Colorado Education Funding and TABOR Rebates, Initiative 59 (2008)

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The Colorado Education Funding and TABOR Rebates Initiative, also known as Initiative 59, was on the November 2008 ballot in Colorado as an initiated constitutional amendment, where it was defeated.

The measure would have created a savings account within the State Education Fund, to be funded from 10 percent of the monies deposited into the State Education Fund, including revenue that would otherwise be rebated under the TABOR (Taxpayer’s Bill of Rights) rules, which the measure called for diverting to the State Education Fund. Beginning in 2011, Amendment 59 would have repealed the constitutional requirement to increase annual spending on schools by an amount equal to inflation and student enrolment growth – the permanent demand of Amendment 23. The other major part of that constitutional amendment, requiring annual 1 percent increases in school spending, would have expired automatically in 2010.[1]

Election results

Colorado Initiative 59 (2008)
ResultVotesPercentage
Defeatedd No1,201,22054.31%
Yes 1,010,409 45.69%

Election results via: The Colorado Secretary of State

Text of measure

The language appeared on the ballot as:[1][2]

SHALL THERE BE AN AMENDMENT TO THE COLORADO CONSTITUTION CONCERNING THE MANNER IN WHICH THE STATE FUNDS PUBLIC EDUCATION FROM PRESCHOOL THROUGH THE TWELFTH GRADE, AND, IN CONNECTION THEREWITH, FOR THE 2010-11 STATE FISCAL YEAR AND EACH STATE FISCAL YEAR THEREAFTER, REQUIRING THAT ANY REVENUE THAT THE STATE WOULD OTHERWISE BE REQUIRED TO REFUND PURSUANT TO THE CONSTITUTIONAL LIMIT ON STATE FISCAL YEAR SPENDING BE TRANSFERRED INSTEAD TO THE STATE EDUCATION FUND; ELIMINATING THE REQUIREMENT THAT, FOR THE 2011-12 STATE FISCAL YEAR AND EACH STATE FISCAL YEAR THEREAFTER, THE STATEWIDE BASE PER PUPIL FUNDING FOR PUBLIC EDUCATION FROM PRESCHOOL THROUGH THE TWELFTH GRADE AND THE TOTAL STATE FUNDING FOR ALL CATEGORICAL PROGRAMS INCREASE ANNUALLY BY AT LEAST THE RATE OF INFLATION; CREATING A SAVINGS ACCOUNT IN THE STATE EDUCATION FUND; REQUIRING THAT A PORTION OF THE STATE INCOME TAX REVENUE THAT IS DEPOSITED IN THE STATE EDUCATION FUND BE CREDITED TO THE SAVINGS ACCOUNT IN CERTAIN CIRCUMSTANCES; REQUIRING EITHER A TWO-THIRDS MAJORITY VOTE OF EACH HOUSE OF THE GENERAL ASSEMBLY OR, IN ANY STATE FISCAL YEAR IN WHICH COLORADO PERSONAL INCOME GROWS LESS THAN SIX PERCENT BETWEEN THE TWO PREVIOUS CALENDAR YEARS, A SIMPLE MAJORITY VOTE OF THE GENERAL ASSEMBLY TO USE THE MONEYS IN THE SAVINGS ACCOUNT; ESTABLISHING THE PURPOSES FOR WHICH MONEYS IN THE SAVINGS ACCOUNT MAY BE SPENT; ESTABLISHING A MAXIMUM AMOUNT THAT MAY BE IN THE SAVINGS ACCOUNT IN ANY STATE FISCAL YEAR; AND ALLOWING THE GENERAL ASSEMBLY TO TRANSFER MONEYS FROM THE GENERAL FUND TO THE STATE EDUCATION FUND, SO LONG AS CERTAIN OBLIGATIONS FOR TRANSPORTATION FUNDING ARE MET?[3]

Details of the proposal

Specifically, this measure would have:

  • Created a state education fund savings account within the state education fund;
  • Ended all TABOR (Taxpayers' Bill of Rights) tax refunds forever, instead diverting to the state education fund any tax revenue the state would otherwise be required to refund
  • Taken education funding out of the general fund, freeing up nearly half the budget for new spending
  • Funded the state education fund savings account, beginning in fiscal year 2009-2010, by deposits of 10 percent of the monies deposited into the state education fund;
  • Eliminated deposits from the state education fund if such deposits would cause the savings account to exceed 8 percent of the total amount appropriated by the general assembly from the general fund and the state education fund in the previous fiscal year;
  • Required that state educational spending increase by rate of inflation plus 1 percent through fiscal year 2010-2011;
  • Restricted spending of the state education fund and state education fund savings account to specific education expenses;
  • Permitted the general assembly to transfer moneys from the state education fund savings account to the general fund only if the general fund would otherwise be unable to maintain the 4 percent reserve required by law;
  • Required that maximum funds to be transferred from the general fund for transportation expenses, as provided by law, be expended before any moneys are transferred to the state education fund.

