pass.

ALLAN WALLIS: I think that people are quite happy, when times are good, to receive a refund. When times are poor, the idea that they can't be taxed to make up the difference also seems equitable. My guess is that what does not strike the voters today as equitable is the idea that when times get good again, in other words when states' private economy turns around, the private economy cannot move with it.

RAHER: But TABOR's author, and tax cutting activist, Douglas Bruce, takes issue with the way politicians talk about the budget.

DOUGLAS BRUCE: Referendum C, proposed by Representative Romanoff (I've coined the phrase "the Romanoff rip-off") that's what it is, it's an attempt to lie, cheat, and steal and get an unlimited amount of money in the next five years.

RAHER: Bruce, who is now an El Paso County Commissioner, stands by TABOR, saying the government has plenty of money to do what it needs to.

BRUCE: There have been no cuts. This is a big lie worthy of Nazi Germany, saying over and over and over again using the liberal media outlets that there have been cuts, deficits, shortfalls, that there's a crisis. It's all untrue. Every year the total state spending is up hundreds of millions the prior year.

RAHER: But while Bruce talks about total state spending, others say the devil is in the details. Total state spending includes federal funds and certain fees that come with restrictions. Plus, over forty percent of the state general fund goes to K-12 education, which cannot be cut due to a constitutional amendment passed by voters in 2000. Combine this with Medicaid spending, which is subject to strict federal requirements, and the majority of the budget can't be tinkered with.

SEN. RON TECK: It's real easy, when you're on the outside, to say that we need to do some of these things, but when you get into the intricacies of the thing, you discover how difficult it is.

RAHER: Ron Teck, a Republican legislator from Grand Junction, used to sit on the powerful Joint Budget Committee.

TECK: I would like to point out that ninety--approximately ninety-six percent--of our budget is case driven, it has to do with the people who need and demand the services. If you want to reduce state funding, there is only one way to do it significantly, and that is to eliminate programs.

RAHER: Programs have been eliminated or dramatically cut during the past four budget years. The bulk of such cuts have been borne by two state departments: higher education and human services.

[sound of talking and intercom loudspeaker]

RAHER: On a Thursday afternoon, the Memorial Hospital emergency room in Colorado Springs is seeing a steady flow of patients. This particular ER is the fourth busiest in the nation. Like most emergency departments, it isn't well-equipped to handle patients with chronic mental illness. But, due to repeated state budget cuts in mental health services, many of the mentally ill end up in ERs, driving up costs for the hospitals and raising rates for people with insurance.

NOLA: They're trying to balance the budget, and they're trying to cut where cuts can be made, but for those people on Medicaid [fade under]

RAHER: Nola, who prefers not to use her last name, knows about the mental health system. Her adult son is diagnosed with paranoid schizophrenia. Nola is a trained psychiatric nurse, so she was able to get help for her son, but eventually the budget cuts took their toll.

NOLA: My son was going by a van that the mental health center owned to his therapy. One of the budget cuts was that the van service was discontinued. So a lot of these chronically mentally ill in the community had no access to the health center anymore. Now you can take the city bus, but you don't have a lot of money. And sometimes these people aren't organized to learn the bus schedule and get where they need to be. But some of those things went away. Another thing that went away was his group. They stopped doing his group.

RAHER: Community-based mental health centers have lost so much funding, that people who aren't covered by Medicaid or private insurance often can't receive services unless they've reached a crisis point. It's stories like Nola's that bolstered public support for changing TABOR.

It's hard to tell yet whether supporters of TABOR-like amendments in other states will be impacted by Colorado's Referendum C. The University of Colorado's Allan Wallis, for one, is surprised by the number of eastern states that are considering such measures.

WALLIS: A lot more of the restrictive tax and expenditure limits have really been most solid in the western state. There may be a regional biases in the west. The west consists of states that tend to have stronger traditions of home rule, suspicion about centralized governments.

RAHER: Some of the states that have already drafted TABOR-like amendments have made noticeable changes, such as allowing the legislature to suspend the restrictions under certain circumstances. But as far as TABOR author Douglas Bruce is concerned, taxpayers are better off when elected officials have less power.

BRUCE: They're just spendthrifts who will spend every dollar they can get their hands on. The politicians have cheated and violated TABOR dozens and dozens of times. They are just never satisfied no matter how much they rip us off for.

RAHER: But perhaps the most telling accomplishment of TABOR is that the decision on whether or not to ease the limits rests not with Mr. Bruce, or the legislature, but with the ordinary voters who go to the polls in November.

For Western Skies, I'm Stephen Raher.