Vail Valley Voices: What to make of ‘Ugly 3’?
Vail, CO, Colorado
The debate over ballot measures 60, 61 and 101 has been anything but illuminating.
According to the propaganda, voters should:
n Vote yes to punish government at all levels for more than $1 billion in higher taxes and fees enacted without a vote of the people by Gov. Ritter and statehouse Democrats.
n Vote no because “The Ugly 3” will trigger a “voter-approved recession” and put thousands of people out of work.
Frankly, both of those arguments are overwrought. All three measures offer some policy changes that voters should like, offset by a monkey-wrench provision that makes each measure hard to swallow.
Amendment 60 would allow citizens to petition any local government to reduce property taxes and require those elections to be held in November, not on some obscure date when few people vote.
Then Amendment 60 adds a nonsensical provision to cut local property taxes that support local schools by 50 percent and, in the next breath, requires the state to magically to reimburse local schools for the lost funds.
K-12 education already consumes 45 percent ($3.1 billion) of the state general fund budget, accounting for 62 percent of local schools’ operating costs. Local property owners pay the balance, another $2 billion, directly to their own school district.
The state simply doesn’t have that extra $1 billion hidden in a desk drawer. Moreover, the $1 billion price tag would be larger than the total general fund spending on any other department, except health care.
Amendment 61 would prohibit the state from borrowing money for any reason, even with voter approval. Currently, the state is prohibited from borrowing against general tax revenues, but may, with voter approval, issue bonds to be repaid from a specific source such as a special tax approved by voters. Local governments and school districts could take on voter-approved debt only if it were financed for 10 years or less.
For anyone who believes government should operate like a business, this mandates just the opposite. Imagine if a business couldn’t open a new store unless it could pay cash for the entire cost.
If home mortgage contracts were limited to 10 years, monthly payments would double. Interest savings are exaggerated because interest is simply the price paid to use a lender’s money while immediately benefiting from the purchase.
Amendment 61 would also pointlessly terminate the state treasury’s interest-free loan program that helps local school districts alleviate temporary cash flow shortages. State government has its problems, but this program isn’t one of them.
For those of us who believe the Taxpayers Bill of Rights (TABOR) is generally good policy, it’s also alarming that 60 and 61 are amendments to TABOR. Saddling TABOR with these peculiarities is like hitching a plow to Secretariat.
If Proposition 101 merely repealed the Democrats’ vehicle “fee” increase ($165 million in 2010-11) or backdoor property tax increase ($155 million), that would be worth supporting. But Prop 101 goes much farther, indiscriminately whacking taxes and fees by $744 million in the first year and triple that over time.
For comparison, state income and sales taxes generate about $7 billion a year; add all other revenues covered by TABOR and the total is $9.3 billion. So, Prop 101 would mandate in the very first year an 8 percent reduction – in a budget already squeezed by the recession.
Want evidence that the state budget is relatively lean? Consider that even with the Democrats’ fee and tax hikes, spending under TABOR actually fell by $600 million last year. From 2001 to 2010, state-level spending fell from $2,237 per capita to $2,211, adjusted for inflation. Since TABOR passed in 1992, Colorado’s tax burden has fallen from 23rd highest to 34th.
The best response to backdoor tax hikes passed by Democrats lawmakers and approved by liberals on the Supreme Court is to vote them out of office — not to throw three sticks of dynamite into state and local government.
Republican Mark Hillman served as Colorado state treasurer and senate majority leader. To read more or comment, go to http://www.MarkHillman.com.