Colorado’s TABOR Amendment: Protection or Problem?

A recent Denver Post guest commentary by Democratic State Representative Sean Camacho has ignited fresh debate over Colorado’s Taxpayer’s Bill of Rights (TABOR), with claims that the 30-year-old constitutional amendment has evolved into a “Frankenstein’s monster” that creates corporate loopholes at residents’ expense.

TABOR, approved by Colorado voters in 1992, was designed to “reasonably restrain most the growth of government” by limiting budget increases to a formula based on population growth and inflation. One of its most significant provisions requires voter approval for new or increased taxes.

Critics like Camacho argue that TABOR has grown beyond its original intent and now hampers effective governance. However, research from the Independence Institute, a free-market think tank based in Denver, challenges this characterization, suggesting that Colorado’s government has actually expanded significantly despite TABOR’s restrictions.

According to the Institute’s analysis, the portion of the state budget subject to direct voter oversight has shrunk dramatically since TABOR’s implementation. While voters once had influence over approximately two-thirds of the state budget, they now have meaningful consent over just one-third. This shift occurred as lawmakers created numerous TABOR-exempt “cash funds,” often implementing taxes disguised as “fees” that don’t require voter approval.

The debate intensified following a recent Colorado Supreme Court ruling against the City of Lakewood, which found the municipality had improperly raised taxes on telecommunication companies without voter consent. The court decision, which requires Lakewood to refund approximately $42 million to these companies, has become a flashpoint in the TABOR debate.

Camacho characterized this ruling as evidence that TABOR creates corporate tax loopholes, while TABOR defenders view it as precisely how the amendment should function—holding government accountable when it attempts to circumvent voter approval requirements.

“The reality is that Lakewood’s city council made a conscious choice to skirt TABOR, just as state legislators consciously choose to create TABOR-exempt cash funds to avoid going to voters,” argues Nash Herman, fiscal policy analyst at the Independence Institute.

The controversy highlights Colorado’s unique fiscal framework among U.S. states. While most state legislatures have relatively broad authority to set tax policy, Colorado’s constitution explicitly limits this power, requiring direct citizen input for many fiscal decisions.

Proponents maintain that TABOR provides essential taxpayer protections by ensuring citizens have the final say on taxation levels. They point to Colorado’s strong economic performance over the past decades as evidence that reasonable fiscal restraint benefits the state.

Critics counter that TABOR creates unnecessary rigidity in budgeting, particularly during economic downturns when government services are most needed but revenue is constrained. They argue that the amendment’s restrictions have contributed to underfunding in education, transportation, and other essential services.

The philosophical divide often falls along partisan lines, with Republicans generally supporting TABOR’s limitations and Democrats frequently seeking reforms or exemptions to provide greater fiscal flexibility.

As Colorado continues to grow and face new challenges, from infrastructure needs to climate change adaptation, the debate over TABOR’s role in state governance is unlikely to subside. The amendment remains both a fundamental constraint on government growth and a persistent source of political conflict, depending on one’s perspective.

What’s clear is that three decades after its passage, TABOR continues to shape Colorado’s fiscal landscape in profound ways, ensuring that debates about taxation and government spending inevitably involve the voters themselves.