The bill lays out how the state will calculate population growth under TABOR (Taxpayer Bill of Rights) for determining annual spending limits. TABOR requires that state spending growth be capped at inflation plus the percentage change in state population. However, because the state uses census estimates that can later be revised, the current method can mis-measure population growth.
Current Calculation Method and Its Issues
How It Works Now: For years without a decennial census, the state calculates population growth by comparing two figures: • The federal Census Bureau’s estimate for the previous calendar year (as of December in the current calendar year) • The Census Bureau’s estimate for the current calendar year (as of December in the current calendar year)
Potential Problems: If the Census Bureau revises an estimate upward for a given year, the growth calculated between that year and the previous one is understated because the previous year’s estimate remains lower. This understated growth isn’t adjusted in subsequent calculations, resulting in a lower fiscal spending limit than intended. The reverse happens if the estimate is revised downward.
Proposed Changes in the Bill
New Approach: The bill revises the method to calculate population growth by comparing: • The census estimate, as of December for the previous calendar year (for that same previous year) • The census estimate, as of December for the current calendar year (for that same current year)
Benefits: This method prevents double-counting or miscounting caused by revisions to census estimates. By anchoring each year's population estimate to the December value for that year, the calculation becomes more accurate, leading to a more precise application of TABOR’s spending limits.
Conforming Amendments
The bill also makes other related amendments to ensure consistency with the new calculation method.
This revised approach aims to align fiscal policy more closely with actual population changes, avoiding distortions that could otherwise lead to either overly restrictive or overly lenient spending limits.
Summary
Joint Budget Committee. Section 20 of article X of the state
constitution (TABOR) requires the maximum annual percentage change in state fiscal year spending to equal inflation plus the percentage change in state population in the prior calendar year adjusted for revenue changes approved by voters. Although TABOR does not specify how the state shall determine the percentage change in state population (population growth), the TABOR implementing statutes do. For years in which there is not a decennial census, the TABOR implementing statutes require the state to calculate population growth by determining the percentage change between:
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The federal census bureau's estimate of state population (census estimate) for the previous calendar year, as of December in the current calendar year; and
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The census estimate for the current calendar year, as of December in the current calendar year.
The current method for calculating population growth can lead to
either double-counting or under-counting population changes in census estimates. If the federal census bureau revises a census estimate upward for a given year:
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The calculated population growth between the given year and the immediately preceding year will be understated, since the population growth between those years is based on an inaccurately low census estimate for the given year; and
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The understated population growth between the given year and the immediately preceding year is not corrected or carried forward when calculating population growth for subsequent years, as those calculations are based on the revised census estimate for the given year.
Put differently, if the federal census bureau revises a census estimate upward for a given year, population growth will be understated and the fiscal year spending limit will be lower. The opposite is true if the federal census bureau revises a census estimate downward. In either case, under the current method for calculating population growth, population growth would be measured inaccurately.
The bill adjusts the method of calculating population growth.
Under the bill, population growth is calculated by determining the percentage change between:
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The census estimate, as of December in the previous calendar year, for the previous calendar year; and
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The census estimate, as of December in the current calendar year, for the current calendar year.
This approach prevents double-counting or under-counting population changes as a result of revised census estimates and results in a more accurate measurement of population growth.
The bill also makes conforming amendments. 1
