Proposition 103: Colorado Statists Want $3bn in Job-Killing Taxes

State spending in Colorado has increased about nine percent per year over the past two decades. Needless to say, that increase has exceeded the increase in the ability of Colorado taxpayers to fund state government. The only logical conclusion from this sordid arithmetic is to put a leash on the state government. But not everyone is open to such simple logic. There is a movement underway in Colorado to perpetuate the state’s spendoholic habits. On October 12 Colorado voters will start voting on Proposition 103, which would allow the state to impose a big new burden on taxpayers:

In about 20 days, voters all across Colorado will start receiving their ballots for an election that will be conducted almost entirely by mail. The only statewide measure on the ballot is Proposition 103 which seeks to raise the state sales tax and income tax rate. This will take approximately $3 BILLION dollars from Colorado taxpayers. Can we afford this?

No, Colorado taxpayers can not afford that new tax bill. It makes a lot of sense to scale back government in The Centennial State: over the past ten years state and local governments have expanded their payrolls lavishly, from employing 13.2 percent of the Colorado workforce in 2001 to 15.5 percent in 2011. Since the private sector feeds the government sector, and since government employee compensation always exceeds private compensation, this represents a long-term increase in government’s burden on taxpayers.

To put this in perspective:

  • According to employment data from the U.S. Bureau of Labor Statistics, in 2001 there were 155 state and local employees per 1,000 private employees in Colorado;
  • In 2011 that ratio had increased to 188 per 1,000;
  • To maintain the same ratio as in 2001 without laying off a single state or local government employee, Colorado would need 386,000 more private jobs than the state has today.

Taking another $3 billion away from Colorado taxpayers will not create more private sector jobs. On the contrary, there will be less money spent in the private sector and therefore fewer jobs there.

As the bitter icing on this big government cake: the extra tax revenues would not provide a dime’s worth of new services from government. All it is aimed to do is prevent further spending cuts. In other words, the price of government services will go up. But because of the job-killing effect of the tax increase, this government price hike is not going to be the last. When fewer still are working in Colorado’s private businesses, there will be fewer still to pay the even higher taxes. To protect government from cutbacks, Colorado politicians will then have to raise taxes again.

At some point, the advocates of ever bigger government and ever higher taxes have to answer two simple questions:

  • When are taxes high enough?
  • When is government big enough?