Time to rework state tax structure | VailDaily.com

Time to rework state tax structure

Steve Pope

Have you heard the story of the ant and the grasshopper? Of course you have. The ant works diligently all summer storing food away for the future, while the grasshopper flits around with no concern for tomorrow. The ant understands that today’s investment makes the future better. The grasshopper only wants to maximize the pleasure of the day.

In Colorado we are acting more like the grasshopper than the ant. With the implementation of the Gallagher amendment, TABOR, and the Arveschoug-Bird legislation, we have collectively decided to take small individual tax savings each year to spend on daily pleasures.

After seeing our children’s education suffer from our shortsightedness we have tried to Band-Aid the situation with the Amendment 23-mandated educational spending increases.

We are left with an irrational combination of amendments and laws that still shortchange the pre-college educational future of our children and add even more serious pressures to our well-respected state universities. We taking short-term pleasures and letting the economic future of our state deteriorate as a result of our short range thinking.

Skeptical? Did you know that Colorado ranks 40th nationwide in terms of tax burden. At a combined tax load of 9.1 percent (including income, property and other state and local taxes), we are just below Oklahoma, about equal to Alabama and slightly above South Dakota” Fortieth, you say? Well that sounds pretty good. At least it sounds good until you figure out what the low rate is costing us.

Remember those states that are right around us in terms of tax burden? I can not remember seeing the names of those states tied to progressive thinking about their economic future. They are not usually included in the list of states that pin their economic future to high-tech growth and with the exception of South Dakota are not high on the list of well-educated work forces.

Colorado, on the other hand, has been at the forefront of clean, high-tech business growth in large part due to our well-educated citizens. While it is true that a large part of our “well educated” population immigrated from California and other areas, we still have to ask how long Colorado can compete without good public education.

What Colorado’s current irrational combination of TABOR limits and mandated spending is costing us is the ability to keep our state’s economy growing in the future. More correctly, it is costing us our children’s and grandchildren’s economic future.

It is result of well-meaning but seriously misguided attempts to limit inflation in governmental spending. The controls have backfired to the point where our public schools, even with the extra funds provided by Amendment 23, are not able to provide the level of education our children and our future deserve.

Still skeptical? Did you know that the controls are so seriously flawed that our public universities are threatened with closing their doors or of converting to private institutions in order to stay in existence? Did you know that public school systems all across our state have to limit the quality of education they provide to our children due to the inability to raise property tax levels to match cost increases or even to catch back up with the ground lost between the time the Gallagher Amendment was passed in 1982 and the approval of Amendment 23 in 2001? Did you know the ill-conceived lawsuit that Michael Cacioppo has pressed on our local school system is based in part upon the illogical limitations of TABOR?

The dire impact of the situation can be illustrated by a look at our state’s well respected public university system. We are starving these schools out of existence!

Projected general funding of CU and our other state universities is projected to drop from $686 million in 2003 to $83 million in 2009. Population will grow. More of our children will want to attend these schools. How will this be possible if general fund support from the state is only 12 percent in 2009 of what it is today?

The answer is that it is not possible. The universities either will not exist or you as parents will be paying private institution tuition levels.

Did you know that your average tax burden has declined almost 10 percent over the last 30 years? Back in the 1970s and 1980s, Colorado citizens had a state tax burden that was slightly above the average for the United States as a whole. In 1970, our state tax burden was 10.0 percent, compared to the U.S. average of 9.8 percent. In 1990, Colorado’s average was 10.1 percent, compared to the national average of 10.3 percent. All in all, we were about average.

But we were grasshoppers and passed TABOR. By 2004, the tax load for Colorado citizens has dropped to 9.1 percent, while the national average is still around 10 percent. And our state finances are a mess. With the business-residence property tax splits mandated by the Gallagher Amendment, the TABOR limits on spending, the Arveschoug-Bird limits on general appropriations, and mandated increases from Amendment 23, we are gradually starving our future.

There is no such thing as a free lunch – even for grasshoppers. Those little dribs and drabs of tax savings that each of us get and spend are paid for in terms of reduced services, and more importantly, in terms of reduced education for our children. They are also paid for in other reduced services as discretionary amounts in the general fund are eaten up by mandated increases. Like the grasshopper, we are selling our future for small pleasures today.

It is ironic that TABOR was billed as a taxpayers’ bill of rights. In hindsight, all it gave us the right to do was to sell out our future. We need to wake up! We need to act like the ant, not the grasshopper. Call your state legislator and tell him or her that we need to fix the situation this year. We need to fix the conflict between TABOR and mandated spending programs. We need to find a way to make reasonable reinvestments in our states future.

If our legislators can’t get the answer by tomorrow, Gov.Owens needs to keep them in the State House until they do come up with an answer. It is too important an issue to put off until next year.

Better yet, let’s start a drive to replace TABOR with a system that indexes our state tax burden to the average of entire United States. We don’t need to be greedy. The average would be just fine.

Our children’s education at all levels is our economic future. We need to ensure that it is funded at a level sufficient to insure the quality and access they deserve.

Make a call to your legislator today. Make sure our representatives know we are worried about the future and that we are paying attention to their actions. Be an ant – not a grasshopper.

Publisher Steve Pope can be reached at 949-0555, ext. 300, or publisher@vaildaily.com

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