I’ve referred to Colorado’s spending cap as a “role model” and the “gold standard,” and I lavished even more praise on the Taxpayer Bill of Rights in this clip from a recent interview with Penn Pfiffner of the TABOR Foundation.
If you don’t have a couple of minutes to watch the video, all you need to know is that balanced budget requirements are mostly ineffective.
Or, if you want to be pessimistic, such rules actually give politicians an excuse to raise taxes.
What makes TABOR so successful is that it is designed to control the variable that really matters, which is the growth of government.
TABOR basically tells politicians they can increase spending every year, but no faster than population plus inflation.
Has it worked perfectly? Of course not. But it has returned more than $8 billion to the taxpayers of Colorado.
And Colorado definitely has out-performed other states economically, as measured by the growth of per-capita income.
This is the approach we need in Washington. Heck, even international bureaucracies have acknowledged that spending caps are the only effective fiscal rule.
It is also worth noting that the German government recently endorsed that approach for Europe, which is a positive development since the European Union’s anti-deficit rules obviously have not been effective.
So I’ll be very curious to see whether any 2024 presidential candidates decide to embrace this approach (whether they are sincere is a different issue, needless to say).
P.S. The international version of TABOR is the Swiss Debt Brake.
P.P.S. I also recommend this video about spending caps.
[…] has the best fiscal rule in the United States. The Taxpayer Bill of Rights (TABOR) limits state government spending so […]
[…] has the best fiscal rule in the United States. The Taxpayer Bill of Rights (TABOR) limits state government spending so […]
[…] state). But this is also a nationwide challenge, which helps to explain why a spending cap (like Colorado’s TABOR) is a much better policy than a balanced budget […]
[…] Landslide victory for TABOR in Colorado – If Milei’s victory was the best global election news of 2023, the defeat of Proposition HH was the best domestic election news of the year. Pro-spending lobbies have repeatedly tried to get rid of the TABOR spending cap. […]
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Hi Dan,
I too am a Coloradoan. A solid spending cap might be the best option to constrain the growth of government spending, but TABOR might not be the best model. Unfortunately, the courts have punched so many holes in TABOR that it’s like Swiss cheese.
I’d like to see a graph comparing Colorado government spending (all levels state and below) per 100K population for the past 40 years. TABOR was pass by the voters in 1992, so 40 years would give us before and after TABOR data.
According to the Urban Institute Colorado state and local spending is in the top quartile among the 50 states in 2020. So, TABOR hasn’t been effective at constraining Colorado state and local spending.
https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/state-and-local-expenditures#:~:text=Among%20the%20states%2C%20Alaska%20had,exceeded%20all%20states%20at%20%2423%2C100.
Dan, I’m from Colorado and I appreciate you bragging about TABOR, but you should know that TABOR is under attack. Here’s the bare bones explanation. Colorado’s property tax protection measure, called the Gallagher Amendment, was repealed by voters a couple of years ago after the legislature used slight-of-hand to put the repeal measure on the ballot. Now property taxes in Colorado have exploded and everybody is mad about it. The legislature is taking advantage of that crisis with two bills being referred to voters: Prop HH will lower property taxes by a miniscule amount, but only if voters also pass Senate Bill 303. Senate Bill 303 authorizes the state to take our TABOR refunds to lower our property taxes under Prop HH. It’s another legislative trick to bribe voters into giving up their TABOR money (they are taking money out of one of our pockets to put in our other pocket, all the while claiming they are lowering our property taxes, when in fact they are just giving us our own money.) Not only that, Senate Bill 303 allows the amount of TABOR money they can take to increase in future years until TABOR is all gone. There is so much tricky ballot language being used that uninformed voters will likely pass both bills, thus effectively killing TABOR, which was the ultimate objective of the legislature back when they got the Gallagher amendment repealed. It’s a very sad day for voters, but we are doing this to ourselves by trusting our greedy politicians.
Junior Galt is absolutely right!
Dan, I appreciate the fact that you occasionally highlight TABOR, but as an (unfortunate) resident of Colorado, I can tell you the leftists running the state are doing everything they can to get rid of it. A few years ago they figured out that to bypass TABOR (and the required voter approval on any new taxes) they could simply classify “taxes” as “fees” and suddenly they didn’t need to get voter approval. And after our property taxes were projected to increase around 50% next year, Colorado’s leftist “libertarian” governor is telling residents if they want to lower their property tax all they need to do is give up their TABOR refunds. Soon Colorado’s TABOR will be nothing but a memory.
Dan, I appreciate the fact that you occasionally highlight TABOR, but as an (unfortunate) resident of Colorado, I can tell you the leftists in charge of the state are doing everything they can to get rid of it. A few years ago they figured out that to bypass TABOR (and the required voter approval on any new taxes) they could simply classify “taxes” as “fees” and suddenly they didn’t need to get voter approval. And after our property taxes were projected to increase around 50% next year, Colorado’s leftist “libertarian” governor is telling residents if they want to lower their property tax all they need to do is give up their TABOR refunds. Soon Colorado’s TABOR will be nothing but a memory.
Democrats are always trying to undo Tabor. Eventually they will succeed, Colorado is now deep blue.