- The Washington Times - Wednesday, September 21, 2005

DENVER — Republicans used to be able to count on two things: death, and their party’s opposition to taxes.

In Colorado, however, a pair of ballot measures aimed at suspending the state’s much-vaunted Taxpayer’s Bill of Rights (TABOR) are pitting Republican against Republican in a campaign that’s become a national showdown of the party’s core values.

“This has split the Republican Party badly,” said Robert Loevy, political science professor at Colorado College.

National organizations such as FreedomWorks, led by former House Majority Leader Dick Armey, Texas Republican, have joined Colorado conservatives in lobbying against Referenda C and D, which would lift TABOR’s spending restraints and taxpayer refunds for five years.

Not only are they running up against the usual suspects — state Democrats and unions — but also against a cadre of business interests and Republican luminaries led by Gov. Bill Owens, a Republican; party fundraiser Bruce Benson and former Sen. Hank Brown, now president of the University of Colorado.

Mr. Owens, long regarded as a fiscal conservative, brokered the deal with the Democratic legislature last spring to place the measures on the ballot, and he is featured in a television advertisement urging voters to support Referenda C and D on Nov. 1.

“A glitch in the Taxpayer’s Bill of Rights is penalizing the state for the recession and slowing our economic recovery,” Mr. Owens says in the ad.

Under Referenda C and D, the state would gain $3.6 billion to be spent on schools, higher education, roads and health care — without a tax increase, proponents say.

But critics insist the budget crunch could be solved by some good, old-fashioned spending cuts and a little restraint.

The $3.6 billion funding boost would come by means of the state keeping the surplus instead of refunding it to taxpayers, making Referenda C and D “the largest tax increase in state history,” said Jon Caldara, president of the free-market think tank Independence Institute and leader of the “Vote No; It’s Your Dough” campaign.

Passed in 1992 as a constitutional amendment, Colorado’s TABOR imposes caps on state government spending, with allowances for population growth and inflation. What distinguishes Colorado from other states with spending limits, however, is its rebate. While other states stash excess revenue in a “rainy day fund,” Colorado’s TABOR refunds the surplus to the taxpayers, and only the voters can override the cap.

The measure is largely credited with keeping the state’s spending under control during the 1990s, thus saving Colorado from massive deficits when the recession hit in 2001.

“TABOR saved Colorado’s fiscal fanny,” Mr. Caldara said. “If it weren’t for TABOR, Colorado would be in the same fiscal crisis California is now.”

But critics say TABOR is preventing the state from fully enjoying the economic recovery, thanks to the “ratchet effect.” When revenue falls, the spending cap is lowered permanently, forcing the government to return excess tax revenue instead of putting it into projects or programs.

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