TABOR for Dummies: What Is It? And How Does It Affect Colorado Property Taxes?

Anyone paying attention to Colorado’s November election heard the word “TABOR” about a million times.

Despite being this year's star at the ballot box, Coloradans who aren’t so engaged in state politics (or who are under the age of thirty) might only know of the Taxpayer’s Bill of Rights from the refund checks that arrive in their mailboxes every few years. But TABOR is much more than that.

On Friday, November 17, the Colorado Legislature will convene for a special legislative session to address rising property taxes — with TABOR playing a major role in it all.

Before the debate kicks off, we're here to give you a crash course on what to know about the decades-old amendment and how, exactly, it affects us:

What Is TABOR?

The Taxpayer’s Bill of Rights is an amendment to the state constitution that was passed by Colorado voters in 1992. It limits how the state government and local governments can raise and spend money.

In short, TABOR requires voter approval for tax increases and limits the growth of government revenues and spending.

Any revenue generated over the set limit, which is calculated each year based on inflation and state population growth, must be returned to taxpayers unless they vote to let the government keep it. The money is often returned through refund checks, but can also be returned via “any reasonable method,” including property tax exemptions and income tax rate reductions.

“My goal was to limit the financial domination of state and local governments in the lives of Coloradoans,” says Douglas Bruce, former state representative and author of the TABOR amendment. “I knew government would lie and cheat."

TABOR is considered one of the most restrictive tax policies in the nation. Colorado is the only state that has adopted it, with efforts failing at the ballot box in several other states, including Florida, Nebraska and Oregon.

While still substantial, TABOR’s influence in Colorado has waned over the past three decades.

Voters have loosened TABOR restrictions on most local governments in the state. Fifty-one of Colorado’s 64 counties have been “de-Bruced,” meaning voters have chosen to waive TABOR’s strict government spending limits. That is also the case for 177 of Colorado's 178 school districts and for over 200 municipalities across the state.

While the state government still must adhere to TABOR, legislators have recently turned to fees as a workaround for the revenue cap and ballot requirement.

TABOR Pros and Cons

TABOR supporters champion it as a way to limit the growth of government and force politicians to explain their spending to the people.

Since the amendment took effect, Colorado voters have rejected 26 of 38 ballot measures intended to increase state revenue. Of the twelve successful measures, only four increased or created new taxes statewide — all of which were “sin taxes” on marijuana, tobacco and gambling.

“The Taxpayer’s Bill of Rights is a critical check on tax-and-spend politicians who continually want to grow government to unsustainable levels,” says former state representative Dave Williams, chair of the Colorado Republican Party. “Government is too big and spends too much. Colorado Republicans will always side with the overwhelming majority of voters who demand politicians ask permission for any increases.”

While the Colorado GOP has rallied behind TABOR, the Colorado Democratic Party has made repealing TABOR its top taxation-related priority.

TABOR critics say it prevents the government from adequately funding needed services like transportation and education. Colorado has long had some of the lowest funding in these sectors nationwide. This year, the state's highway system ranked 43rd in the nation, and per-pupil education spending was in the bottom twenty, though that’s up from the bottom ten in 2015.

The Center on Budget and Policy Priorities argues that TABOR’s revenue growth formula does not keep pace with the cost increases in maintaining services or the need for new investments and improvements. It attributes the miscalculation to the fact that the cost of providing public services is rising faster than overall inflation and the population of groups that require the most state services — like children and the elderly — is increasing faster than the general population.

"TABOR has forced Colorado to balance our budget on the backs of our kids and the middle class. It has drained our schools of resources, made it harder to build and maintain our roads, and fund emergency services," says Shad Murib, chair of the Colorado Democratic Party. "Working Coloradans deserve a tax code that works for them, not one that sends tax refunds to the ultra-wealthy, who already enjoy some of the lowest taxes in the country."

Despite its detractors, TABOR remains popular among voters: One 2019 poll found that 46 percent of registered Coloradans had a favorable opinion of TABOR, compared to 36 percent, who had an unfavorable opinion, and 18 percent, who had no opinion.

Favorability could be even higher today as voters have enjoyed increasingly large TABOR refund checks over the years.

State revenue only surpassed the TABOR limit eleven times from 1992 to 2022, but six of those times were from 2014 on, resulting in near-annual payouts of up to hundreds of dollars. Projections estimate more refunds for 2023, 2024 and 2025, save any changes from the legislature.

Why Is TABOR Involved in the Property Tax Debate?

Proposition HH would have reduced property tax rates for at least ten years and used the TABOR surplus to fund the cut. So instead of going to TABOR refund checks, a lot of that money would have been used to make up for some of the lost property tax revenue — funding local governments, rental assistance and education.

After voters rejected Prop HH, Governor Jared Polis called a special legislative session dedicated to addressing upcoming property tax increases. While announcing the special session on November 9, Polis said the TABOR surplus is still on the table as a way to fund a property tax cut.

“TABOR surplus can only be used for reducing taxes. You can’t use that for expenditures. You can use it for cutting taxes, and you should,” Polis said during the announcement.

He noted how the general fund and the state reserve are other funding options, adding: “We are very proud of Colorado’s reserve at 15 percent. We want to make sure that we have money set aside for a rainy day. That being said, as part of these negotiations to reduce property taxes, we would be willing to have a conversation about reducing that a bit. We’re talking like 14.5, 14.25, something like that. Certainly not below 14.”

According to state officials, there is already $200 million in general fund money set aside for property tax relief to be used during the special session. But depending on the size of the property tax cut, that won’t be enough.

Michael Fields, president of Advance Colorado — which advocated against Prop HH — claims a bill draft using TABOR surplus funds is already being proposed to legislators.

“Apparently, some legislators didn’t get the memo that voters sent on Election Day,” he said in a press release on Monday, November 13. “Coloradans said loudly that they want to protect their TABOR refunds and not divert them to a shell game that requires taxpayers to pay for their own tax relief. It’s shocking that lawmakers would turn around and try to pass what is clearly the ‘Son of HH.’”

Besides just dipping into the surplus, the special session could bring more TABOR changes. Prop HH would have made all TABOR refunds equal for one year, instead of being based on income. That would have increased the amount of money people get back for anyone who makes less than $99,000 per year and decreased refunds for those who make more than $99,000 per year.

Senator Chris Hansen tells Westword that legislators are still considering this kind of change.

“We are looking at a number of options on both the tax relief side and the refund mechanisms,” says Hansen, who sponsored the bill to put Prop HH on the ballot earlier this year.

What’s Next?

The special legislative session convenes on Friday, November 17. It takes at least three days to pass a bill, and Polis expects the work to be complete before Thanksgiving, so the session will end sometime between Sunday and Wednesday, November 22.

Legislators are only allowed to pass immediate, short-term property tax relief during the special session. That means that whatever changes are made will only apply to property taxes and TABOR in 2024.

Legislators, however, will pick the work right back up and start discussing long-term policies when they convene for the regular legislative session in January; Polis has already asked the legislature to create a blue ribbon commission dedicated to developing long-term property tax solutions.

Father TABOR himself, Douglas Bruce, tells Westword he is campaigning to be on that commission — though he hasn’t heard back from Polis yet.

Bruce suggests that legislators require each of the state’s near-5,000 local governments to lower their mill levies to keep property tax bills low. He also wants to fight against any use of the TABOR surplus to fund a property tax cut, saying the surplus is “already committed to be returned to citizens.

“We want our state TABOR refunds and our local TABOR refunds and our spending limit honored on property tax refunds,” he says.

Polis spokesperson Conor Cahill tells Westword that the governor “encourages the legislature to create a balanced process and entity" for the commission.