TABOR Coalitions and the Battles They Wage
The citizen-led referendum as a policymaking tool is the bane of lawmakers across the country. This progressive-era expansion of direct democracy endows voters with the power of legislatures but is often another avenue for coalitions to fight over policy. Sometimes those direct-democracy policies are laws, which can be amended by the legislative body, but on rare occasions voters initiate changes to the state constitution. The most infamous of these voter-approved initiatives is the 1992 Colorado constitutional amendment: the Taxpayer Bill of Rights (TABOR). The constitutional amendment has two parts: one that formulaically restricts the amount of revenue the state can collect, called the TABOR limit, and a second that requires all tax increases at both the state and municipal level be approved by voters.
Despite opposition from Colorado lawmakers and a number of groups seeking to raise revenue for their legislative priorities, TABOR has only been amended by the voters one time. The 2005 ballot amendment, Referendum C, allowed the state to spend all revenue collected for a period of five years before once again requiring the state to refund any revenue collected in excess of the TABOR limit. Despite opposition from subsequent legislatures, governors, and municipal leaders, no further constitutional changes have been made. They have instead used a series of complicated work arounds, such as fees and voter approved initiatives, to raise revenue to fund priorities. These work arounds have largely been found legal even though they are in direct violation of the spirit of the constitutional amendment.
There is no more interesting or powerful constitutional amendment in any state that impacts a wider range of policies. TABOR creates a state-wide policy environment that is a true conundrum in an American-style-democracy. It is a popular and enduring check on legislative and executive power yet directly limits public officials from instituting the programs they were elected to enact. In American politics, expecting policy coherence and consistency from the public can drive lawmakers mad. TABOR exploits that incoherence. It affects almost every policy decision in the state by restricting funds and puts voting requirements on any question of fiscal expansion. As Colorado has grown more Democratic politically and sought to expand government programs, TABOR has become an even more important bulwark for opponents.
TABOR encompasses a specific policy subsystem with entrenched interests on both sides pitched in an epic, long-running struggle to amend, defend, or work around the policy. Each time a policy impacted by TABOR is put to the voters, there is an official ballot campaign with established coalitions on each side. The essay that follows applies the Advocacy Coalition Framework (ACF) to better understand policy wins and losses related to one of the most powerful direct-democracy mechanisms in the country and how it has affected Colorado during a dynamic growth period for the state.
Background
The original Colorado TABOR initiative passed by eight points in the 1992 general election, 54–46. The constitutional amendment was spearheaded by conservative activist Douglas Bruce. The proposed amendment was simple in concept, as well as in language:
Shall there be an amendment to the Colorado Constitution to require voter approval for certain state and local government tax revenue increases and debt; to restrict property, income, and other taxes; to limit the rate of increase in state and local government spending; to allow additional initiative and referendum elections; and to provide for the mailing of information to registered voters?
Simply put, should Colorado voters have the final say over revenue collections at the state and local level?
In practice, TABOR serves as a limit on the resources available to Colorado state and local governments in two ways. First, taxing entities cannot raise tax rates without voter approval. Second, if revenues come in above the TABOR limit, which is baseline plus inflation and growth, the excess, known as the TABOR surplus, must be returned to the taxpayers. If governments want to spend the TABOR surplus, their plan needs voter approval.
In 2005, Referendum C passed 52–48 to allow Colorado a few temporary workarounds from TABOR. The referendum allowed the state to keep all collected revenue and suspend TABOR refunds for five years, FY2005–06 through FY 2010–11. Following that five year gap, the new TABOR limit would be pegged to inflation and growth off the FY 2007–08 revenue collections. However, any revenue collected above the old, pre-2005 Tabor limit base could only be spent on education, healthcare, roads and bridges, and retirement plans for firefighters and police officers.
In order to raise revenue, legislators have turned to fees instead of taxes. Traditionally, fees are collected from a specific activity, like purchasing gas or hailing a rideshare. They are generally required to fund improvements related to that activity, like improving transportation infrastructure. Colorado courts have found that so long as the funds raised are spent in certain ways, using fees as a revenue raiser is acceptable and does not require approval from voters. Also importantly, fees do not count towards the TABOR revenue cap so budgets can grow freely without needing to return any money to taxpayers.
We started down a road 25 years ago, after TABOR was passed, of ‘government by fee. And now every tax is called a fee.
— State Senator Bob Gardner
While nearly ten statewide tax increases have failed since TABOR was enacted, smaller taxes on gambling, nicotine, and cannabis have been approved by voters. Using the advocacy coalition framework, we can see what made some of the recent efforts to raise revenue successful while others have failed.
