Friday, July 15, 2005

Cutting Taxes, Fixing Roads, Funding Schools

What is now known as Referendum C was introduced in the state House on January 27, 2005 as HB05-1194. The original language of that bill contained a tax cut, specifically it reduced the state income tax from the current 4.63% to 4.5%. The bill was assigned to the Finance and Appropriatons committees and repeteadly laid over while bi-partisan negotiations with Governor took place. Finally on March 9th the bill, in all of it's ammended glory, passed second reading in the House. Somewhere though in the 41 days between first reading and second reading the tax cut was removed, that decision may be what ultimatley keeps Referendum C from passing this November.

I was following 1194 quite closely, closer than most, and at the time I remember thinking that if you had to give up the tax cut to make a deal - so be it. The important thing, I thought, was getting something done to bring to the voters this November. The tax break was miniscule, we needed to focus on the broader issue. Now I see just how incredibly short-sighted that was.

It is still early in the C&D debate, but thus far debate seems to be focusing on the allegation that Referenda C&D are somehow akin to a tax hike. Now I certainly don't buy that, no new taxes are being created and no tax rates are going up... how can that be a tax hike? The problem for C&D proponents though is that just having a debate on the issue is damaging to their cause. Whether or not C&D are actually a tax hike is secondary, there will be constant debates from now until November on the issue. In everyone of those debates - whether they take place on a blog, at a barbecue, around the water coooler, or on the Aaron Harber show - the phrase "tax hike" will be uttered... repeatedly.

Wouldn't it be nice if Referendum C still contained that miniscule tax cut? The debate would be over 0 the bumper stickers write themselves, "Cutting taxes, fixing roads, funding schools". How do you vote against that? At the time the tax cut seemed so insignificant but now it appears it may have been the keystone to the C&D debate and it was given away.

I'd like to know where in the negotiations the tax cut was finally jettisoned and for what rationale. I'd like to know who's idea it was to sacrifice the tax cut.

Kudos to Speaker Romanoff for having the foresight to incorporate the tax cut into the original language of 1194. I don't know why we ever gave it up.


At 12:38 PM, Blogger red ranger said...

The tax cut you mention would have lead to a revenue increase by decreasing the marginal tax rates and changing the tax structure, and was simply put in, to throw off Republican opposition, I'm glad it wasn't passed with the Tax cut, and Referenda C & D will probably both fail.


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