It has been nearly two decades since Colorado voters last approved a major overhaul to the state’s unique tax system that limits government revenue and puts refunds back into their pockets. 

Now, as state lawmakers contend with a $1.2 billion budget deficit that is prompting cuts to education, health care and safety net services, Democrats say it may again be time to push for changes to the Taxpayer’s Bill of Rights — or TABOR. 

Under the 1992 voter-approved ballot measure, the state’s budget cannot increase beyond the rate of population growth plus inflation. Any excess revenue the state collects must be remitted to taxpayers, colloquially known as TABOR refunds. 

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Democrats say it’s been the main driver behind the current budget crisis, casting TABOR’s funding formula as an imperfect model that constrains the legislature’s ability to keep up with the needs of the state. 

“We’ve made a lot of really painful, difficult decisions over the last few months,” said Sen. Jeff Bridges, D-Greenwood Village, in a meeting with reporters on Tuesday. 

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“My guess is at some point there will need to be something done to address the structural deficit we currently have,” he continued. “One answer is you cut spending. The other answer is you change the structure. We’re already at a point where we’re cutting investments in things like food banks and food pantries.” 

Bridges, chair of the legislature’s Joint Budget Committee, said the last time the state found itself in this situation, it led to voters in 2005 approving a five-year suspension of the spending cap. Known as Referendum C, the ballot initiative also removed a TABOR provision that tied the state’s spending limit to the previous year’s budget.

The measure was backed by Republican Gov. Bill Owens following years of declining tax revenue that spurred repeated budget cuts. Bridges said it represents one of a handful of options voters could consider if future proposals to change TABOR are brought forward. 

Because TABOR requires voter approval for tax policy decisions that may increase revenue, such changes would need to be considered as a ballot measure. 

Lawmakers could vote to add a ballot question to an upcoming election, though Democrats signaled they’d spend the remainder of this legislative session focused on the budget — with TABOR potentially being a larger focus next year. 

“I don’t know that a temporary time-out is the right solution here. I don’t know if a full restructure is the right solution,” Bridges said. “Right now, I am really focused on how we cut this billion dollars in a way that causes the least amount of harm to the people of Colorado.” 

State Republicans have vowed to defend TABOR, which they say serves as a check on government spending that empowers taxpayers. 

“Any attempt to weaken or destroy the Taxpayer’s Bill of Rights is a direct attack on the will of Colorado’s voters, it isn’t just a policy debate,” the Senate GOP said in a statement. “The state government does not have a revenue problem: it has a spending problem. Unchecked government growth has created a structural problem. The Democrat majority has irresponsibly overspent.”

Voters in recent years have also shown resistance to changing the system.

Proposition CC, which would have permanently ended the state’s spending cap by eliminating refunds, failed in 2019 and voters in 2023 shot down a property tax measure, Proposition HH, that would have significantly cut into TABOR refunds. 

While HH was referred to the ballot by Democrats as a way to lower property taxes, opponents criticized it as an end-run around TABOR since it would have reduced refunds to backfill the loss in tax revenue. 

“We’ve had initiatives in the past, but they’ve failed — and why is that?” said Senate President James Coleman, D-Denver. “I think part of it is because we don’t do a great job, frankly, on our marketing and awareness campaign around what the issue is, what we can do.” 

The push to change TABOR is taking on new urgency as uncertainty from the federal government could put even more funding for Colorado at risk. 

Questions persist about the fallout of President Donald Trump’s funding freeze, which remains unresolved despite multiple court orders. Congress also recently took the first steps toward approving a federal budget that could slash hundreds of billions in Medicaid spending, something lawmakers say would exacerbate the state’s cuts to the program. 

“We’re in a time right now where everybody’s saying, ‘We need more resources,” Coleman said. “But we’re also limited in what we can do. What I will say is I, as well as I’m sure all my colleagues — we’re tired of that being an excuse.” 

Lawmakers have warned that the state’s budget woes are likely to persist beyond next year amid uneven economic forecasts. Inflation in certain sectors, like health care, is also far outpacing the state’s average inflation rate, which partly dictates how fast Colorado’s budget can grow. 

“People have to feel the pain before they’re going to respond and want to change TABOR,” said Sen. Judy Amabile, D-Boulder, also a Joint Budget Committee member. 

“I don’t think any of us are interested in having people feel pain,” Amabile said. “(But) there are subtle ways that people feel that their government doesn’t have all the resources it needs. That’s certainly already playing out in the health care space … it is playing out in potholes and traffic congestion and those kinds of things. We’re not going to be putting any additional resources into those things that people do feel every day.” 

The comments from budget committee members come weeks after House Speaker Julie McCluskie, D-Dillon, referenced the 2005 TABOR changes in a conversation with reporters, saying, “This is a time maybe for us to be having those conversations again.” 

The budget committee is expected to unveil its spending proposal next week, and lawmakers will have until the end of the legislative session on May 7 to approve it.