Say you had a box with a plant growing inside it. For reasons dark and twisted, the plant finds itself quite content to grow inside the black confines of the box. It gains inch after inch each week. Eventually, the plant runs out of room to grow but the box is a box. It can’t grow with the plant. The plant, doomed by its own prodigiousness, grows too big for its cramped home and crushes itself against the six walls of its cardboard prison.
So, what do plants and Colorado’s economy have in common? While I grant that it is a little melodramatic, I think it’s also an apt metaphor for the situation imposed by Colorado’s Taxpayer Bill of Rights.
In 1992, Colorado voters approved adding an amendment to Colorado’s constitution that put a cap on how much revenue the state is allowed to collect through taxes. It also requires the state to authorize any new taxes directly through voters by means of a referendum process. Any amount above the cap is refunded to taxpayers. This mechanism allows me to feed into an unhealthy obsession with Legos every year, as my tax return checks can be quite generous. However, at the same time Colorado’s constitution has a requirement in it that requires the state to increase education spending to keep pace with inflation.
One great way to think of both tax and spending mechanisms is to think of TABOR as the brake and Amendment 23 as the gas. TABOR limits government growth and spending while Amendment 23 keeps a steady drip of cash flowing into government expenditures.
Now, why does this matter? Tax and spending isn’t the sexiest of topics. The answer is that it all ties into the favored bugbear of Colorado natives everywhere: transplants.
In an article titled The Colorado Paradox, published in The Atlantic, Emily Deruy makes the case that natives are not poised to take advantage of the state’s booming economy. The reason, she argues, is that the state isn’t producing enough job candidates proficient in Science, Technology, Engineering and Math. This shortage forces tech companies in-state to look elsewhere for talent, which is what’s driving the state’s population growth and subsequent price hike.
TABOR ties into all of this because it makes government services compete with one another for funding. As is often the case, education is what takes the hit. According to an article published by Colorado Public Radio News, Colorado ranks 42nd in funding per student even though it is the 14th richest state. Higher education is even worse off. This year, MSU Denver will only be paid something like $200,000 in state funds. The school’s yearly operating budget is around $35 million. In a TABOR cage match, education gets the beatdown from other critical state functions like transportation and healthcare.
In functional terms, this translates to only a third of Colorado’s native-born adults possessing a degree. By comparison, half of all transplants possess degrees. When 70 percent of the state’s jobs will require higher education by 2020, those numbers are unsustainable. Viewed from that prism, it’s not hard to see why tech companies view importing talent as a good bet.
What can stop the slow decline? Local universities are already moving to address the issue by expanding their STEM offerings. MSU Denver recently opened a new aerospace building, presenting itself as a low cost but rigorous alternative to CU Boulder’s engineering program.
However, the only thing that can truly change the fundamentals of the game here in Colorado is to de-Bruce the state constitution and open up the cash valves to education. Coloradans taking jobs building spacecraft out of Boulder and Internet Infrastructure out of Denver will slow the influx of transplants remaking the state in their own image. Education is, and always will be, the investment with the best rate of return.
Now, with all that said and done, completing my new mega size Lego Star Destroyer calls to me. I bought it with the last of my tax return from April.