DENVER — For nearly 30 years, the Taxpayer Bill of Rights (TABOR) has served as a tenant in Colorado’s Constitution. At its core, TABOR requires voter approval for any tax increases in the state.
However, TABOR makes for an important exemption for fee-based, state-run enterprise programs. A fee can be created by the state legislature or increased without voter approval.
While taxes are designed to bring money into the state government’s general fund, a fee is collected to offset the costs of a particular program.
The Funding Advancements for Surface Transportation and Economic Recovery Act of 2009 (FASTER) is one example of an enterprise. It allows the state to improve roadway safety and make transportation repairs and is paid for by drivers.
A Blue Book analysis of the proposition shows that as of 2018, there were 16 of these enterprises, including ones for higher education, healthcare, the lottery, unemployment insurance, parks and wildlife, petroleum storage tanks, correctional industries, pollution cleanup and more.
A question on the November ballot would change the way some of the larger fee-based programs would be created.
Proposition 117 asks voters if they want to have the right to approve of the creation of new enterprises that are projected to collect $100 million or more in fees over the first five years.
In the 2018-2019 budget year, fee revenue made up approximately 20% of the state’s total budget, according to the Blue Book analysis of the proposition.
The voter approval would also be required for a state enterprise that was not projected to garner more than $100 million in five years, an existing enterprise that loses and then regains its status as an enterprise, and multiple enterprises created within a five-year timeframe to serve the same purpose.
The initiative also designates how the ballot language must be presented for voters when it comes to these new enterprises.
The case for Proposition 117
Supporters of Proposition 117 say this will give taxpayers more control of their money and bring more transparency to the state government when it comes to these enterprises.
“Over the years, the enterprise system has gone from things that are more user-based and sort of in transition into things that are more mandatory,” said Lindsey Singer, the communications director for Colorado Rising State Action. “These fees, when it’s not a choice, it feels a lot like a tax, so we’re just making sure that people in Colorado are getting a vote.”
Because the state budget is so tight, she is worried legislators will increasingly try to lean on these programs as a way to bring in money. Regardless of whether it’s a fee or a tax, Singer says the result is the same and people are paying more.
“An enterprise when you’re talking about government which is what this is about is a legal fiction, it’s what politicians create when they want to raise taxes but not call it a tax,” said Sen. Paul Lundeen, a Republican who represents El Paso County.
Sen. Lundeen believes the intent of TABOR was clear and that these types of programs undermine its purpose.
“This bait and switch, this idea of what we’re going to create an enterprise and collect a fee and therefore we don’t have to ask the people whether we can raise their taxes, that’s what (Prop.) 117 is designed to knock down,” he said.
Singer argues Proposition 117 will close the loophole, however she admits there are some things moving forward that might need to be addressed, which is why this is a proposed law and not an amendment to the state constitution.
“We want to first send a message that Coloradans really do want to vote on these big programs,” Singer said.
The case against Proposition 117
Opponents of Proposition 117 say this could have devastating consequences on education and critical programs for the state.
Rep. Emily Sirota, a Democrat who represents Colorado's 9th District, says enterprises are important because they do not count toward the revenue cap under TABOR, are separate from the general fund and are only paid by the program’s users.
“Enterprises are one of the very few sets of tools that legislators have in their toolbox to try to manage the needs of the state,” Rep. Sirota said.
She believes Proposition 117 is trying to solve a problem that doesn’t exist and says there could be a number of unintended consequences if the initiative passes.
“It will be very complicated, very messy and make enterprising extremely difficult if not impossible for a number of the things that we’re endeavoring to do to make Coloradans' lives better,” Rep. Sirota said.
Meanwhile, Amie Baca-Oehlert from the Colorado Education Association believes this initiative could severely impact schools at a time they can least afford it.
“We do not need a measure on the ballot that’s going to hurt K-12 funding even further,” Baca-Oehlert said. “We need to do better by our students and not harm them.”
She points out that many districts are already working on a constrained budget with fou-day weeks and says she’s not sure whether they would be able to sustain further cuts to funding.
Supporters of Proposition 117, like Singer, say they know there are some issues with education funding in the state but this is not the way to address it. Sen. Lundeen, meanwhile, said the education argument is used too often to try to ward off change.
Opponents are also worried about the effects on things like the hospital provider fee, which provides access to those who cannot pay for medical care, among other things.
If Proposition 117 passes, they also argue that this will bring more special interests into elections in order to convince voters to approve or disapprove of proposed enterprises.
“It would just be one more thing on our ballot that would bring in large corporate dollars, big, big money into our elections,” Baca-Oehlert said.
Baca-Oehlert is asking voters to think about the long-term goals of the state before casting their ballots in November.
“We also need to understand that the vote that we cast today could have long-term impacts into the future for our state,” she said. “What is the Colorado that we want and deserve?”
The final say
For nearly 30 years, voters have had the final say on tax increases, but the state legislature has had the last word on fee increases.
Proposition 117 could change that and put even more on the ballot for voters to decide in future elections.