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Today’s Top Headlines

Lawsuit Challenges Colorado's TABOR

by Mike Godfrey,, Washington

25 May 2011

A lawsuit has been filed in the United States federal court in an attempt to declare Colorado's Taxpayer’s Bill of Rights (TABOR) unconstitutional.

Voters approved TABOR in 1992, as a constitutional amendment designed to restrain growth in government. It provides that increases in overall tax revenue in Colorado must be tied to inflation and population increases unless larger increases are approved by referendum. It applies to all levels of government in Colorado - the state government, cities, counties, school districts and special districts – and is the most restrictive tax and spending limitation in the country.

The lawsuit, as filed, alleges that that TABOR goes against the type of democratic government established in the US, where representatives are elected to make decisions, rather than the present arrangement in Colorado where the electorate directly votes on tax policies.

TABOR’s opponents point out that, since the recent economic recession, the state legislature has been unable to take decisions to counteract Colorado’s budgetary shortfall of over USD1bn, and the state’s public services, particularly its schools, and infrastructure have suffered as a result of the lack of available revenue to finance public spending.

On the other hand, TABOR’s supporters argue that it has benefited taxpayers to establish limits on revenue and spending and keep the state government accountable to the voters, and that, therefore, the latter should retain their right to vote on any tax increases.

TAGS: court | tax | economics | fiscal policy | law | budget | United States | tax reform

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