Support

House Speaker Andrew Romanoff was the leading proponent of this measure, as well as the very similar Initiative 125, in order to fix problems and conflicts he sees in the state Constitution, between the Taxpayer Bill of Rights (TABOR) spending requirements and Amendment 23, which boosts education spending. Both initiatives would eliminate the tax refunds from TABOR permanently and would put the money into a state education fund to be used for specific education purposes. Referendum C was enacted in 2005 to stop TABOR refunds for 5 years; with two years to go, Romanoff supports Amendment 59 to make it permanent.

Romanoff and State Sen. Steve Johnson introduced the so-called Savings Account For Education (SAFE) measure in the Legislature, where it died. Supporters hope to get a better outcome by taking the issue to the voters.[4]

The group spearheading the effort was called Colorado SAFE: Savings Accounts for Education.

Also supporting the measure were State Sen. Ken Gordon, the Colorado Children's Campaign, AARP in Colorado, the Colorado Association of School Boards, and Republican state Attorney General John Suthers.[5]

Supporters said this measure would protect public education funding by dedicating a permanent source of funding, thus untangling what they see as a "fiscal knot" in Colorado's constitution. At the same time, the measure preserves the right of citizens to vote on taxes, one of the main features of TABOR.

Trustees of Metropolitan State College of Denver endorsed the ballot measure on September 4, 2008.[6]

Romanoff said it is important that the state set aside money, as this measure would do, during good economic times in preparation for the inevitable bad times. "If times are good," he said, "we don't need to spend every dime we're taking in."[7]

Romanoff said the State Education Fund is like a "bucket" of money for public education, but the bucket is getting emptied out faster than it can be refilled. "It doesn't do any good to have the State Education Fund if there's no money in it," he said. This measure would eliminate the requirement that state education spending increase at a set rate.[7]

Opposition

Taxpayer advocates had long supported Colorado's Taxpayer Bill of Rights as the strongest taxpayer protection measure in the nation. They argued that with tough economic times looming, the repeal of the TABOR-mandated refund of over-collected taxes will be disastrous to Colorado's families. They considered Amendment 59 to be the largest tax increase in Colorado's history. While they concurred that Amendment 23's funding requirements were problematic, they believed that reforms should focus on addressing its minimum-spending requirement rather than scrapping TABOR and related tax refund checks altogether.

Opponents

The following individuals, organizations and newspapers opposed Amendment 59:

Arguments against

Notable arguments in opposition included:

  • Amendment 59's supporters claim it will create a "savings account for education" but it will do much, much more, and the taxpayers will pay for it.
  • 59 will eliminate ALL state refunds of excess tax collections FOREVER and place those funds into the state's education fund.
  • 59 removes the education fund from the 6 percent growth restriction currently in place and allows the Legislature to make unlimited transfers from the general fund into the unrestricted education fund. Since education currently accounts for nearly half of all state spending, removing this money from growth restrictions leaves room for the remaining general fund to nearly double and still stay within the growth limits over the prior year's budget. Do you really want general fund spending to double?
  • 59 prohibits unspent education fund money to being transfered back to the general fund, allowing the education fund to grow without taxpayer permission.
  • 59 will increase state tax collections and the state budget, and reduce the money left in the taxpayers' pockets to spend as they see fit. This means less money for consumer purchases, savings, investment, job creation, mortgages, utilities, tuition, food, etc.
  • Amendment 59 would also allow for significant government expansion into our lives. As Peter Blake notes:"Although 59's proponents are eager to point out that TABOR's prohibition against tax hikes without voter approval would remain in place, passage would effectively eliminate TABOR's other major goal: Limiting, even shrinking, the role of government in the state's economic life."[9]
  • Amendment 59 is a vehicle for special interests to receive taxpayers dollars under the guise of education. "Although it is nominally designed to provide money for P-12 (formerly K-12) education, and the Colorado Education Association has kicked in $85,000, the ballot issue is drawing support from a wide variety of groups."[9]
  • According to Heritage Foundation research, TABOR had a huge impact on the size of Colorado's budget deficit in 2002, as shown in the chart below. Amendment 59 would allow for large deficits in similar periods of economic slowdown in the future.[10]

Tabor04.png

"Five Reasons to Oppose Amendment 59"

1.It will take money out of your wallet. Amendment 59 will make Referendum C's five year moratorium on refunding overcollected taxes permanent.

2. It is unnecessary. Referendum C still has until 2010 before it expires. What's the hurry in extending it?

3. It couldn't come at a worse time. With the economic trends looking dismal, Coloradans are on a tight budget. Instead of taking more of their hard-earned income, the state should try the same kind of fiscal prudence itself.

4. It is disingenuous. While it is labeled the "Savings Account For Education," Amendment 59 supporters include members of the health care lobby, trial bar, and commission for the arts and have contributed hundreds of thousands of dollars to the cause. Obviously they stand to get a piece of the pie.

