The analogy that works best for me to understand how the TABOR cap works is a whiskey barrel. Imagine the barrel holds the state budget. As tax revenues pour in we collect it in the barrel. The size of the barrel is the size of last year’s budget plus inflation and population growth.
Under our Taxpayer’s Bill of Rights if more whiskey (taxes) flows into the barrel than the barrel can hold, the excess spills over and falls into the taxpayer’s mug. We call that our TABOR refunds.
So why haven’t we received our TABOR refunds in so very long? Well first we voted to use a much, much bigger barrel in 2005 when we passed Referendum C. But whiskey has been pouring into the barrel so fast we should have had lots of refunds even given the larger barrel.
A vote of the people can always increase the size of the barrel, but as every ballot questions for tax increases show over and over again since Ref C, we don’t want more whiskey or a larger barrel. What’s a greedy legislature to do?
Well, the legislature snuck in a spigot at the bottom of the barrel to let some of the whiskey out into a second barrel not subject to TABOR, so that barrel can never be filled enough to reach the top. When the legislature labels a revenue stream an enterprise fund or a tax increase as a “fee” it doesn’t need our consent at the ballot box.
So, they open the spigot and call it the Hospital Provider Fee, and we don’t get or refunds. They open it again and call it the Faster Fee on our car registrations, and we don’t get our refunds. Mill Levy Freeze, Growth Dividend, there are many names for this deceitful practice. The legislature is working to do it again by calling a payroll tax a “fee” for extended family leave.