Thursday, June 01, 2006

TABOR spending trap: Just don't do it

There's something that happens to people who are passionate in their beliefs. A physical transformation occurs when they begin to articulate what they stand for.

Last week I had the privilege of talking with someone whose passion ignites a fire in her eyes in a way that I've seen in few people. Her name is Kristi Hargrove. And her passion? Spreading the word to other states about the devastating effects of the TABOR spending trap.

Hargrove lives in the rural tourist ski town of Crested Butte, Colorado. She identifies herself politically as a fiscally conservative Republican businesswoman. She's also the mother of four kids and has been very active in the local and state PTA.

The Hargrove family moved to Colorado just after the TABOR bill passed in 1992. Prior to that they lived in Southern California, watching the news from Denver on their TV via satellite. Hargrove says she'd have supported the bill and voted for it based on the news she heard. Voters were told that they'd get to vote directly on any new taxes and that TABOR would limit government.

As a fiscal conservative, this appealed to Hargrove. But the law that was sold to Colorado voters wasn't what they were told it would be.

According to Hargrove, the TABOR spending law didn't limit government in Colorado. It shrank government. Kristi's articulates her friend's analogy:

Its like putting your budget on a diet with no weight loss goal. So you go from being a little heavy (but doubtful, we certainly weren't heavy) to anorexic. You can't stop it. There's no end in sight.

The proposal for Oregon's TABOR spending trap law uses the same spending forumla as Colorado.

Kristi's foray into the TABOR issue began because her kids came home complaining that it was freezing in the school building--no money to heat the building properly. So Hargrove took her bookeeping background and combed through the school budget to look for waste. To her surprise she couldn't find any wasted dollars. There just wasn't any money. At that point, Hargrove decided to investigate school funding in Colorado.

That's when the TABOR spending trap "reared its ugly head", she says. Not only was the budget bad because of TABOR, it was going to get worse. Because of TABOR's spending formula (Inflation rate + Population), budgets were having to be slashed. The law completely disregarded demographics such as an increased senior and school aged population. It also didn't compensate for increased energy costs, prison populations or special education needs.

Hargrove noted that the spending cuts were alarming given that they were happening in the 90s:

Understand we are in a robust economy in the 90s in Colorado. And yet they're cutting our school funding. Class sizes are going up. Maintenance isn't happening anymore. And we're kind of wondering what's going on here. We're in this great economy. So people got together and in 2000 we passed Amendment 23 which is another Constitutional Amendment that requires the legislature to fund K-12 education by inflation + 1% for 10 years. And the goal of that was simply to get back to 1992 funding by 2010.

TABOR's spending trap had shrunk government to the point that even with the inflation adjusted dollars formula, schools were back to more than 8 years behind funding levels. Hargrove says as a result of these massive cuts, PTA was having to fundraise to buy current textbooks. Where they used to hold fundraisers to pay for extras like band uniforms, now they were having to pay for basic necessities.

But even more alarming were the effects on health care in Colorado, especially for children. In 2003, Colorado ranked 50th in the nation for childhood vaccinations with only 69% of children recieving their scheduled vaccines. In 2002, Colorado's national prenatal care ranking was 48th. In 2004 Colorado ranked 50th in the nation for percentage of low income children with health insurance.

Under the TABOR formula "you can't get back to where you were", according to Hargrove. When you "pull in the reins" during lean times, that becomes the benchmark for the very best you can do with spending. So even with a prospering economy, government can't invest in school improvements, better health care, services for the elderly or prisons.

Another TABOR spending trap caveat: tuition increases. Under the Colorado law (and the Oregon proposal) tuition increases are counted as tax increases under the cap. So schools can't raise tuition to compensate for the heavy spending cuts.

One consequence of the TABOR spending trap in Colorado made the glow in Kristi's eyes burn especially bright. It created a lack of accountability for Colorado's legislature:

I'm frustrated because I can no longer hold my legislators accountable because its mandated in the Constitution. And all they have to do is say, "Gee I love education. I'd love to fund education. Can't do it. There's no money. I'm restricted on this and K-12 is already getting 46% of the general fund. So can't give you any more because of this formula. And so I kept wondering why I'm bothering. They can't do anything. Its all mandated.

The sound bites generated by TABOR supporters also make Hargrove angry.

I think what makes me angry about this is that it preys on the people that it hurts the most. In other words, the soundbite appeals to the people and they'll vote for it even though they're the ones that get hurt the worse. They're more reliant on public services. It hurt us and it'll hurt you. I guess my message here is 'Don't do it. Just don't do it'. Its a slippery slope. You can't recover from it. You dig a hole so deep. Its going to take us forever to dig out. And we can't repeal it because of the way our Constitution is. We can only deal with one subject at a time.

And in all honesty, yours is worse. Yours is stricter. So if you want to spend over the cap you could be having to hold elections every biennium to spend for any specific thing that you want to spend over the cap. You can't do what we did and suspend it for five years.

In Oregon, TABOR supporters consistently talk about how it will create more accountability. But has Hargrove demonstrates, that's not at all what it does. It completely removes accountability and allows legislators to shrug and walk away. Its out of their hands. The conversation is closed and there's no way to address it.

The promised TABOR tax refunds have never materialized for Hargrove either. The little that has come back to them in refunds have been paid out over and over again in extra fees at schools, fundraising efforts, etc.

Hargrove reiterated her passionate plea:

I'm a fiscally conservative Republican. And I'm here telling you desperately telling you this is fiscally irresponsible. This is not reasonable. It has a lot of unintended consequences that will effect your population across the board.

Oregonians have a real opportunity to learn from the mistakes made in Colorado. We simply have to listen to the pleas of citizens who've experienced the terrible consequences of the TABOR spending trap to know its horrible policy.

Much like the schools in Colorado, Oregon's budget isn't rife with waste no matter what Jason Williams and the Taxpayers Association of Oregon try to sell. The TABOR spending trap sales pitch is a dishonest set of promises that won't happen for us just like they didn't happen for Colorado.

Meanwhile its the most vulnerable Oregonians who will suffer the consequences.