Theoretical Application: Advocacy Coalition Framework
The ACF describes how policy does (or does not) change when there are multiple coalitions in conflict in a particular policy subsystem. The framework is not used to improve the policy process so much as understand it. The framework seeks to explain why some governmental programs, like TABOR, remain stable over long periods only to go through periods of more dramatic change.
The ACF is most useful for understanding high conflict situations involving coalitions, learning, and policy change at the policy subsystem level of analysis. It can be most productive to look at the framework’s components — coalitions, learning, and policy change — and the relationship among them, rather than the framework as a whole. Coalitions are composed of actors, and an actor can be anyone active in a policy subsystem. Actors are heavily influenced by context, are motivated by goals but unsure how to achieve them, simplify the world through their belief system, and are prone to assimilation. It is important in ACF to understand how people develop their belief system based on experience and other evidence.
The ACF can be utilized as a tool to understand political context through a stakeholder analysis. By doing so, the framework utilizes several categories of research such as access to legal authority to make policy decisions, information, public opinions, mobilizing public supporters, financial resources, and skillful leadership.
Coalitions form around policy core beliefs, which are values, commitments, and preferences concerning the seriousness, cause, and solution of policy problems. Although coalitions are made up of actors, they are not considered actors themselves. They operate with varying degrees of cohesiveness based on agreement of secondary beliefs, such as tactics. The ACF interprets policy as the expression of a belief system. This makes policy very personal and leads coalitions to remember losses more readily than gains (an element of what is known as the “devil shift”) and leads coalitions to be formed more for shared opponents than for shared beliefs.
In the ACF, policy-oriented learning is defined as “enduring alternations of thought or behavioral intentions that result from experience and which are concerned with the attainment or revision of the precepts of the belief system of individuals or of collectives.” Learning is associated with changes in belief systems of coalition members that include not only the understanding of a problem and associated solutions but also the use of political strategies for achieving objectives. Both sides of the TABOR issue have changed beliefs and strategies based on political and legal changes.
TABOR through the Advocacy Coalition Framework
Explaining TABOR through the lens of the ACF offers some fascinating insights. Because TABOR has been at the center of a policy fight for thirty years, there are many examples of coalitions, policy-oriented learning, and policy changes to explore. The discussion that follows looks at what aspects have made each side successful at various points of this epic policy struggle.
Coalitions
A key aspect of the ACF is that coalitions are formed around core beliefs and are fairly durable. The central actors on the proponents’ side of the TABOR fight are the conservative and libertarian-minded legislators, usually Republicans, and advocacy groups, such as the TABOR Foundation, the Independence Institute, and Americans for Prosperity. In fact, TABOR author Douglas Bruce is so associated with the 1992 amendment that any attempts to weaken are known as “debrucing.”
The animating belief system of this coalition is that the government should be kept as small as possible, be fiscally responsible, and that voters should have power to reject tax increases. This coalition is most successful when it seeks to galvanize existing political opposition to expanded taxes and government. The most recent example is Proposition CC in 2019, which sought approval to use the TABOR surplus for education and transportation needs. The opposition consisted of elected Colorado Republicans, the Libertarian and Republican Parties, and small-government advocacy groups. The opposition was outspent $1.9 million to $4.55 million but succeeded in defeating the proposition 54–46. They effectively argued that this was too big of a bite to take out of TABOR and once the refunded surplus protections were gone, they were never coming back. The coalition invited voters to imagine potential disastrous negative outcomes of approving the change that fit into their core belief that government must be kept small.
The coalition opposed to TABOR is mostly liberal lawmakers, usually Democrats, and local executives who want more flexibility to fund their priorities. They are animated by the belief that TABOR hamstrings their governments from effectively utilizing tax revenue to address the problems they were elected to solve. They cite the fact that Colorado ranks in the bottom five states for funding of education, transportation, and healthcare despite consistently ranking in the top ten states for economic growth as proof that TABOR is handicapping the state.
With a core that is mostly institutionalized elected officials, this coalition will enlist other interest groups when trying to overcome TABOR at the ballot box. On Proposition 118 in 2020, state legislative leadership teamed up with liberal and labor advocacy groups to implement a twelve week paid family and medical leave program funded by a payroll tax shared evenly between employers and employees. The initiative passed 58–42 with the support groups outspending the opposition $9 million to just under $800,000. The targeted nature of the initiative invited support from national advocacy groups invested in the policy outcome with their potential to spend large amounts pushing an effective messaging. Those national groups now have a major success in the paid family leave policy subsystem and can tout those results to implement change in other states or on the federal level.
Policy-Oriented Learning
Both coalitions have learned a lot about what makes their side successful in policy fights that fall under TABOR. The constitutional amendment has remained durable and essentially unchanged since 1992. However, what each side has learned from policy battles affected by TABOR has had an enduring impact on how they operate.
