This series highlights nominees for SPN’s annual Bob Williams Awards.
It’s always impressive how creative politicians can be when they want to push a tax hike. With Proposition HH, Colorado politicians outdid themselves.
In 2023, Colorado Governor Jared Polis and state legislators tried hiking taxes by keeping the state income tax refunds that Coloradans were constitutionally entitled to. To achieve this, Colorado’s leaders utilized some legislative slight-of-hand, incredibly creative (and misleading) ballot language, and a less-than-forthcoming political strategy.
Thankfully however, the Independence Institute (II) was ready for this tax grab attempt and delivered a victory for taxpayers and fiscal responsibility.
In 1992, Colorado voters approved a taxpayer bill of rights (TABOR) amendment to the state constitution. As its name entails, it was a major victory for Colorado families by way of a state spending cap. TABOR required the state to automatically give Coloradans refunds when state revenues exceed the state’s obligations.
This not only makes sense fiscally, it gives annual relief to Colorado taxpayers. The Wall Street Journal explains, “TABOR’s gift to taxpayers has increased in recent years as surpluses led to large refunds. […] Single filers last year received record refunds of $750 apiece. The budget department has estimated that refunds will grow again this year to more than $800.” However, as the Journal goes on to explain, over time, TABOR’s mandatory fiscal responsibility and annual taxpayer refunds became “unacceptable for public unions, which want the no-limits spending of other Democratic-controlled states.”
To lift TABOR’s mandated spending caps, Colorado legislators (and the public sector unions that benefit from generous state spending) needed voters’ approval. However, when legislators had attempted to get voters’ approval for increased spending (and lower refunds) in the past, voters soundly rejected them. So, Gov. Polis and state leaders needed a different strategy. Proposition HH represented that new strategy.
Proposition HH had two main parts.
The first, legislators framed as a reduction in property taxes. The second was framed as a way for state leaders to spend more on schools. But in reality, Proposition HH would give homeowners a negligible short-term property tax reduction and higher property tax hikes in the long run. It would also lift the spending caps TABOR implemented and allow the legislature to spend up to 25 percent more each year.
In short, Proposition HH was a drastic tax hike disguised as a tax cut.
Gov. Polis and state legislators quietly passed Proposition HH on the last day of the legislative session to little fanfare. But the Independence Institute was paying attention and quickly got to work.
To show taxpayers what Proposition HH would do to their tax bills and tax refunds, the II team published easy-to-understand and reliable research, op-eds, a website, and spoke to taxpayers around the state about the realities of the Proposition. They also teamed up with other organizations who were opposed to HH to reach as many taxpayers and voters as possible.
All this outreach showed Coloradans how Proposition HH would not only take away the hundreds in tax refunds they were entitled to each year, but it would also increase state spending by over $20 billion through 2040.
Independence Institute’s work paid off. In November 2023, Colorado voters rejected Proposition HH by an overwhelming 60 percent. Now, thanks to Independence’s team, TABOR is securely in place and responsible state spending is still mandated by Colorado’s constitution.
In the end, the Independence Institute showed how even with the odds stacked against them, taxpayers can win a victory for tax relief and fiscal responsibility.
