Proposition 117 – Voter Approval of New High-Revenue State Enterprises Exempt from TABOR

An enterprise is a government-owned business that generates most of its income from fees, that can issue revenue bonds and that receives less than 10% of its revenue from state and local governments. Some examples include the state lottery, state unemployment insurance, Colorado Parks and Wildlife, and the University of Colorado.

State government revenue comes from 3 main sources: taxes, fees and federal funding. Tax increases are subject to TABOR restrictions, but most fee increases are not. Prop 117 would require voter approval for new state enterprises if the fee revenue is projected to be or was $100M in the first 5 years.

Generally, if Colorado collects more money than the TABOR revenue limit, the excess must be refunded to taxpayers unless a “deBrucing” measure such as 2005’s Ref C five-year timeout is approved by voters. Fee revenue from enterprises, however, does not count toward the TABOR revenue limit so legislators regularly consider creating enterprises to work around TABOR.

Enterprises must report annually if they are meeting the criteria to continue being an enterprise. If an enterprise loses its status, its revenue is subject to the TABOR limit until such time as it regains its enterprise status.

Recommendation: NO/AGAINST

Some people call this measure, “fees are taxes,” but TABOR exempted fees because fees are paid only by the people receiving the services rather than by all taxpayers.

According to the Common Sense Institute, the percent of revenue exempt from TABOR has grown from 46% in 1993 to 69% in 2019. Supporters of Prop 117 don’t want the legislature to use the enterprise “loophole,” but it’s no surprise that Democrats and Republicans have sponsored bills to create enterprises and to try to get out of TABOR’s fiscal stranglehold.

Website for the Yes side – Voter Approval of Fees
https://americansforprosperity.ivolunteers.com/Sign/TABOR-Initiatives
Info on a more comprehensive supporters’ website appreciated.
Michael Fields and Lindsey Singer, both of Colorado Rising Action, are the initiative’s designated representatives.
Common Sense Institute “is legally required to refrain from policy advocacy,” but Prop 117 supporters might like what its site says.
https://commonsenseinstituteco.org/initiative-295/

Website for the No side – Protect Colorado’s Recovery
https://no116and117.com/


Approved Ballot Language

Proposition 117 (STATUTORY)

Shall there be a change to the Colorado Revised Statutes requiring statewide voter approval at the next even-year election of any newly created or qualified state enterprise that is exempt from the Taxpayer's Bill of Rights, Article X, Section 20 of the Colorado constitution, if the projected or actual combined revenue from fees and surcharges of the enterprise, and all other enterprises created within the last five years that serve primarily the same purpose, is greater than $100 million within the first five fiscal years of the creation or qualification of the new enterprise?

YES/FOR ____
NO/AGAINST ____

Proposition 117 initiative language filed with the Secretary of State
https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2019-2020/295OriginalFinal.pdf