The TABOR amendment was approved by Colorado voters in 1992. It limits the amount of revenue the state of Colorado can retain and spend. The TABOR limit “base” is equal to the lesser of the prior year’s revenue limit grown by Colorado inflation and population growth, or the current fiscal year’s revenue. Referendum C, which was approved by voters in 2005, allows the state to retain and spend an amount of revenue above the TABOR base. Surplus revenue in excess of the Referendum C cap must be refunded to Colorado taxpayers. The money is to be refunded from the state’s general fund.
If the TABOR surplus exceeds the cost of reimbursing local government property tax exemptions and there is enough surplus to fund temporary income tax reductions, then the state of Colorado can temporarily reduce the income tax rate from 4.63% to 4.50%.
The recent Colorado Proposition CC was an attempt abolish the TABOR amendment. They wanted a blank check. Fortunately, it was soundly defeated by our voters.
Between Colorado fiscal year 2005-06 and now, the Referendum C cap has exceeded its base every year except fiscal year 2009-10. Our Colorado income tax rate is still 4.63%. Why has it not decreased to 4.50% as stated when we have had surpluses for a lot of years?