5. It will undo TABOR's successes. Colorado went from a stagnant high-tax state to a dynamic economy due to TABOR proponents' insistence on a lean public sector and returning income to the individuals who earned it. Those days will be long gone with the passage of Amendment 59.[11]

Opponents Quotes

Numerous Republican lawmakers have expressed opposition to the measure, including Douglas Bruce, who helped write TABOR. Bruce said the measure "would mean unlimited state funding forever."[5] Bruce says the main objective of the measure is to get rid of TABOR and make unfettered spending easier.[4]

"If he couldn't convince his Democratic colleagues and the governor of doing this through the (legislative-referred) referendum process, the question is how is he going to convince the rest of Colorado to give up their tax refunds," said Jon Caldera, executive director of the Independence Institute. "I'm not going to worry about it until he gets on the ballot."[12]

Ari Armstrong wrote that we should not be "fooled by claims that the new measure is just about education. As one representative of the 'yes' campaign noted in a September 1 email, the measure (which advocates are calling Savings Accounts for Education) would "relieve pressure on higher education, health care, transportation and other core services." In other words, because the new taxes go to education, the legislature can transfer other funds from education to whatever it wants."[13]

Ari Armstrong continued, "SAFE is a lie. SAFE stands for 'Savings Accounts for Education,' but the measure would boost funding for whatever programs the legislature wants."

It is also a typical example of "concentrated benefits, dispersed costs." Blake noted that SAFE's "promoters have piles of money and endorsements. Much of this money is coming from people who want a piece of the tax revenues or other political favors. The recipients of the tax dollars -- for whom benefits are concentrated -- have a big incentive to fool Colorado voters into approving it. The funders -- among whom the costs are dispersed -- have little incentive to spend time or money opposing the measure."[14]

Financial backing

Donors to the Colorado issue committee Savings Account For Education included many groups who have nothing to do with education. List of donors included:

  • Denver Foundation, $870,000[15]
  • AARP, $100,000[16]
  • Colorado Health Foundation, $200,000[17]
  • Children's Hospital Association, $25,000[18]
  • Colorado Municipal Bond Dealers Association, $30,000[19]
  • Colorado Bankers Association, $10,000[20]
  • Colorado Bar Association, $25,000[21]
  • Colorado Medical Society, $5,000[22]
  • National Education Association $250,000[23]
  • Colorado Education Assocation, $262,638.02[24]

Polls

See also Polls, 2008 ballot measures.

A statewide telephone poll of 625 registered voters was conducted by Mason-Dixon Polling & Research on behalf of the Denver Post on October 28-29.

The poll found:

Month of Poll Pollster Yes No Undecided
Oct 28-29 Mason-Dixon 41 percent 38 percent 21 percent[25]

Path to the ballot

The measure was certified for the November 2008 ballot on September 2, 2008, as Amendment 59.[26] Supporters submitted 164,000 signatures on August 4, 2008.[27]

See also

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External links

Additional reading

References

  1. 1.0 1.1 Colorado State Legislative Council, "Ballot History," accessed February 26, 2014
  2. Secretary of State 2008 initiative and referendum information, "Amendment 59," accessed January 7, 2014
  3. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  4. 4.0 4.1 Denver Business Journal: "Romanoff to begin petition drive for budget-reform measure," June 25, 2008
  5. 5.0 5.1 The Examiner: "Romanoff to ask voters to repeal TABOR refunds," May 4, 2008
  6. Denver Business Journal: "Metro State board backs energy-tax measure," September. 4, 2008
  7. 7.0 7.1 Journal-Advocate: "Romanoff: Status quo doesn’t work," September. 13, 2008
  8. MarketWatch.com: "Nation's Largest Taxpayer Group Launches Statewide Fight to Protect Colorado Taxpayers," October 15, 2008
  9. 9.0 9.1 Rocky Mountain News: "Ta-ta TABOR rebates?," September 11, 2008
  10. [http://noto59.org/content/amendment-59-fact-day-3 NoTo59.org
  11. http://noto59.org/
  12. Rocky Mountain News: "Romanoff launches petition drive," June 26, 2008
  13. Colorado Freedom Report: "Am. 59 Would Impose New Forever Net Tax Hike," September 8, 2008
  14. Colorado Freedom Report: "Special Interests Line Up for 59 ," September 11, 2008
  15. Colorado Secretary of State Web site
  16. Colorado Secretary of State Web site
  17. Colorado Secretary of State Web site
  18. Colorado Secretary of State Web site
  19. Colorado Secretary of State Web site
  20. Colorado Secretary of State Web site
  21. Colorado Secretary of State Web site
  22. Colorado Secretary of State Web site
  23. Colorado Secretary of State Web site
  24. Colorado Secretary of State Web site
  25. Denver Post:, "Most state measures look poised for a loss," November 1, 2008
  26. Denver Post: "Super-size ballot on the way," September 2, 2008
  27. FaceTheState.com: "Campaigns submit petitions at the 11th hour," August 4, 2008