Colorado state lawmakers convened for a special session this week to address what has been referred to by Gov. John Hickenlooper as “technical errors” in Senate Bill 267, legislation that significantly weakened Colorado Taxpayer Bill of Rights (TABOR).
Passed in 1992, TABOR subjects tax increases to a vote of the people and caps spending increases at the rate of inflation plus population growth. If the state collects revenue in excess of the TABOR cap, it must be refunded to taxpayers, unless Colorado residents vote to allocate the revenue elsewhere. SB 267, passed during the regular session, significantly weakened TABOR by removing hospital tax revenue from the TABOR cap, making it more difficult to hit the cap and trigger taxpayer refunds—and did so without a vote of the people. Thanks to passage of SB 267, which a few treasonous Republican legislators joined with the Democrats to enact, Colorado will be allowed to tax and spend more than would’ve otherwise been the case.
The Independence Institute, a Denver-based free-market think tank, explained in this column for the Denver Post why Republicans who joined with Democrats to pass SB 267 massively betrayed their constituents and all Colorado taxpayers:
“The ‘grand compromise’ of SB 267, something worse than Ref C and Ref D (2005 ballot measures that temporarily suspended TABOR, resulting in Coloradans having to pay an additional $16 billion in higher taxes) and without a public vote, is the largest ‘grand betrayal’ from Republicans I have ever witnessed in my more than 25 years in Colorado politics. And that says a lot,” Caldara wrote. “The SB 267 scheme was hatched to go around us voters with the false narrative of ‘rural hospitals.’ Because it’s just impossible to find money for hospital in a state budget that has more than doubled in a decade.”
The so-called “technical errors” were caused because SB 267 changed the way in which it taxes recreational marijuana. Prior to its passage, marijuana sales were subject to a 2.9% local sales tax, identical to other consumer goods. Additionally, marijuana was assessed a special 10% state tax—resulting in combined rate of 12.9%. SB 267 eliminated the 2.9% local sales tax, and increased the overall taxation of marijuana to 15%.
By doing so, however, Gov. Hickenlooper and legislators inadvertently stopped certain special taxing districts from reaping marijuana sales tax revenue, which localities did not expect. The result? Organizations such as the Denver zoo, the Museum of Nature & Science, and other nonprofits have unexpectedly lost hundreds of thousands of dollars, and they have demanded that lawmakers return their funding. Their outcry is what led to this week’s special session.
Early on Monday of this week, first day of the special session, Republicans, who control the state senate with a one vote majority, rejected legislation to reinstate the sales tax, AKA “the fix,” by 3-2 margin. The following day, another bill to reinstate the sales tax, without a vote of the people and in violation of TABOR, was passed out of the Democrat-controlled House, only to subsequently be rejected by Republicans in the Senate Transportation Committee once again.
House Majority Leader K.C. Becker, a Boulder Democrat who sponsored the tax hike that died yesterday expressed disappointment following his failure to raise taxes in violation of the state constitution.
“I don’t think when people passed TABOR, they meant to tie the hands of legislators,” Rep. Becker said. Actually, Rep. Becker, that is exactly what TABOR is meant to do and is why Colorado voters approved it and continue to support it.
Although many Coloradoans were rightfully outraged when a few Senate Republicans went against their word and joined with Democrats to pass SB 276 during the regular session, the resolve shown by Republican legislators this week to fight for hardworking taxpayers is commendable. Hopefully, this renewed resolve to defend Colorado taxpayers will continue into the 2018 session.