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Briefing and Opinion
June 24, 2005

Wade Buchanan and Tom Clark
1. Benefits
2. Pitfalls
3. Economic Recovery
4. Impact on Education
5. Refunds
6. Principle or Fiscal Policy
7. National TABORs
8. Referendum C
Wade Buchanan is the director of the Bell Policy Center and a proponent of Referendum C.

Tom Clark is the Executive Vice President of the Denver Metro Chamber of Commerce
Q: How does TABOR benefit Colorado and its citizens?

BUCHANAN: The strength of TABOR is that it gives people an opportunity to vote on taxes, it requires government to go out and make a case for what it is doing to the voters when they want to do something new or want to keep some additional revenues to do something different. I think there's the potential for that to create a great deal of buy-in and ownership.

CLARK: Business does have a different take on this. We were opposed to TABOR, initially. Now we're looking at the benefits of TABOR, but realize there are modifications that need to be made in it this coming election. We think government needs to be on a diet all the time. Tax and spending controls are a good idea. What we don't want to do is put government on a starvation diet where it can't do the things that it needs to do to make business operate effectively and efficiently.

Q: What are its pitfalls?

BUCHANAN: TABOR has nothing to do with us tightening our belt in bad economic times. Every business does it, every family does it. Government has to do it because the revenues aren't coming in. What TABOR says is that when you reach the bottom of bad economic times, and the revenues are starting to return, you can't use those revenues. It's like an argument about being on a diet. Of course I should lose weight, but I don't need to be losing weight down to a weight of zero. I'm afraid Colorado is anorexic right now.
CLARK: You have a business and one year you lose $500. In the next year, you have profits in excess of a $1000, so you are going to get back the $500 you lost, plus another $500. TABOR says, "No, you can't do that. You can only grow at a certain level. You cannot recover." What that means is that the size of government ratchets down smaller and smaller and smaller to infinity. That was a flaw in TABOR that nobody truly understood when it was originally passed.
Q: Are you saying that TABOR is hindering the economic recovery?

CLARK: I think that we have wrung as much efficiency out of what started as a very frugal government. There are very low taxes in Colorado, and we've always been very proud of that. There does come a time when you get to a diminishing returns. The business community realizes it needs partners in government to do the things that are important, to invest in infrastructure like roads and colleges and schools, and health care.
BUCHANAN: Yes, I am. It's hurting the investments that we are able to make. There is no more important investment to the strength of our economy than the way we educate our people, the kind of work force we develop. When you are cutting high education spending in half as a percentage of the state budget, you are not doing your job.
Q: Supporters of TABOR say that Amendment 23, which guranteed funding for schools, put a squeeze on all other state spending.

BUCHANAN: I say that Amendment 23 is not a very good law and I fully support it. Amendment 23 puts a fence around our highest priority issue -- the education of our kids. It says that that whatever else we do under the under the regime of TABOR, while we're cutting other stuff, we're not going to cut public education. But Amendment 23 is a subsidiary of the issue. In the end, it is not the problem. The problem has been the artificial decline in the overall size of the pie that we have to cut the different slices from, not the fact that one particular slice of the pie is protected.
CLARK: Amendment 23 put a squeeze on only one place -- it transferred the pain from K-12 education to higher education. When you are trying to build a technology in a knowledge-based economy, those are terrible places to be cutting spending. Amendment 23 has helped local school districts to essentially tread water and stay even, while while higher ed has had to absorb massive cuts in its budgets.