Because TABOR requires voter approval for tax increases, the wording of how that appears on the ballot influences its ability to pass. The TABOR proponents have successfully argued in court that the ballot measures to raise revenue are written in all capital letters and emphasize the cost, which accentuates their message.
Even though proposition CC in 2019 did not raise any taxes, the ballot language still needed to be printed in capital letters because it allowed the government to keep excess revenue to spend on public education, higher education, roads, and bridges. In that policy battle, the successful messaging in opposition centered on the size of the current Colorado budget. They emphasized that there is enough money to fund infrastructure and education but that the state keeps prioritizing poorly by using the budget for other purposes. As they try to limit government expansion, TABOR supporters have learned that simplicity and inertia are their biggest strengths. TABOR is the current law and if their side can successfully make changing the law sound scary or unsettled, voters will choose the devil they know and default to a no vote.
On Proposition CC, TABOR defenders did not make one coherent argument but rather presented several negative messages meant to convince different voters to default to no. These messages meandered from the size of government, lack of a guarantee on how freed funds would be spent in the future, and communities who would be hurt without a TABOR refund, such as seniors and veterans. These policy lessons drawn on years of political fights in which TABOR opponents have been able to successfully defeat ten statewide tax increases since 1992. This has had an enduring effect on the stridency with which those supporting TABOR see all revenue fights. So confident are supporters that TABOR will survive that they welcome any and all efforts at full constitutional repeal.
Those opposed to TABOR have learned several lessons from these defeats as well. The most used is the legal workaround of raising revenue via fee, a practice that has been validated by the Colorado Supreme Court and does not require voter approval. After Proposition CC failed in 2019, the 2020 Colorado General Assembly passed a transportation plan that will be funded by increasing fees on gas and ride-sharing apps. This plan will raise nearly $6 billion, the same amount as the failed 2018 Proposition 110, but did not need voter approval to pass.
Furthermore, voter initiatives that seek to implement fees to pay for programs appear differently on the ballot. While tax increases need to be written in all capital letters and emphasize cost, fee increases can emphasize program benefits first and end with program costs. This is one reason why the 2020 Proposition 118 for paid family medical leave was designed as a fee program rather than a tax.
There has been an enduring policy change, at least recently, to embrace fees over taxes. Those opposed to TABOR tend to be more fiscally liberal and in favor of progressive taxation that puts more burden on wealthier people and entities while easing the burden on those who would benefit from a program. Fees are a blunt instrument that raises revenue from those who partake in an activity with no discernment for their financial situation. TABOR opposition has learned to embrace fees over taxes because they can more effectively raise revenue. While this coalition may prefer to design policy in a different environment, they accept as reality that TABOR will not be repealed.
Policy Change
Colorado has seen massive changes in policy since TABOR passed in 1992 around education, cannabis, infrastructure, firearms, and so much more. Yet, despite the changes in discrete programs, the TABOR policy environment still looms large. Many government services policies with potentially far reaching impacts are only now occurring that TABOR opponents are winning more frequently.
Debrucing efforts have been more successful at the local level where campaigns are smaller and amounts generated are spent more locally. Several Colorado school districts have previously sought and secured voter approval to float their property tax rates to ensure that local schools would be okay if property values did not keep up with costs due to enrollment growth and inflation. Until 2021, the state advised school districts with this approval to keep rates steady to prevent a potential conflict with TABOR. However this year, the state supreme court determined that rates could be unfrozen and still be constitutionally compliant.
This policy change will radically increase the amount of money available to school districts from local sources but could be quite the surprise to those who have already seen their property tax payments rise already due to Colorado’s dramatic increases in home prices. TABOR opponents have been dogged in their quest to loosen the constitutional constraints on taxation and spending to fund priorities but may soon see a backlash to their policy changes. Change in the TABOR policy subsystem has been almost exclusively in the direction of opposition but recent political shifts could result in a swing back towards those seeking to strengthen its protections. It may be weakened slightly but as long as TABOR remains in the Colorado constitution it will continue to impact the entire fiscal policy making environment.
What next?
The ACF is a useful way to analyze the TABOR political subsystem and how it affects the larger policy environment. Colorado is a state that has undergone substantial political changes since 1992 going from being reliably Republican until 2004 to reliably Democratic now. This has caused policy changes on a wide range of topics, both fiscal and otherwise, leading conservatives to hold even more closely to TABOR as they have lost legislative power.
Despite all that, TABOR continues to be a powerful force in Colorado policy. Coloradans have repeatedly expressed reluctance to do away with TABOR and even opponents who have successfully weakened or worked around the constitutional provision acknowledge that it will likely be with them forever in some sort or fashion. Firmly entrenched interests on both sides, and the conundrum of American-style-democracy, almost guarantee that will be so.
