Colorado

Colorado has the strongest tax and expenditure limit in the nation, the Taxpayers’ Bill of Rights, also known as TABOR. It is a constitutional TEL passed in 1992 by voter approval covered in Article 10 Section 20 of the Colorado State Constitution. TABOR has both a revenue limitation and an expenditure limitation. The revenue limitation applies to all tax revenue, prevents new taxes and fees, and must be overridden by popular vote. Expenditures are limited to revenue from the previous year plus the sum of inflation plus population growth. Any revenue more than this limitation must be refunded with interest to Colorado citizens. TABOR includes both state and local governments.

In 2000, voters approved Amendment 23, which exempted education spending and the state education fund from TABOR. In addition, Referendum C was approved by voters in 2005, suspending TABOR from FY 2006-2010. Referendum C allowed the state to retain and spend all revenue collected under the “Referendum C cap” which is set at FY 2007-2008 revenue (the year with the highest level of revenue during the TABOR suspension) plus the sum of inflation plus population growth. Surplus revenue in excess of the cap must still be refunded to Colorado Taxpayers. These exemptions, however, allowed the state to increase taxes and spending.