Commentary: Blame for budget crisis clear: Gallagher and TABOR

When County Commissioner Sallie Clark, referring to the county's latest budget woes, said, "It's nobody's fault. It is what it is," she was dancing around the facts.

The county's budget shortfalls, as well as those of the city, the state, and dozens of other jurisdictions, are the direct result of statewide votes during 1982, when voters approved the Gallagher Amendment, and during 1992, when voters approved TABOR, the so- called Taxpayer's Bill of Rights.

The Gallagher Amendment divides the state's total property tax burden between residential and commercial property. According to the amendment, 45 percent of the total amount of state property tax collected must come from residential property and 55 percent of the property tax collected must come from commercial property.

The amendment mandates that the assessment rate for commercial property, which is responsible for 55 percent of the total state property tax burden, be fixed at 29 percent. The residential rate, on the other hand, is annually adjusted to hold the 45/55 split constant.

TABOR's byzantine complexities are not as easily summarized. Briefly, TABOR:

Requires a public vote on all tax increases and new government debt.

Limits the amount of tax revenue raised by state and local governments in Colorado; year-to-year increases in revenue amid economic growth may not exceed the combined rates of population growth and inflation.

Applies the revenue limits to almost all revenue sources, ranging from income tax and sales tax to college tuition.

Refunds to taxpayers any excess revenue collected above TABOR's limits unless voters agree to let government keep the surplus.

Prevents state and local governments from ever recovering lost revenue that would have been needed to make up for the added cost of inflation and population growth during an economic downturn, when tax revenue drops. (This is sometimes referred to as the "ratchet effect.")

Places into the state constitution all previously legislated spending limits by mandating that "limits on ... spending and debt may be weakened only by future voter approval."

Because of the interactions between Gallagher and TABOR, the county's mill levy has declined from 11.4 mills to 7.7 mills during the last 10 years. Property tax collections have not kept pace with inflation or population growth, continuously straining county budgets.

Now, it appears, county employees might have to pay for the fecklessness of voters 15 and 25 years ago, who chose to give themselves a free ride and let future residents pay for their irresponsibility. To close the budget gap, the commissioners may have to furlough all non-essential employees for a week.

It's a regrettable situation. Our sympathies are with the county employees who must, through no fault of their own, be deprived of a paycheck during this holiday season.

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