Colorado faces serious
fiscal challenges because of several Constitutional provisions as well as a
statutory provision that have been passed over the years concerning how the
state can spend revenues.
- The TABOR amendment limits the amount of
spending by state government to amounts based on revenues collected in the
prior year or on actual revenues collected whichever is lower. This “ratchet
down” effect permanently reduces state spending after economic downturns.
- Amendment 23 requires the state to spend a
certain amount of state revenue on K-12 education each year.
- The Gallagher Amendment affects the ratio of
residential property tax revenues versus business property tax revenues.
- Arveschoug-Bird, a statutory provision passed by
the legislature in 1991, caps the annual growth in appropriations from the
General Fund to no more than 6% annually regardless of revenue.
Referendum C passed by the voters
in Nov. 2005 gave the state a five-year timeout from the revenue limits of
TABOR. The current Colorado
state budget is the third of five budgets to operate under Ref. C and the
current legislature is working on the fourth. Ref. C has allowed the state to
retain more than $1 billion in revenues each year. However, most major state
programs have still not returned to the levels of service just prior to the
2001-03 economic downturn. (Looking Forward: Colorado’s Fiscal Prospects after Ref C,
The Bell Policy Center, Colo. Fiscal Policy Institute, and Colorado Children’s
Campaign, Dec. 2007) Referendum C will expire in 2010-11 however it allow the
state to retain revenues up to a new capfor spending after FY 2010-11. Although
it limits growth to the sum of inflation plus population growth, it bases the
new limit on the prior year’s limit, regardless of actual revenues collected,
thus eliminating future rachets. However, over time, projections indicate that
revenues may exceed the new excess revenue cap. (See report cited above).
Untying this fiscal knot must be
top priority for the state. With so much of the
General Fund money allocated to K-12 education, Medicaid, and
Corrections, there is little left to support increases in support for higher
education, social services, and other needed services. The ability to pass
comprehensive health care reform, address transportation costs, and implement
innovative service related programs is extremely limited within the current
constraints.
I support the proposal advanced by
Speaker of the House Andrew Romanoff to put a measure on the ballot in Nov.
2008 to lift the single subject rule for the Nov. 2009 ballot in order to allow
a measure to be put to the voters that will address the Constitutional fiscal
restraints in a comprehensive and smart manner. I will work to address the
limitations on government spending in a responsible comprehensive way,
preserving the right of citizens to vote on new taxes, but not hamstringing the
government in such a way that it cannot provide the services our citizens
deserve.
