Colorado Schools Could Lose Out On $40 Million In Pot Revenue Today, All Thanks To Grover Norquist

All the state revenue generated by Colorado’s marijuana industry could blow away overnight Tuesday. CREDIT: AP PHOTO/BRENNAN LINSLEY, FILE
All the state revenue generated by Colorado’s marijuana industry could blow away overnight Tuesday. CREDIT: AP PHOTO/BRENNAN LINSLEY, FILE

Thanks to an esoteric state law born from conservative small-government thinking, Colorado voters must decide Tuesday whether they’d rather have new schools or eight bucks each.

The state’s $58 million in tax revenue from legalizing marijuana will be redistributed to individual taxpayers unless voters approve Proposition BB. That money is meant to fund construction in the state’s public school system ($40 million), marijuana education and youth mentoring programs ($12 million), and other public services. Such investments were a major selling point when legalization was first up for approval.

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But if BB fails, the state would have to give it all back — an average of $8 per Coloradan, but divvied up differently to favor the marijuana cultivators who paid much of the tax revenue in question here.

Unlike most of the nation’s other notable ballot measures, the pot tax question was not the product of some groundswell of popular support and signature-gathering. Taxpayers already approved the public service allocations from pot taxes when they first voted for a tax-and-regulate system for legal recreational cannabis.

Even with that popular thumbs-up on file, the state legislature was in a sticky situation. Lawmakers were forced to put Prop. BB on the ballot by the state’s Taxpayer Bill of Rights (TABOR). The TABOR dates back to 1992. Colorado is the only state in the country with such a law, though the idea’s boosters have campaigned for similar measures in dozens of other states. Voters in the other five states where a TABOR measure made it onto the ballot have all rejected it.

The policy is a branch off the anti-government tree planted decades ago by conservative powerbroker Grover Norquist, who famously called for shrinking the government “to the size where I can drag it into the bathroom and drown it in the bathtub” back in 2001. TABORs establish a fixed limit on the growth of tax revenue in a state government, automatically returning any public income in excess of that growth limit.

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Colorado has slid precipitously down national rankings for public services since enacting the measure 23 years ago. Once 35th in the United States in measures of both K-12 and higher-education funding, Colorado now ranks 49th and 48th respectively. The state also got much worse at insuring children in low-income families and at vaccinating kids.

The policy was marketed as a way to make the state more inviting to job-creators, but instead “contributed to a credit rating downgrade and alarmed business leaders by undermining the state’s ability to invest in its basic infrastructure and workforce,” the Center on Budget and Policy Priorities notes. Supporters of the revenue restrictions had said that the math at the heart of the measure would ensure that public services didn’t suffer from the bill, but their formula hasn’t worked as promised.

TABOR’s self-executing rules sent more than $2 billion in state revenue back to taxpayers from 1992 to 2001. The resulting erosion in public services got so bad that voters suspended the TABOR for half a decade during the Bush years. The changes to the policy, which is enshrined in the state’s Constitution, had to be done via ballot initiative because the measure allows lawmakers no flexibility on how to meet its requirements. (When then-Gov. Bill Owens (R) agreed to support the suspension measure in 2005, Norquist said he had “slit his own throat” politically.)

The rigid mechanisms of Colorado’s TABOR are a hallmark of Norquist’s approach to winning the grand ideological contest over the proper role of government. Like the absolutist anti-tax pledge that first made him a force in national politics, and the supermajority requirement to pass tax legislation in some 16 states, the TABOR is a self-executing rule that creates a structural hurdle to public investments.

Huge numbers of Republican politicians signed Norquist’s pledge, giving him tremendous leverage for decades. But his influence has waned in recent years as high-profile Republicans defected from the pledge and low-profile ones sniped at Norquist’s credibility with base voters using Islamophobic rhetoric aimed at his wife Samah.

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But Norquist’s legacy of rigidity lives on in Colorado. The state’s legal marijuana experiment has generated over $100 million in new tax revenue thusfar, lowered retail prices rapidly from initial highs, and boosted Colorado tourism significantly. Yet the marijuana industry still faces several serious threats to its existence, most of them tied to federal law.

And unless enough voters stand up a second time for the public investments they’ve already approved from the pot windfall, all that headache will fail to reverse the decline in education spending that Norquist’s ideas wrought.