Following a lukewarm reception to his original Taxpayer Bill of Rights (TABOR), state Rep. Frank Lasee, R-Bellevue, introduced an amended version of the legislation Friday.

Members of the state Legislature, including some Republicans, had expressed concern with the original proposal, which would cap state and local spending and taxes at current levels, allowing for inflation and population growth. If governments wanted to exceed the spending limit or raise any tax rate, the change would need to be approved in a public referendum.

In addition, once the spending limit was reached, any surplus in revenue would be refunded to taxpayers.

Although those measures remain, concerns that TABOR was too strict prompted Lasee to revise the amendment, which is modeled after similar legislation enacted in Colorado in 1992.

One of the most notable changes addresses the “ratchet effect” inherent in the original draft. Since governments under TABOR would not be able to exceed the previous year’s spending limit, failure to reach the limit one year would result in a lower limit the following year, thus causing the budget to “ratchet” down. In the new proposal, Lasee allows governments the option of adopting the previous year’s spending limit, which would prevent an unexpected revenue shortfall in one year from affecting budgets in future years.

Another change involves the setup of the Budget Stabilization Fund, otherwise known as a “rainy day” fund. Instead of refunding all excess revenue, state and local governments would be allowed to put some revenue into the fund, which would be used in times of revenue shortfall.

The amendment would also cap state appropriations to the University of Wisconsin System. These appropriations make up approximately one-third of system revenue, according to UW professor of applied economics and public affairs Andrew Reschovsky.

Reschovsky, who recently released a study of the TABOR proposal, is concerned the amendment’s strict spending caps would dramatically decrease funding to the university system.

“The state doesn’t have a lot of discretion in what can be cut, but the university would be one target,” Reschovsky said. “Now if the university is free to raise tuition, the impact on overall funding may not be so severe.”

However, he noted the university might not be able to raise tuition, in which case downsizing would likely occur.

Reschovsky also worries indexing the spending cap to inflation and population growth is insufficient to ensure the continuation of vital public services. His study found if Wisconsin had implemented TABOR in 1986, state spending in 2003 would have only been two-thirds of actual spending, forcing drastic cuts from various programs.

“In the long run, what TABOR is intended to do is slow the growth of spending, but in the long run the economy grows faster than inflation and population, so government becomes a smaller share of the economy,” Reschovsky said. “Taxes don’t just go into a hole; they go to provide services, like the university.”

Lasee and other TABOR proponents maintain the amendment is needed to rein in high taxes and foster an environment conducive to economic growth in Wisconsin. If an agreement can be reached on the wording of the amendment, Republicans may call for a legislative session in late May to debate the measure.

To be added to the state constitution, TABOR would need to be adopted by two consecutive legislative sessions before being approved by a public referendum.