Fiscal Responsibility

REAL LIFE EXPERIENCE FOR FISCAL RESPONSIBILITY


Colorado’s state spending ability is bound in a tangled knot of sometimes conflicting constitutional amendments, state laws, and voter-passed referenda that often tie the hands of legislators, and prevent government efficiency, responsiveness and innovation. This “fiscal knot’ prevents prudent and necessary government investment and restricts private sector economic prosperity. Here are brief descriptions of the dominant drivers for fiscal policy in Colorado:

• The Gallagher Amendment - Passed in 1982, this amendment divides the state’s total property tax burden between residential and commercial property. It provides that 45% of the total amount of state property tax collected must come from residential property and 55% of the property tax collected must come from commercial property.

• Arveschoug-Bird – This statutory spending limit was passed in 1991, and limits the growth of General Fund expenditures to 6 percent more than the previous year, or 5 percent of personal income, whichever amount is lower. In practice, the 6 percent limit is always lower.

• Taxpayer Bill of Rights Amendment (TABOR) – Adopted in 1992, this amendment requires any tax increase to be approved by voters. In addition, it limits the revenue state government can retain in a year, to the previous year's allowed collections (not actual collections), plus a percentage adjustment equal to the percentage growth in population, plus the inflation rate. Federal funds are exempt from TABOR’s limits.

• Amendment 23 - Passed in 2000, this amendment compels increased spending on kindergarten through twelfth grade (K-12) public education by inflation plus 1% from 2001-2011, and by the annual inflation rate after that time period.

• Referendum C - Passed in 2005, this referendum gives Colorado the ability to keep and spend revenue it collects under current rates for five years.

Before our state can begin to tackle the many issues we face (health care coverage, P-20 education, alternative multi-modal transportation, clean energy initiatives, and so many others) we need to reconcile these conflicting provisions that govern spending. As your state representative, I will work to fashion a solution that ensures fiscal responsibility, while still allowing fiscal flexibility. Towards this end, I will:

 MAKE elimination of the ratcheting effect of TABOR the number one priority in achieving fiscal responsibility.

(The TABOR ratchet effect occurs when revenue collections decline in a year. Those declined revenues set the limit for collections in the next year, thus compounding the consequences of a bad year. The state cannot recover from a low collection year without conducting a election, and getting voter approval.)

 ASK voters to approve a temporary time-out from the constitutional multi-subject ban on ballot measures. This will enable the legislature to draft a referendum reconciling with the multiple conflicts created by these various spending dictates.

 ASK voters to approve revisions to TABOR and Gallagher to allow Colorado to responsibly invest in education, health care and environmental initiatives, including alternative energy and transportation systems.

By pledging to work to correct this fiscal quagmire our state finds itself in, I am nonetheless, respectful of the intent of both TABOR and Amendment 23. I recognize, however, that without a comprehensive plan to correct the negative implications of these spending measures, our state is seriously limited in its ability to plan for the future and respond to the present.