Colorado Voters Give Up $3.7 Billion in Tax Refunds

Voters in Colorado approved a plan Tuesday to roll back the state's Taxpayer Bill of Rights, letting the state keep some $3.7 billion in tax funds over five years. The move is aimed at helping the state bounce back from a recession.

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Voters in Colorado have approved a plan to roll back that state's Taxpayer Bill of Rights. Government leaders contend that a recession plus that taxpayer bill, known as TABOR, have depleted state revenues. The vote is a defeat for advocates of smaller government, as NPR's Jeff Brady reports from Denver.

JEFF BRADY reporting:

The smaller government advocates held their election night party in the back room of a sports bar next to the baseball stadium. When it came time to announce they'd lost the election, John Caldera stood on a chair to deliver his speech. Caldera heads a local conservative think tank, and he congratulated his supporters for taking on the political establishment.

(Soundbite of speech)

Mr. JOHN CALDERA (Conservative Activist): We had a governor, we had a mayor, we had a Democratic Party, and good God, we got people who called themselves Republicans working for the largest tax increase in Colorado's history, and yet we stood up to them, and we ought to be damned proud of that.

(Soundbite of cheering)

BRADY: Caldera calls the rollback of TABOR a tax increase, but close by at the victory party, they call it saving the state. Caught between the strict spending caps in TABOR and mandated spending increases in K through 12 education, money for other things like roads was getting squeezed out. Ken Gordon is a Democrat and the majority leader of the state Senate.

State Senator KEN GORDON (Majority Leader, Colorado Senate): Well, in Colorado, if we'd gone along with TABOR, we would have been the first state to defund higher education.

BRADY: Gordon says money for universities would have been cut completely within a decade. TABOR supporters want to pass similar initiatives in Maine, Oklahoma, Nevada, Arizona and Ohio. Next week, California voters will consider their own version of spending caps. Senator Gordon advises those states not to make the same mistake Colorado did. But not everyone at the victory party feels that way. Republican Governor Bill Owens says he's still a supporter of TABOR. He says Colorado's version just needed a fix.

Governor BILL OWENS (Colorado): TABOR can actually work to limit the rate of growth of government if, in fact, you allow it to recover from a recession.

BRADY: Under TABOR, when the state has to cut spending during a recession, a new lower cap goes into effect. So while TABOR sets a ceiling on spending, it doesn't set a floor. After a recession, state spending never goes back up, even when the economy recovers. It's known as the ratchet effect, and that happened in 2001. Owens says the referendum voters passed yesterday fixes that problem, but his support for the plan may have cost him his future political career. TABOR supporters say they feel betrayed by the governor. As Owens took to the microphone, he called for a truce in an issue that has split the state's Republicans.

Gov. OWENS: ...made, and I believe in the great tradition of Colorado policy that the proponents and opponents will unite to do what's right for Colorado. Isn't that right?

(Soundbite of cheering)

BRADY: But back over at the bar by the stadium, unity wasn't on John Caldera's mind. He's thinking about suing.

Mr. CALDERA: What's next is we'll take a look and see if this is something that we want to challenge legally.

BRADY: Caldera was able to claim one victory this election, a companion referendum that would have allowed the state to borrow $2 billion. Voters rejected that. Jeff Brady, NPR News, Denver.

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