Reminder: TABOR Has a Dark Side


As FOX 31's Eli Stokols reports:

Tax revenues from Colorado’s new recreational marijuana industry are pouring into state coffers — and that’s actually a bit of a problem for lawmakers…

According to a legal analysis conducted by the state and obtained by FOX31 Denver, the marijuana revenues are subject to the state’s Taxpayer Bill of Rights (TABOR), which will require lawmakers to take action if tax revenues from the new legal marijuana industry exceed the estimated $67 million in annual revenue that was anticipated in the 2013 Blue Book analysis of Proposition AA, the new sales and excise tax rates voters approved in November.

The legal memorandum from the Office of Legislative Legal Services was sent to members of the Joint Budget Committee Monday night…

The most current Dept. of Revenue estimate forecasts that the state will take in $107 million, exceeding the Blue Book estimate by some $40 million.

The conclusion: the state must lower the tax rate and either refund the excess amount of revenues above the $67 million estimate or refer a measure to the November 2014 or 2015 ballot seeking permission from voters to let the state keep and spend all of the tax revenue from recreational marijuana.

As news reports came in that the tax revenue being collected from the legal sale of marijuana in Colorado was greatly exceeding early estimates–something we predicted would be the case–the possibility that this new robust source of revenue might be subject to Taxpayer's Bill of Rights (TABOR) limits was in the back of our minds.

When defending TABOR, Republicans generally stick to the most popular provision of convicted felon Doug Bruce's labyrinthine 1992 constitutional "tax reform" measure: its requirement that affected citizens vote on tax increases. If that was truly all TABOR did, it would be harder for Democrats and good government-minded Republicans–some also part of a lawsuit seeking to overturn TABOR–to publicly oppose it, though the basic question of whether that disrupts the whole principle of small-r republican government remains. When you poll that one aspect of TABOR, naturally, it polls well.

But when you start getting under the hood–how tax increase elections are subject to stringent limits on timing and ballot question language, how TABOR stymies the ability of the state to plan in good times for bad times, how (as may be in this case) the state cannot even take advantage of a huge new revenue source twice approved by voters–it's not nearly as rosy a picture now, is it?

Stokols' whole article is worth reading, and it's clear by the end of it that this legal opinion from the Office of Legislative Legal Services won't be the final word–perhaps not even from that office "as interpretations change." But plainly, the result hypothesized here is not in keeping with the will of voters in 2012 and 2013, when Amendment 64 and Proposition AA were approved.

Who besides Doug Bruce is going to be happy about that?

23 Community Comments, Facebook Comments

  1. davebarnesdavebarnes says:

    Just ask Scott Gessler how to lower the tax rate on dope.

  2. ModeratusModeratus says:

    If you don't like TABOR repeal it. Except wait, you've tried and the voters turned it down repeatedly except for one time in 2005.

    Maybe it's time to start listening to voters instead of telling them what's best?

  3. Sunmusing says:

    Need to keep the cops hands out of the cookie jar as well…It seems they want to replace their fading revenue stream..and they can try to do it on the backs of the newly freed weed consumers…

  4. hawkeye says:

    The powers that be may need to bring back Ritter to create some new so-called "fees" (not taxes) on pot.

  5. So I take it this is some other provision of TABOR that we haven't had to deal with before? (Hey, let's limit initiatives to a single sentence – AFTER we've passed this monumentally complex POS, that is…)

    I can't believe that we're, overall, back to the Ref C revenue cap even with the new marijuana income. So this isn't a traditional TABOR revenue cap thing. Are we limited in collecting any new revenue, regardless of source or type, to whatever someone puts in the initiative/referendum Blue Book estimate? That would suck.

  6. gertie97 says:

    Short answer, PR: yes. TABIOR limits revenues.

  7. Nasty Womanyameniye says:

    New lower tax rate, lower price, more purchased, higher tax income, need to reduce price again, soon weed is free!

  8. VoyageurVoyageur says:

    The key is that while refunds of excess revenue might be required, those refunds don't necessarily have to go to the people who paid the taxes.  It could, for instance, be used for senior citizen property tax credits, which are funded by surplus tabor revenues.   That credit saved me about $800 this year smiley.  Or we could simply increase tax credits for energy efficiency like wind/solar/insulation, since such tax credits are fair use of tabor surpluses.   Or just ask the voters to party down and spend it, since kmost such measures pass as long as they don't actually increase taxes.

  9. n3bn3b says:

    To liberals, anything other than absolute poewr is a "dark side."

  10. CaninesCanines says:

    Maybe I'd be enraged — absolutely enraged! — if the Governor was actually proposing spending a significant amount of that tax money over $67 million on school construction, as well. Instead, the Governor wants to fund anti-cannabis propaganda and studies; seemingly, he wants to provide other states with Colorado taxpayer-funded ammunition to counter their own legalization initiatives. Hell, even the cops are saying how skewed the proposed funding is; their opinion is that not enough has been earmarked for enforcement.

    From the Post:

    Over the next 18 months, Hickenlooper has proposed spending $45 million on youth marijuana-use prevention efforts [ED: NOTICE IT DOES NOT SAY ANYTHING ABOUT PREVENTING USE ALCOHOL YOUTH, AS WELL], $40 million on substance-abuse treatment [ED: WHICH REALLY ISN'T NEEDED FOR MARIJUANA, RELATIVELY SPEAKING], $12 million on public-health projects, nearly $2 million on an anti-stoned-driving campaign [ED: MORE STUPID AND CONDESCENDNG CHEECH-AND-CHONGESQUE COMMERCIALS FROM CDOT] and nearly $2 million on regulation of marijuana stores [WOW! TWO MILLION FOR REGULATION!]. Hickenlooper has also proposed spending money to study trends in drugged driving and to gather intelligence on the "illegal production, sale and distribution of marijuana in Colorado."



  11. DavidThi808DavidThi808 says:

    Why was the ballot initiative written with such a low total?

    • Diogenesdemar says:

      My guess . . . the authors of the ballot initiative did not anticipate the full extent of the heavy tax structure (special sales + excise) that was finally implemented here for recreational MJ — they probably anticipated/hoped for something more in line with the tax structure for medical MJ. 

  12. Thank God for TABOR.  This isn't a "dark side," nor is it the downside. It's the upside.

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