TABOR: Safeguarding Democracy?
I though Aristotle said it, but then I Googled it and found the famed quote was actually written by Sir Alexander Tytler, a Scottish jurist and historian who lived from 1742-1813. What did he say?

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship…” Tytler's words come from his book, The Decline and Fall of the Athenian Republic, published in 1776.

I’ve long thought about Tytler's warning – that democracy is undermined by itself once voters see the political process as a way to feed at the public trough – as I’ve watched the American Left try to create a tax-and-spend system in which a minority, defined as “the rich,” pays the taxes and a majority reaps the benefits in the form of various government welfare and spending programs. Tytler, I thought, just might be right.

But now I'm not so sure. I think democracy is evolving a way around the problem Tytler identified. It's called the Taxpayers Bill of Rights and because of it I believe Tytler is dead wrong. Democracy’s demise is NOT inevitable. Constitutional provisions like Colorado’s Taxpayers Bill of Rights turn Tytler’s premise upside down.

Colorado’s Taxpayers Bill of Rights has five provisions. It limits the legislature to revenue growth based on a formula approximating economic growth. It requires surplus revenue be returned to taxpayers. It requires the legislature get approval from voters if it wants to spend surplus revenue, raise taxes or increase government debt. It applies to county and local governments. And local and county governments can hold referendums to ask voters permission to temporarily or permanently exempt the jurisdiction from the amendment.

Tytler envisioned a world where special interest groups would pressure lawmakers to craft legislation that would dole out money to them. Voters would “always vote for the candidates promising the most benefits from the public treasury,” he said. But under the TABOR concept, there is no public treasury, at least as Tytler views it. For what Tytler called the “public treasury” was really the “government treasury,” as he viewed it. But that’s a false premise. There is no such thing as government money, and the Taxpayers Bill of Rights is built on that fact.

Under the TABOR concept, the government doesn’t have money; it merely is allowed to take a restricted portion of the people’s money, with the people having the final say over changing that limit.

The impact of this is that legislators must prioritize and economize, and they must engage the electorate in debates over taxes and spending. In Colorado, the legislature can not spend surplus dollars without approval by voters in a statewide referendum. This has had the effect of reducing the influence of special interests. Proposals to spend surpluses must be crafted to gain the approval of a majority of voters statewide, rather than cater to narrow interests.

When voters say “No” to proposals to spend surplus dollars – as they have done five out of six TABOR referenda since 1993 - are they acting as Tytler envisioned? No. Just the opposite. They are not voting for “largesse from the public treasury” and they are not voting for candidates who promise more “benefits” from the public treasury – they are voting for less money being in the government’s hands in the first place. They are voting to reduce the power of the “public treasury” by leaving the money in the hands of the general public.

Voters may well vote their own selfish interest when faced with a ballot question involving what to do with surplus revenue under Colorado’s Taxpayers Bill of Rights. But because of the way that amendment is structured, the decision must be the majority opinion of the whole state. A vote to benefit one’s own wallet is a vote to benefit every other Coloradoan’s wallet too. Likewise, a vote to approve the spending of surplus revenue will only happen if legislators propose a program or project that benefits the vast majority of Coloradoans, not just a special-interest few.

And because the people are more engaged in the fiscal discussion, democracy is strengthened rather than weakened.

For more on the Taxpayers Bill of Rights concept and how it has strengthened democracy and had a positive impact on the economy and state budget of Colorado, download my 17-page white paper, available online here in a PDF file thanks to South Knox Bubba. The paper also examines flaws in the Colorado Taxpayers Bill of Rights that open the door to the kind of special-interest mischief Tytler was warning about, and suggests ways to fix those flaws in a Tennessee Taxpayers Bill of Rights.