By Gene Davis, DENVER DAILY NEWS
A group of Democratic Colorado lawmakers want to start a multi-step process that could end up altering some of the controversial constitutional limits on the state budget.
Senate Concurrent Resolution 001 would let voters decide this year whether to charge a 19-person bipartisan commission with the task of reviewing the fiscal restraints required by the state constitution, namely the Taxpayer’s Bill of Rights, which gives voters the final word on tax hikes, Amendment 23, which requires annual increases in K-12 education funding, and the Gallagher Amendment, which restricts local property tax revenues.
After holding at least one open meeting in the seven state districts, the commission would be able to draft a 2012 ballot measure addressing some potential solutions. The referendum would allow the ballot measure to exceed the single subject rule, meaning voters could weigh in on altering possible issues like Amendment 23 and TABOR with one vote.
Rep. Mark Ferrandino, D-Denver, one of the resolution’s sponsors, said that while the key constitutional fiscal constraints have merits on their own, put together they give lawmakers few options to address the state’s current budget crisis.
“We need to come up with a sensible solution to make all of these different constitutional restrictions harmonize and be able to work in a sensible way so we that we can have sensible public policy and fiscal policy for our state,” he said.
But Barry Poulson, senior fellow for the Independence Institute, a Golden-based libertarian think tank, doesn’t expect a 19-person bi-partisan group to accomplish much.
“With that many people, there are so many viewpoints that I don’t think you can get much done,” he said.
SCR 001 is part of a growing effort by some lawmakers and scholars to examine and address possible long-term solutions for Colorado’s budget.
Budget tsunami
Last July, the Center for Colorado’s Economic Future at the University of Denver issued a report titled “Colorado’s State Budget Tsunami” that claims there is a structural flaw in the revenue system that supports much of Colorado’s state government.
The report’s authors — Charles Brown, director of the Center for Colorado’s Economic Future at the University of Denver (CCEF), and former Denver Post editor Jeffrey A. Roberts — said the structural problems could reach a boiling point for the 2010-11 fiscal year when $1 billion in one-time money that was used to help prop up the 2009-10 general fund budget isn’t available.
“I’ve been an observer of the state budget for about 35 years É and I can say with great confidence that this is the worst financial problem that I think the state has faced, certainly in my time,” said Brown in July.
Brown said the budget problems come from state taxes and state tax revenue not growing at a sufficient pace to keep up with the growth in services — namely Medicaid, prison funding and K-12 education — that the state provides.
In 1999, around 54 percent of general funds were used for the three services. The services now take up around 76 percent of general fund revenue, and that number is expected to possibly rise to 90 percent over the next five years. The increase is partially due to the voter-approved Amendment 23 requiring per-student funding to be increased at a set rate each year and from an increase in Medicaid caseloads, the report says.
Meanwhile, a drop in state revenue has forced lawmakers to fill more than a $1.4 billion gap for the 2009-10 fiscal years.
“This would be sort of like in your personal budget as a family, if you’re in a position where you have several items within your personal budget É (that are) all growing at a faster rate than your income,” said Brown. “Now think of what would happen in the event that your income declines for a few years but those costs continue to increase; that’s basically what the Legislature is facing.”
Lawmakers last month passed a resolution granting Brown and Roberts the ability to complete a follow-up comprehensive study of the state’s tax system. Such a study hasn’t been done since 1958.
But Poulson said the budget situation isn’t in the crisis mode that some have made it out to be. He credited TABOR for helping Colorado avoid the budgetary fiasco that has plagued California, which had a budgetary limit similar to TABOR but ended up getting rid of it.
“I think people have been sold a bag of goods on this so called crisis,” he said. “I think we’re likely to see revenues begin growing (and that it) will happen pretty quickly.”
SCR 001 was introduced in the Senate last month.
Distributed by Colorado Capitol Reporters
